Why credit could be better than selling your investments
Things go wrong in life, things break from time to time. Sometimes we can manage but it can be harder when expensive things go wrong. The car breaks down, the boiler breaks or you move flats.
Money can fix these things. Your saving may be a good place to start but what if there is not enough to cover them? Do you sell some of your investments instead?
Selling your investments may not be the best idea. Here are 6 reasons why;
1. It's a bad time to sell
Depending on when you need the money the market may be down. Meaning you get back less money than you put in. It kind of defeats the purpose of investing if you are selling and losing money.
2. Exchange fees
Although exchanges, brokers and platforms market themselves as having no fees, they do. The fees are usually hidden in the spread of the assets you buy.
The spread is the difference in market price between the buyers and sellers. The platform will add a little bit to make a profit on each purchase or sale of the asset. Meaning you pay fees when you buy and sell.
lastly, depending on your chosen platform you may have to pay a withdrawal fee. 😒
3. You may have to pay capital gains tax
You may be able to sell at a profit, but not so fast. Depending on where you live in the EU (inc the UK) you may need to pay capital gains tax, which can range from 13-42%. (Most countries are around 20%)
4. Your assets could be about to grow more
We never know what will happen in the future. But if you invested in a broad range of assets then the key is time. Over time they will be worth more.
5. Credit is not taxed
Because credit is not taxed you could borrow against your assets using JamTomorrow. Avoiding all the fees and taxes associated with selling.
Building back your investment after a short-term expense may be a priority. It is likely you will pay more in exchange fees again.
When you repay for credit, you pay back what you borrowed. Depending on the time you used the credit there may be a small amount of interest.
Credit can be a good alternative to selling investments. Credit can allow you to avoid fees and taxes associated with selling, meaning you keep more of your own money. Which is what we all want.
Enabling people to invest for the long term is our goal at JamTomorrow. We are currently signing up early users. You can secure your spot here.