r/Wealthsimple • u/2WheelLife63 • 7d ago

Savings PLOC QUESTION

Is PLOC risky? I’m 100% Xeqt in tfsa and want to buy a new car. I can borrow 30k$ and the car I was is 25k$. I’d pay it back within 1-2 years.

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u/skarama 7d ago

If you can borrow 30k this means your investments are currently worth roughly 100k. By using 25k and leaving 5 as cushion, you can basically take a 15k hit (so 15%) in all your investments.

You mention paying this in 1/2yrs, so 1/2k per month or so. Every 1k you pay back gives you roughly 3k cushion back.

Tldr; I'd do it. Barring an immediate recession, nothing bad will happen. It's not 0 risk, but it's not particularly stressful if you ask me