2019 was the first year of my ETN high leverage investing strategy. Most people call me crazy/insane when I talk about what I’m doing. Keep reading to see if you feel the same. I started building my portfolio in February of 2019 with around $15K. I dabbled in 2018 with ETN’s as well as some Crypto Currencies. I didn’t have a clear set strategy though and liquidated my holdings. While I did have some funds to begin my portfolio, this is only a fraction of my total today. Of the main stream investments, Real Estate using leverage (mortgage) has been considered the only way to use OPM or Other Peoples Money. Most investors think that you need your own money to buy stocks/ETFs/ETNs in order to invest. I am proving this notion wrong.

Leverage – Other Peoples Money

I understood why Real Estate is an asset class that allows the use of other peoples money to buy investments. Having a physical asset to secure the loan makes a massive difference. But I wondered if there was a way to do something similar with high yielding ETN’s and I found 2 ways. I’m not sure where I even got the idea from, but I decided to use balance transfer promotions from credit cards with 0% interest and invest those funds in high yielding Exchange Traded Notes (ETN’s). Using what’s known as Rate Arbitrage, the idea is to make a return on the investments, while paying no interest for the use of the money. I make the minimum monthly payments on those cards by transferring funds from my brokerage account each month. I have not had to sell any of my investments yet as my brokerage, Robinhood allows for margin trading. Margin is another form of leverage through the broker. At the end of 2019, I have 3 credit cards that I’m leveraging $32K at 0% interest. All funds are in high yield ETN’s. My zero percent credit cards have paid out coupons/dividends of $1,780.57 in 2019. Eventually the full balance will be due after the promotional period. I will either sell some shares to pay off the credit cards or I will use margin from my brokerage to pay off the credit card and slowly payback the margin account with the monthly coupon/dividends. I will be following up with monthly updates on my portfolio, so keep a look out for what I decide.

Aside from my zero percent balance transfer credit cards, I also applied for an unsecured personal loan through SOFI and of course I asked for the maximum, $100K! Much to my surprise, I was approved! I was offered $100K over 4 years at 7.77%. The decision to take out this loan was tough and I debated on pulling the trigger for a week. Late in July though, I made the decision to take the funds and invest them. In 2019, I made $5,763.59 in coupon/dividends in only 5 months of payouts. I expect 2020 to be much more.

If you want to check out SOFI for a loan for yourself, you can get $100 back if you use my link. http://www.sofi.com/share/2603727

I also took advantage of Robinhood Gold which allows me to use margin, or borrow money for investing. I do pay $5 per month for this upgrade and 5% interest on the funds I use, but I’m able to have a lot more options. I used some margin to purchase $11K in ETN’s to earn additional return. Of this, $11K, I earned $1,248.47 in payments in 2019. I also did some swing/day trading on high dividend paying stocks & ETN’s. I was able to earn just over $10K in profit and dividends. I have not lost on any trade I’ve made as I follow Warren Buffets first two rules of investing. Rule 1: Do not lose money, Rule 2: see Rule #1. If what I day trade on declines in value and I can’t sell for a profit, I simply hold the asset and collect dividends, and wait to sell at a gain. My cost for Robinhood Gold was $458.21 in 2019. A small price to pay for all the gains I think.

2019 Year Summary

For 2019, I ended up investing $22,000 of my own funds, $11,000 in margin leverage, $32,000 in Credit card leverage and $100,000 from a personal loan into ETN’s. This combined is $165K invested in the market.

Total costs to me in 2019 were $4,623.22. $3,143.01 is the interest on the SOFI loan, $1,022 in credit card balance transfer fees and $458.21 for Robinhood Gold.

In total, I received $13,771.73 in coupon or dividend payments. My largest month was October with over $3,500 in payments!

Outside of the asset value change and day trading, my net income was $9,148.51

For 2020, my challenge is to continue to grow my portfolio with other peoples money. 2 of the credit cards will come due and I plan to secure more unsecured cheap credit to invest. I know the above is a lot to cover and I did not go into a lot of detail, but I will be posting regular updates every month so you can follow my journey. Please consider joining my e-mail list to be notified when I make a blog/youtube update on my investing journey.