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Using PSLOC to Invest


QueensDenning

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BlockedQuebecois
  • Lawyer

So first off, putting all of your PSLOC into crypto is obviously dumb. Particularly if you're leveraged. And I say that as someone who has made six figures on crypto. 

Second off, holding crypto ETFs is literally the dumbest way to invest in crypto. If you want to hold a diverse array of crypto assets, you can use a python script to automatically rebalance your portfolio for free.

Buying crypto ETFs is literally just paying someone to do something you could make your computer do for you instead, and nobody should take investing advice for someone dumb enough to do that. 

Your advice is akin to telling someone to cash out their PSLOC, take it to Vegas, and then pay a guy 0.4% of their PSLOC to go bet it all on red. I probably wouldn't bother responding if you just told someone to put their PSLOC on red at a casino, because that's obviously irresponsible advice. But your advice is both irresponsible and shows you're an idiot who doesn't understand how casinos (read: an ETF) works. 

Edited by BlockedQuebecois
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On 9/18/2021 at 10:08 AM, Vizslaw said:

I would also just add that if you have other accounts/products with the bank, you run the risk of them cancelling those accounts if they believe you have breached their agreement or terms of service. We see those files fairly often, and it can cause more trouble than it's worth.

Who in their right mind would open any trading or investment account with a bank?? I mean there is such a thing as low cost and no cost brokerages. I'm thinking of Questrade and Wealthsimple, etc., in Canada. Too bad we can't open an account with some of the US free brokers like Robinhood. 

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On 9/18/2021 at 10:33 AM, BlockedQuebecois said:

I love how confident some people are that a major bank wouldn’t mind you tricking them into giving you a margin account without meeting the equity requirements or paying the proper interest rates.

If you want to invest with the bank’s money, you can do that. But the proper product is a margin account, not a PSLOC, and the banks generally don’t like it when you think you can outsmart them. 

Even if the individual business advisor didn’t mind, for some reason, the risk profile changes when you trade on margin. If you think a bank’s risk department is going to be cool with you trading on margin at a decreased interest rate with no equity at stake… 

Correct. I trade 10x leveraged margin. BUT, I trade crypto on an exchange (Binance, FTX etc) with 0 funding fees and 0 interest. Meaning it doesn't cost me anything to use margin or leverage. And the trading fees are so low I don't even notice them. Basically a fraction of a percent or near 0. Of course I use $15k of crypto as collateral and they let me do up to 25x leverage. It means could trade if I wanted to over a 300k+ position. I usually stick to the low $100k though each time. I think people are saying the funding cash comes from a LOC or student loan etc., but obviously you wouldn't have a trading account with the bank.

Edited by CRYPTOLAW
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On 9/18/2021 at 10:48 AM, realpseudonym said:

I'm not a bank, but I do have a contract with every client. If I find out that a client is willfully evading the terms of my retainer, I view them as an inherently greater liability, which decreases their value as a client. I may not act on the knowledge. It might not be worth the trouble. But the idea that you can separate out economic incentives and breach of contract is absurd. My contract protects my business interests. The two are one and the same. 

Banks are greedy. Traders are greedy. Bulls make money. Bears make money. Retail Pigs get REKT.

On 9/18/2021 at 10:56 AM, Hegdis said:

If I found out an interviewee took the position of “yeah but will I get caught” when making choices about abiding by contracts and agreements, I would end the interview. And half expect to see them again sometime on my client list.

Rational choice theory says there is an inherent calculation of whether the potential gains or benefits outweigh the potential risks or negative consequences at the moment...one could argue there is imperfect information available when making decisions with long term effects. We don't know what we don't know.

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On 9/18/2021 at 12:28 PM, Vizslaw said:

This pretty much sums up insurance benefits fraud and scams.

"Everyone does it"

"I have $500 in coverage for physio so I'm entitled to those funds, so whats the big deal if the clinic bills my massage as physio, I was going to get that $$ anyway"

The thing that I find the most shocking is that these schemes are so common. Like people with good jobs are defrauding their insurance company for a couple thousand dollars over a few years. It's wild. Total definition of short-sighted behaviour. And then the shock after being told "well, there's a good chance you're going to lose your job, have to repay the amount anyway, and face a potential criminal investigation"

You can't be serious. I used a "Health Spending Account" amount which actually was I think $500-600 towards a crypto mining PC. No one cares, no one checks such a low amount, and the list of allowed expenses included everything from tuition to professional development, to computers, and who knows what else. I can't remember but there were many miscellaneous and vague categories. Point is it doesn't matter, the money is there for employees to use. The insurance company, the bank, the employer is not your friend. ZERO chance of losing your job or anyone caring, EXCEPT THE INSURANCE COMPANY LAWYER lol. Maybe.

Of more concern to me are the lawyers making well into the six figures as a matter of public policy when the regular employees make a third to half of that.

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Thrive92
  • Applicant

This thread overall is not smart

OP I highly recommend you do not invest the money that you are borrowing with interest if it goes against the terms of borrowing the money to begin with. Trying to balance the possibility of getting caught or not is irrelevant.

If the banks really want to find out who is behind your profile, all they need to do is look at your post history, find out that you are entering your 2nd year, applying for a PSLOC, you reside in Kingston, and go to Queens. Right then and there, they can see who applied in their second year of Law from that school and if their home address is in Kingston.

Please do not invest with borrowed money.

Edited by Thrive92
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On 9/18/2021 at 1:20 PM, cherrytree said:

The way I see it, using your PSLOC to invest is like not paying your GO train fare. Anyone who has experience taking the GO from the suburbs know that there are no fare gates or cameras around the fare machines to ensure that every passenger pays their fare for every trip, but at least before the pandemic, you'd know better than not paying because fare inspectors do check every single person's fare, and hiding in the bathroom won't save you forever. Not to mention the physical cringe and embarrassment of having a full train of commuters looking at you while you try to explain to the fare inspector why you didn't pay. Sure, you save maybe $20 a day, one ticket will cost you $85 in fines, if you manage to successfully dodge the train fare for a week or two (probably very feasible nowadays with decreased ridership and decreased frequency of fare inspection on the GO), it's still "worth it" even if you fork over the fine. But I just don't want to be that kind of person and take that kind of mental burden with me every single day, wondering if this is the day I will get caught for fare evasion.

In the same vein, I don't want to live with the risk of an investment portfolio funded with my PSLOC money that has to make above a certain percentage of return in order to be "worth it". I just don't want to live with it every single day of having that portfolio supposedly making money for me, I'd rather make money in other ways while I work on getting through law school okay. So I guess ultimately IMO it just comes down to what kind of life you want to live and whether you can be the kind of person who can live that kind of life. There's no right-or-wrong debate in a public forum involved in that kind of private decision-making; if you know yourself, you know.

This is the most ridiculous thing I have read. While I agree you shouldn't invest debt or with credit aka margined unless you know what you are doing, the upside is as my previous posts explained, asymmetrical. Or at least it is with tech and crypto. You're missing the whole point. It's about the opportunity cost. I have a full-time job now but the money for investments DOES NOT come from employment income. It comes from other previous investments. This is why the rich get richer during asset bubble peak cycles. If I had done it a bit earlier at the beginning of law school and went all in crypto and bought the dips I would be extremely wealthy now.  And also why the working people or "savers" get poorer, while the "invested" rich get richer. By the way, I took the train/subway/LRT regularly without paying the "fare". Never had a problem. Having said that, now I drive a new high end Lexus... I mean who still takes public transportation during COVID? 

On a financial theory perspective, fines and other penalties and risks are usually the cost of doing business. We take risk on in order to get much higher returns in the future. Think of it as risk premiums.

On 9/18/2021 at 1:26 PM, Disbarred said:

I just reviewed the loan agreement and don’t see anything at all related to how I spent the money. Again not saying there isn’t something further, I may have signed more paperwork that I don’t have handy. 

Obviously I’m not recommending anyone try without verifying it with their bank, but based on a review of my agreement and my discussions with the bank there doesn’t seem to be any restriction on the Scotia LOC

Banks are greedier than you think. Everyone just wants to make money. Period. They'll enforce on you if you do something that involves them not making money from you. Perversely, the more money is involved, the less the chance of anyone bothering you about  legal "technicalities". The customer comes first!

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Thrive92
  • Applicant
15 minutes ago, CRYPTOLAW said:

This is the most ridiculous thing I have read. While I agree you shouldn't invest debt or with credit aka margined unless you know what you are doing, the upside is as my previous posts explained, asymmetrical. Or at least it is with tech and crypto. You're missing the whole point. It's about the opportunity cost. I have a full-time job now but the money for investments DOES NOT come from employment income. It comes from other previous investments. This is why the rich get richer during asset bubble peak cycles. If I had done it a bit earlier at the beginning of law school and went all in crypto and bought the dips I would be extremely wealthy now.  And also why the working people or "savers" get poorer, while the "invested" rich get richer. By the way, I took the train/subway/LRT regularly without paying the "fare". Never had a problem. Having said that, now I drive a new high end Lexus... I mean who still takes public transportation during COVID? 

On a financial theory perspective, fines and other penalties and risks are usually the cost of doing business. We take risk on in order to get much higher returns in the future. Think of it as risk premiums.

Banks are greedier than you think. Everyone just wants to make money. Period. They'll enforce on you if you do something that involves them not making money from you. Perversely, the more money is involved, the less the chance of anyone bothering you about  legal "technicalities". The customer comes first!

@TheCryptozoologist? Is that you?

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Vizslaw
  • Lawyer
37 minutes ago, CRYPTOLAW said:

You can't be serious. I used a "Health Spending Account" amount which actually was I think $500-600 towards a crypto mining PC. No one cares, no one checks such a low amount, and the list of allowed expenses included everything from tuition to professional development, to computers, and who knows what else. I can't remember but there were many miscellaneous and vague categories. Point is it doesn't matter, the money is there for employees to use. The insurance company, the bank, the employer is not your friend. ZERO chance of losing your job or anyone caring, EXCEPT THE INSURANCE COMPANY LAWYER lol. Maybe.

Of more concern to me are the lawyers making well into the six figures as a matter of public policy when the regular employees make a third to half of that.

I wasn't referring to health spending accounts in my previous message but those who have extended health care benefits through the usual providers like Sun Life, Manulife, etc. who submit false claims. We have a long list of clients who lost their jobs from exactly that before they came through our doors. 

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I've seen a number of criminal files concerning people who really honestly truly believed they were outsmarting the system. When it involves defrauding employers, the presumption is jail time, regardless of lack of record.

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44 minutes ago, CRYPTOLAW said:

By the way, I took the train/subway/LRT regularly without paying the "fare". Never had a problem. Having said that, now I drive a new high end Lexus... I mean who still takes public transportation during COVID? 

I am impressed. It’s genuinely hard to fit so many unlikeable sentiments into so few words. Well done. 

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Thrive92
  • Applicant
25 minutes ago, Hegdis said:

I don't know about the rest of you but I could do without finding out. Bye bye.

Wait, so hes banned? Permanently?

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Pecan Boy
  • Articling Student
4 minutes ago, realpseudonym said:

I am impressed. It’s genuinely hard to fit so many unlikeable sentiments into so few words. Well done. 

The insufferableness of crypto bros truly knows no bounds

 

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efrefgg
  • Undergrad

1962919246_ScreenShot2021-11-14at8_05_13PM.png.41363ee12eb318459f0617a4ee600b83.png

This man is a hero. A visionary in trolling. Not subtle, mind you, but it made my day.

Edited by efrefgg
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Kimura
  • Lawyer

Just use cash you earn from your summer job/articling to invest in some low cost ETFs (Vanguard, Blackrock, etc.).

If using your PSLOC to invest is breaching your contract with the bank - don't do it. You took 1L contracts - the whole course was about breaching contractual obligations and the consequences thereafter. It's an incredibly bad look for a law student and someone who will eventually be a lawyer to knowingly breach a contract.

Investing throughout law school has been a constant debate of mine all along due to debt repayment obligations and proper allocation of my cash. I've decided I'll split investments and debt repayment (as opposed to going all out on debt repayment first) due to the effects of compound interest - it's crazy how much of a difference 5 years can make. The issue, however, is that the PSLOC is a variable rate loan which carries its own risk when trying to forecast debt repayment and investment strategies. 

1 hour ago, CRYPTOLAW said:

It comes from other previous investments. This is why the rich get richer during asset bubble peak cycles. If I had done it a bit earlier at the beginning of law school and went all in crypto and bought the dips I would be extremely wealthy now. 

Regardless of whether CRYPTOLAW is trolling, hindsight is 20/20. Dumping all of your money into one asset class or something as volatile as crypto is a zero-sum game. Sure, we now know how much you could have made had you invested in Bitcoin years ago, but it also could have gone the complete opposite way.

 

1 hour ago, CRYPTOLAW said:

On a financial theory perspective, fines and other penalties and risks are usually the cost of doing business. We take risk on in order to get much higher returns in the future. Think of it as risk premiums.

Lol.

Edited by Kimura
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  • 3 weeks later...
easttowest
  • Lawyer
On 11/14/2021 at 7:27 PM, Hegdis said:

I don't know about the rest of you but I could do without finding out. Bye bye.

Thank you.

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CleanHands
  • Lawyer
5 minutes ago, efrefgg said:

She only gets 2 freakin' years for all of that!? Holy hell, maybe I oughta go into fraud!

And that's after it got increased on appeal.

Not uncommon. Appellate courts have repeatedly had to explicitly state that stealing six figure amounts from one's employer is bad, because trial court judges keep giving people who do that CSOs. Usually with these sorts of crimes the accused has no criminal record and is a gambling addict, and it's non-violent crime. Trial judges are so used to dealing with people with 10 page long criminal records who assault the first person they see every time they are released from custody that they feel inclined to give these people a break, heh.

But yeah, white collar crime in general should be treated more seriously than it usually is.

Edited by CleanHands
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9 minutes ago, CleanHands said:

And that's after it got increased on appeal.

Not uncommon. Appellate courts have repeatedly had to explicitly state that stealing six figure amounts from one's employer is bad, because trial court judges keep giving people who do that CSOs. Usually with these sorts of crimes the accused has no criminal record and is a gambling addict, and it's non-violent crime. Trial judges are so used to dealing with people with 10 page long criminal records who assault the first person they see every time they are released from custody that they feel inclined to give these people a break, heh.

But yeah, white collar crime in general should be treated more seriously than it usually is.

Reminds me of Warren Buffet's 1988 letter to shareholders 

Quote

Over the years, Charlie and I have observed many accounting-based frauds of staggering size. Few of the perpetrators have been punished; many have not even been censured. It has been far safer to steal large sums with a pen than small sums with a gun.

 

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