Warning. The following may cause some of you to swallow your chewing gum.

In a nutshell, I have borrowed HUGELY to fund my share purchases in the past. This included mortgaging the house, then mortgaging it more, then mortgaging it to the hilt.

Further than that, it has then involved taking my resulting shareholdings and using it to secure large borrowing (via margin lending) to buy more shares, then putting those newly bought purchases into security to buy more shares to borrow more to buy more to borrow more etc etc etc.

If that wasn't enough, I borrowed even more (than one would normally be allowed) to get more shares in a company I now had a large shareholding in who were issuing bonds to existing shareholders, whereby my lender wanted the bonds and the more shares I had before the cut-off date, the more bonds I got. I had to commit to giving my lender the bonds to pay off this 'extra' loan as soon as they were issued to me of course.

There is more behind-the-scenes info that needs to put the above into a more understandable context but the upshot is that the results were nothing short of a dream come true. Was it stressful?… absolutely, indescribably stressful at times.

The thing is this, if you know you will get 20%+ return per annum (made up of capital gain + post-tax dividends) then why not borrow as much as you can at 8%? The more you borrow the more you make (within the limits of not overdoing it should a Black Swan event occur) …. and yes the risks are a lot lot bigger… get it wrong and you end up with no money, no shares, and serious serious debt.

But with risk comes reward. You can't make it 'big' if you don't have volume. To buy volume you need money. If you don't have the money you have no choice but to borrow it. I have yet to hear of another way to do it.

……….

The above scenario occurred (in general terms) around the turn of the century. These days, for the above reasons, I happily maintain significant debt to fund my shareholding/share-purchases but I only need to sell 10% of my holdings to pay it all off. And I would have a lot more 'in the bank' if I wash't so conservatively geared (by comparison) these days. My approach has never let me down (yet), and I can afford a mistake or two now.

I am not saying my approach is either right or wrong… but it worked for me given my style. It's not a style that would (or probably should) work for anyone or everyone. Disclosure: I am not a trader.

Please do your own research in these matters. It is your money and prosperity at stake.