How do I model investments financed by a margin loan?
Where to find it: ACCOUNTS and INVESTMENTS
Enter the holdings you own in ACCOUNTS and INVESTMENTS. Record the borrowing separately in LOANS as the appropriate line of credit, selecting yourself as borrower and the institution as Other lender. Select the investment account as collateral and enter the loan balance, credit limit and interest assumptions.
For example, $120,000 of holdings financed with $20,000 of debt represents $100,000 net before other costs. Entering both a negative $20,000 Cash holding and the same $20,000 loan would deduct that debt twice. Reconcile imported balances before adding a second representation of the borrowing.
The loan setup models interest and the available borrowing limits. Review its interest-deductibility selection and PRIORITIES according to the arrangement you intend to test. TIME MACHINE borrows when cash is needed and the limits permit; a credit limit is not an instruction to invest the entire available amount.
Negative Cash also has a separate use in the rebalancing tool to represent funds to be raised by selling holdings. That temporary calculation input alone does not create a complete ongoing margin loan.