But if your stock or cryptocurrency drops in price, you have to find another way to pay back what you owe. Your broker may issue a margin call and then you either have to deposit more money into your account or sell some of your other investments to pay your debt. If you don’t pay your broker back, it can even liquidate your positions without your consent.
If Dogecoin’s price had plummeted, Contessoto could not only have lost all of his savings, but taken on new debt as well. That’s why investing on margin is usually a bad idea. There’s a lot of risk involved and when you factor in the interest you pay to borrow the money in the first place, you may not make a huge profit even if your investments generate decent returns.
Stop trying to become an instant millionaire
The world is always going to have people like Contessoto who catch a lucky break by betting it all on an investment they found on social media. But there are a lot more who make the same bet and come away empty-handed, possibly ending up worse than where they started.
Most wealthy investors don’t get to where they are by making risky moves like those described above. They make sure they’re well diversified, have financial safety nets in place, and do their research to know they’re investing in quality companies. That’s how I approach investing, and if you’re serious about growing your wealth, that’s what you should do too.