I know no matter how I spin this I will end up getting smashed but that's kind of what I want – perspective. Here's the gist. I have a decent sized portfolio sitting in my Robinhood brokerage. Enough so that my entire portfolio would need to decline like 90% to receive a margin call. I already pay for Robinhood gold because I like the investing insights from Level 2, the deposit bonuses, IRA bonuses, the cash card, etc. Therefore, yes there is a fee to use margin but I am going to pay it regardless. With the Gold, I am given access to 1000$ of interest free margin. Why would I not invest that in a treasury security that is currently paying me 5% and cover part of my fee for gold while slowly getting me returns over the long term? The alternative would be the sunk cost of the Gold fee but as I mentioned, I already pay that and will do so anyway. Even if interest rates dropped to 2%, I am still partially getting to cover my Gold fee anyway, isn't that worth it?
So please, destroy me, I am sure I am missing something otherwise Robinhood wouldn't be offering this. I know there are risks involved and this is not free money, I could absolutely lose and owe them back money, treasuries just happen to be the most risk free investment I can use the margin to purchase. I appreciate any feedback and advice, thanks guys.
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