Borrowing Money to Invest in Index Funds?

Please pardon my ignorance as I'm just starting out in my journey towards financial independence.

So I have been looking into and liking the idea of investing a large sum of money into an low to medium risk index fund with possibly Vanguard.

The problem is that I don't have a large sum of money. I'm at the stage where I'm paying off my debt, while working a decent job, and starting a small business on the side.

I had this idea: can I borrow money from a bank to invest in an index fund? I'm not talking about a regular personal loan. I'm talking about the concept of borrowing someone else's money to make money with. Kind of what banks do with our money.

Is there such a thing or an institution that lets regular Joe's like me to borrow for the purpose of investing in an index fund?

Please don't laugh at me. I'm curious. I am under the belief that those in the know do something along these lines. Phone Post 3.0

Depending on how much you deposit in your account, your brokerage firm might let you borrow against the equity in your account to lever your position (buying on margin).

I'm not aware of any institution that would lend money to be invested in capital markets.

If I recall correctly, it may be prohibited in fact. Not sure about that though. It's been awhile.

This is what caused the great stock market crash. It's called gambling with money you can't afford to lose. Phone Post 3.0

Look up the great depression for a nice example of why this is a bad idea. Phone Post 3.0

AG_bull - This is what caused the great stock market crash. It's called gambling with money you can't afford to lose. Phone Post 3.0

Truth. Margin call bitches!

You will have to outperform the interest after taxes. Good luck Phone Post 3.0

Don't some experts say the US market is overvalued by 40% as is?

Paying off high interest debt is always a sure way to make money.

Your making the money your not giving those bastards in interest. Thats how I look at it but I'm not very financially literate as of yet.

Having been through the 2002 and 2008 corrections, I would advise against this.

BJ Penn Forever - Your making the money your not giving those bastards in interest. Thats how I look at it but I'm not very financially literate as of yet.
Yeah I'm tackling the debt with the highest interest.

My long term thing is to take the profits i make from my side business and invest that in an index fund that I would let sit for like 30 years.

However, I had the bright idea (maybe not) of investing borrowed money into an index fund instead. And then the difference between the index fund and borrowed money would be my profit after taxes of course. Phone Post 3.0

Back from the dead - Having been through the 2002 and 2008 corrections, I would advise against this.
I read that you can offset these depending on the type of index fund.

Can you elaborate on your experience? Thanks. Phone Post 3.0

"I'm at the stage where I'm paying off my debt"
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That's the best return on your investment.

After paying that off, borrowing money to invest in an index fund is a bad idea. The rate do return on funds is NOT guaranteed. If/when the market corrects, you will lose a large chunk of your money. Plus, you will owe interest on top of that. You will be a debt slave. Phone Post 3.0

DTAlexONE - 
Back from the dead - Having been through the 2002 and 2008 corrections, I would advise against this.
I read that you can offset these depending on the type of index fund.

Can you elaborate on your experience? Thanks. Phone Post 3.0

My experience was the same as most, lost about half the value of my 401k over the course of a year. So I would be pretty hesitant to invest at the top of the market.

I knew a guy who's parents were footing the bill for college. He out the full amount he could in student loans, and put it all in the market.

This was late 90s tech boom, so it was easy money if you cashed out before the dotcom bust.

(Please, someone ask how I know him!) Phone Post 3.0

Just trade on margin Phone Post 3.0

Slapsymaxi - I knew a guy who's parents were footing the bill for college. He out the full amount he could in student loans, and put it all in the market.

This was late 90s tech boom, so it was easy money if you cashed out before the dotcom bust.

(Please, someone ask how I know him!) Phone Post 3.0
Is he you? Phone Post 3.0

No, I knew a girl he took a couple friends and went air tight ski pole on! Phone Post 3.0