Webull Margin vs Cash Account - Be Careful - YouTube

welcome back to another video today we're  talking about weibull a cash account versus  

a margin account why am i holding credit cards  up because that's what we're talking about when  

it comes down to margin i'm gonna break it all  down for you but first i gotta say that a lot  

of you have been asking on my other videos what is  the big difference between margin and cash and as  

always when you comment on my videos ask and you  shall receive now of course i got to welcome out  

my sweet life for subscriber family welcome back  to another video and you know if you're not part  

of that family make sure you subscribe because  on this channel we talk about personal finance  

and everything so you can become a future  millionaire and live your ultimate suite life  

now question of the day have you used margin  before in a brokerage account if you have  

comment below what kind of strategies did you  use was it successful was it not let's hear from  

you and if you're wondering well that's why i'm  on a video because i don't know what margin is  

don't worry i got you in good fashion as always  i'm going to pull up my screen right here on my  

iphone now don't worry i'm also going to show you  the desktop version as well because i know a lot  

of you some of you use the app some of you use the  desktop we're going to break them both down today  

and make sure you stay with me through the  entire video because i have another bonus tip  

to make sure that you're maximizing your weeble  experience so that you're growing your portfolio  

over a long period of time and i want to show you  a way that you can make sure you're on track with  

that opportunity so make sure you stick with me  let's get through it with the app first i'm going  

to break down exactly what all of these numbers  mean because a lot of you had a lot of good points  

in that weeble beginners tutorial that i had i'll  link that video up above if you want to check it  

out but let's break this down this is my portfolio  currently at the moment you can scroll down here  

you can see all of my positions currently at the  moment with weibull this is not financial advice  

make sure you do your own research don't just copy  what i'm doing you got to do what's right for you  

and what you're most interested in but at the top  you can see it says net account value and right  

now it's sitting about 9 200 that number will  fluctuate because of course the market fluctuates  

every single day every single minute but that's  the net account value that means all of the shares  

of stock down below here that i just showed you  with anything that's in my cash balance it's right  

here which is 55.90 if you add those two numbers  together that's what gets you to 90 to 55-ish okay  

now right down in the middle of the screen you can  see another example that market value is 91.9939  

plus 55.90 in my cash balance that equals the net  account value now here's where things get a little  

bit interesting do you see down below here it  says day trade bp 24 363 dollars and then you see  

overnight bp and that's sitting at nine thousand  twenty dollars what the heck does that mean  

that is what margin is now here's an important  point you may be opening your weibo account  

right now and saying wait i don't see that what's  going on what's wrong with my app nothing's wrong  

with your app my friend what happens is let's say  you just opened your weibo account let's say you  

put in a hundred dollars because you know if you  sign up with weeble they give you free stocks and  

then when you deposit your first 100 that you  can freely trade with they sometimes give you  

additional free stocks click the link down in the  description below to see what kind of promotion  

they're running because sometimes they can give  you one stock two stock three stocks four stocks  

it's worth checking out but if you only  have a hundred dollars in your account  

you're not going to see the margin you need a  minimum of two thousand dollars in your weibo  

account in order to activate margin so once you  build your portfolio up to 2000 whether you're  

seeing growth out of your stocks or you deposit  2 000 or more then you'll get access to margin  

now weeble says in the day trade bp and day trade  means when the market is open from 9 30 a.m to 4  

p.m eastern standard time every day you can trade  up to four times your net account value in margin  

mine's a little bit under that right now with uh  because if you add if you multiply 9200 times four  

that does not equal 24 000 i think it's somewhere  around 36 but it's up to four times so 24 000 is  

what i can trade with when the market's open and  then because weibo is awesome and has extended  

hours you can also trade in extended overnight  hours which i have uh two times so four times for  

the day trade two times for overnight i will tell  you and i'm gonna be transparent right up right  

here right at the point i actually don't trade  with margin even though i have it available here  

i don't do it and i'll explain why in just a  moment the cash balance right here i want to  

dig into this for a second you see it says 55.90  that is my cash i can do whatever i want with it  

i got that cash because i either won transferred  money in for my bank account two got dividends  

from dividend paying stocks or etfs or three i  sold a share of stock or etf and when you sell  

that goes into your cash balance now i can take  that and transfer it into my bank account or i  

can buy some additional etfs or stock so i can do  that in many different ways i'll link a video up  

above on how you can buy stocks in weibull because  that's not the point of today's video but i can  

take that 55.90 and do whatever i want with it  so let me choose kbwi here it's going for 22.25 a  

share i can actually buy one because i have 55.90  so i can buy a full share of that and it would  

go through and process out of my cash balance i  could actually get two shares because you can see  

the estimated amount is 44.50 and i have 55  so i have enough to afford two shares of stock  

now i could also go a little bit crazy okay i can  go above my cash balance and that's when margin  

comes into play so i can go back to kbw look what  i can do i can buy look at that 1000 1073 shares  

of kbwi look at the price 23 874 that would mean  i'm trading on margin when you trade on margin  

weibo is going to charge you an interest fee  that's kind of how it works if you follow me  

for any period of time you know right now my big  focus is i want to pay off our mortgage early  

i want to pay it off early so we can be come  asset millionaires i don't want to have debt i  

don't want to owe money to anybody and i hate  paying extra money just to have debt kills me  

and that's kind of what margin does for you i'm  going to pull up right here on the screen so  

you can check it out with me exactly what these  guys are charging you when you trade on margin  

so for your first zero to 25 000 if you have  that leverage in your margin account as i  

showed you right here on the screen they're  going to charge you a margin rate of 6.99  

and then you can see as it goes up if you have  some crazy margin that you're trading on let's say  

you're meet kevin and you got millions of dollars  and you're trading on margin your interest rate  

of course goes down a little better i should  say your margin rate goes down the more that  

you use but it isn't a waterfall effect so for  example if you trade up to 25 000 you'll have 6.99  

but as you trade now 26 27 28 29 000 it will then  be six point nine nine percent on the first twenty  

five thousand dollars and then six point four  nine percent on the next five thousand dollars  

whatever that would be so let's say you got 000  you got 6.99 trading on the first 25 000 and then  

uh 6.49 trading on the next five thousand dollars  and this kind of happens with any brokerage any  

brokerage that you borrow on margin you are gonna  have to pay a margin rate which i look at it as  

a debt interest rate that's kind of how i look  at that and you can do a couple things with that  

a lot of people do a lot of day trading with  margin they think okay this stock right here  

is about to go up i'm going to trade on margin  i'm going to buy a bunch of shares and i'm going  

to sell it in the same day cover my margin rate  because i'm gonna make more money than the 6.99  

or whatever that percentage is and then take the  profits and run there's a couple problems i have  

with that first of all again i don't like trading  on debt i don't like the risk of the casino of  

saying okay what if something weird happens and  it does fall down or it doesn't rise as much as i  

wanted it to and then i'll end up having to pay  extra money because it only rose three percent  

and i'm on a margin rate of 6.99 oh if you're  sitting here and you're like oh this is too much  

information that is why i focus on investment  apps for beginners because i don't like margin  

i would rather say look i'm going to find a way to  transfer about 100 bucks in or 55 bucks in and i'm  

only going to use my cash balance to trade that  way down below here on my weibo account as we just  

explored everything i have invested is my  tried and true hard earned income it's not some  

margin rate i'm not a big fan of that now before  i get to the bonus tip on how to make sure that  

you're performing well in weeble i do want to pay  some respects to our desktop users a lot of people  

have been asking me for what uh does this look  like from a desktop perspective in weeble so i'm  

gonna pull that up right now okay so here we are  on the desktop i'll be honest i use the app more  

than a desktop so i bear with me as i go through  this so you got the net account value right here  

at the top just like we saw on the app and then  right over here on the left you can see here is my  

day trade bp and my overnight bp very similar to  what we saw in the app and then the cash balance  

so same type of deal here if  you go into this and then you  

basically buy a share of stock or an etf you just  got to remember for yourself to use your cash  

balance only the moment you step above that cash  balance you're going to start trading on margin  

and boom boom boom here come the margin rates now  don't forget if you're finding this stuff helpful  

smash that like button down below certainly would  appreciate it and so would the youtube algorithm  

now i promised you guys some bonus tips here  you know it's not about cash or margin on this  

bonus tip it's about how well are you performing  and you can see right here at the top i have my  

app screen up again it says open p l that means  profit and loss now of course right now today my  

poor sad example i am losing money so i am down  okay it's jumping around here but i'm at 98  

i'm gonna round that because you know it's gonna  keep hopping around but i am down for today this  

means for today that doesn't mean overall in order  to find overall there's a couple things you can do  

because it shows that open p l it's trying to tell  you that is what's going on today just so you can  

stay plugged in with the day's activity but what  you want to do is come down here to the center and  

click on performance once you click on performance  that's where you can start to see what's going on  

so if i go all the way to the left that means  five days this is what my performance is in the  

last five days you can see i'm down 54 86 in  the last five days i can hop over to a month  

you can see i'm down 41.86 and by the way the  market's acting up right now i'm not worried  

about it and you never ever ever ever ever sell  when the market's down if you sell that's like  

jumping off a roller coaster in the middle of the  ride you don't do that you wait till the roller  

coaster gets back up and then you can decide if  you want to exit safely once it returns to the  

station if you're jumping off and you're nervous  and you're scared and you're selling at a loss  

you're doing it all wrong guys you're not  investing for the long term you're trying  

to chase this dream of getting rich overnight  and what's going to happen is that your fellow  

suite lifers are going to live the sweet life  because they were smart and they were looking  

at what is the long term in this game so if  you keep going i had some very bad ordeals  

going here see three months six months you can  see a little bit of a pop there that happened i  

was in the green things were looking good  and then i made some bad decisions of uh  

you know buying some shares that started tanking  i will tell you that neo is down not worried about  

it i'm holding on for the long game you know i'm  not going to sell it because again i don't jump  

off a roller coaster at the wrong moment but you  know that's what's kind of bringing me down right  

now are these big tech stocks but again i know  they're going to bounce back i got my apple i  

got my neo and i'm just going to keep riding the  wave until they start coming back up so anyway  

that's how you see that and then you can say is my  portfolio growing the way i want or is my strategy  

the way i want to be now i'll tell you i could  sit here and say oh my gosh i lost 532 dollars i'm  

screwed i'm not worried about that because again  you've got to invest with money you're okay losing  

and what happens with that is you're playing the  long game and then a year from now two years from  

now 10 years from now you're going to look at this  and that number is going to be different typically  

it's going to be in the positive go google the s  p 500 average rate of return over its course of  

period of time you're going to see it gives you a  number of about 10 percent so if you look over the  

average of all the highs and all the lows and all  the recessions and depressions and everything that  

happened the s p has grown on average 10 which  means that eventually this will turn green if i  

hold for the long game and that's kind of the game  and the goal of what i'm doing with my account so  

so hop over to that performance and really pay  attention to say okay this is what's going on  

this is how i feel i feel good about it and  another thing you can do is you can look at  

your dividends that are coming in you got to buy  dividend paying stocks if you're interested in  

getting paid dividends that means every share  of a company that you own they're going to pay  

you either on a monthly or a quarterly basis  simply for just owning a share of their stocks  

pretty darn cool there is a dividend  video coming so make sure you subscribe  

so you don't miss out when that video drops but  if this video was helpful tap that like button  

down below make sure you comment if you have any  other questions that you want to see me address in  

a future video and until next time check out  these other weeble videos that will help you  

get a little bit more intuitive with this awesome  app we'll see you next time on the next video