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Originally Posted by skins
That's right, but for a small amount like $1000 it's probably not worth it. You'll get the tax back on your interest payments, so you'll save a bit. But you also now have to make a larger return to cover the interest payments and actually make a decent profit.
Investment firms such as Ernst & Young or The Investment Group can set these kinds of thing up on a much larger scale, like $250,000. They're called leveraged loans and I think they don't require collateral (the investment is the collateral). The idea is, instead of putting $10,000 a year into a savings account or RRSP, you pay $10,000 in interest towards a loan which is invested (at 5% you could borrow $200,000). That way you have a much higher number to start compounding from and you're interest payments are tax deductable. Depending how the investment goes you could owe or own hudreds of thousands of dollars.
Borrowing to invest can either be the smartest or stupidest thing you do financially.
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Basically anywhere that handles investments can set these up for you actually. Generally the investment is the collateral and you actually don't need huge returns to make this work in your favour, as long as interest rates are low.
Generally you have a break-even point of about 3.5% right now. In other words a return of greater than 3.5% puts you in the black.