Well one thing you seemed to not have considered, basing your returns purely on past average returns over 30 years, is that if there is a downturn within your 5 years or so of investing, you may not only not recover your investment returns but you will be getting charged interest as well.
Don't get me wrong, if you think you can take advantage of margin to help increase your returns, then good go for it. However, I think before you start you should not only look at what can go right (ie. potentially higher returns), but more importantly you should carefully consider what can go wrong (ie. potentially higher losses) and develop a risk management plan spelling out what your actions would be if certain things don't go as you presumed.
The worst thing that can happen is if you have no plan and things start heading south and then you panic sell or just remain paralysed not knowing what to do or what action to take and watching your account fall off a cliff. You want to avoid having sleepless nights.
I will give you an example of having a plan, a real life example, my own situation. I trade individual share CFDs on margin, my actual physical account I have started with is $50K, however the margin allows me to trade a virtual account up to $200K. Basically each individual share has a margin of between 5% to 30%. At 5%, for a $10,000 stock purchase my actual outlay would be $500 and I would pay 4%p.a. interest on the full $10,000 each time I keep the position open overnight. At 30%, for a $10,000 stock purchase my actual outlay would be $3,000 and again I would pay 4%p.a. interest on the full $10,000 each time I keep the position open overnight. I have conservatively used an average margin of 25%, allowing me to trade up to $200,000 worth of shares on only $50,000 of initial capital.
The first thing in my plan is not to overtrade. To do this I position size each of my trades. I also have conservatively used an average margin of 25%, allowing me to trade up to $200,000 worth of shares on only $50,000 of initial capital. My actual average margin would be closer to 15% allowing me to actually trade up to a virtual account of over $300K. Why have I done this? To be conservative and to allow a margin of safety in case the market does start heading south, so I don't end up getting margin calls and have to sell in a hurry and in a mad panic.
The next thing I do is to have a stop loss order on all of my trades as soon as the order gets triggered. I use a 16% trailing stop loss which allows me to capture the medium term uptrend but protects me if the stock starts down-trending. It also allows me to remain in my position during normal daily swings up and down, usually not stopping me out prematurely.
I also use the 16% stop loss to work out my position size, and try to maintain a portfolio of 15 stocks. Most people new to margin get in trouble by overtrading. Without margin they could afford to take out a position worth $10K, now with margin they can take out a position worth $100K, so they do just that thinking when it goes up in price they will make 10x the profits. However, they do not consider the consequences if the price starts dropping sharply.
I had back-tested this strategy over both 5 years and 10 years (to take in the effects of the GFC). Over 5 years the average annual return was approx. 20%p.a., turning $200K into over $420K. Over the 10 years the average annual return was approx. 15%p.a., turning $200K into over $500K, mainly due to being quite flat over 2008 and 2009, because the trading strategy does not trade when the overall market is down-trending.
I started live trading the strategy in early February this year and in just under 5 months my profit is $25K, 12.5% on my virtual account of $200K and 50% return on my actual account of $50K. My win percentage is currently 65%, and my average win size is just over $2,000 whilst my average loss size is just over $1,200. I would like to get my average win size to at least 3x my average loss size over the long term.
As you can see, another benefit of planning and recording all your trading outcomes is that you can review the performance of your strategy over time.
So to summarise, before you do start trading with margin, have a risk management plan in place and do not overtrade either on any one trade or over the whole account - leave a buffer so that you don't need to panic when things don't go your way.