Should You Borrow Against Your Assets? Here’s What to Consider

If you’ve got millions of dollars in assets, here are three reasons I would borrow against them and three reasons I definitely wouldn’t. I’m Tyler, a former financial advisor and portfolio manager. Now I make financial content for free so you don’t have to pay for it.

Reasons to Borrow Against Your Assets

1. Liquidity Without Selling

I get cash without triggering capital gains taxes. Cool.

2. Lower Potential Rates

Asset-backed loans often beat the rates of credit cards or personal loans. Also cool.

3. Stay Invested

My portfolio keeps compounding while I cover one big expense or opportunity. Very cool, especially if I have millions compounding.

Reasons Not to Borrow Against Your Assets

1. Market Risk

If the market tanks—or when the market tanks—margin calls can force me to sell at the worst times.

2. Rising Rates

Most of these loans are variable, so costs can and do climb quickly.

3. Overspending Illusion

It’s very easy to overspend when borrowing feels painless. But this is not newly minted money; it’s a loan against your assets.

Conclusion

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