3 ms·
In practice the best strategy is not to borrow the maximum against the capital appreciation. You use this system to fund your day to day expenses as one part of
by simonh 5y ago
In practice the best strategy is not to borrow the maximum against the capital appreciation. You use this system to fund your day to day expenses as one part of an overall wealth management strategy.
- WalterBright 5y agoYou can keep under the maximum, and still get caught with a plunging asset value, leaving you with a negative net worth. I had a stock that dropped 90% in a period of a couple weeks. I didn't borrow against it, but I could have easily borrowed 40%, then when it dropped, I'd be holding the bag. The article's advice is glib and dangerous.
- simonh 5y agoIt’s not advice, it’s just explaining the strategy.
- WalterBright 5y agoIgnoring the costs (of borrowing) and the risks (of winding up deep in debt) makes the article glib and dangerous.