Yes, it does matter: The entire reason this scheme is supposed to work is the gap between the % in asset value gains over time and the % interest rate charged b

Yes, it does matter: The entire reason this scheme is supposed to work is the gap between the % in asset value gains over time and the % interest rate charged by these supposed bankers to the ultra-wealthy over the same time. If those are equal, this scheme is a terrible idea. You’d be much better off selling some % of the assets and paying LTCG as a fraction of the gains than paying all of the gains in interest. So now the question is simple: If you can “buy” a risk-free 8%-earning asset, so can your friend the banker. But you can’t. You can buy a risky asset and hope it does better than the interest rate long-term, so your banker doesn’t invoke his rights to a lower yield but safer investment, which involve being able to seize your asset if its price declines. If the rich could buy a risk-free 8% asset and borrow against its value with a 4% loan, they’d have a perpetual money machine. No such magic exists.