Comment on Borrowing money against their stuff to get more stuff to borrow money...
merc@sh.itjust.works 1 week agoYour kids inherit the stock at its current value and immediately sell $10M worth to pay off original loan
And the bank says “um, what about the rest?” In the 1970s and early 80s the inflation rate was, at times, above 10%, so your loan’s interest rate would have been above that. But say on average the loan’s interest rate was 5% per year over 30 years… the bank isn’t going to be content for just the original $10M.
WoodScientist@lemmy.world 1 week ago
All that matters is that your portfolio grows faster than the interest rate.
merc@sh.itjust.works 1 week ago
That’s what success looks like. But, you don’t know if you’re going to be successful when you take out the loan. If there’s a market downturn you’re on the hook for the loan and your portfolio has crashed. If you sold a few stocks instead of taking out a loan, you’re insulated from that possibility.