-multisnips-Biodom, it's not the first time you use the word 'bearish' to define JJG's ladder system. Why would you characterize it so?
I just do not want to criticize too much, to each their own.
you would be able to borrow against btc stack, which M. Saylor keeps bringing up, but not many on WO are listening. Such loans are typically used by high net worth individuals (HNWI) against VTI, VOO, SPY, and other whole or broad market ETFs.
Thank you. You got me thinking, especially about the loan thingy. I'd be glad to know more about that. Any pointers will be welcome.
Fidelity:
https://www.investopedia.com/fidelity-will-accept-bitcoin-collateral-for-cash-loans-5091879Basic rate is high, 4.5%, but i am sure this will go down.
I would be shocked if Coinbase would not do the same soon after the IPO.
Personally, i would never go above 20% LTV, maybe just 10% (in case of our typical 80% drawdown).
The advantage-NO cap gains tax. In fact, maybe deductible interest (or not, hard to say)
Borrowing Against securities (better rates right now):
https://www.schwab.com/pledged-asset-lineLibor is 0.11%, so the best rate is 1.86%.
Say, you've got, hypothetically, $10 mil of VOO.
You borrow $ 3mil. Your interest (to pay) is 3000000X0.0186=$55800 yearly
However, $10mil in VOO generates $152000 yearly in dividends. End result-you borrowed $3 mil to do whatever, it effectively cost you nothing (well, a decreased divvy).
Yes, you would have to pay the principal at some point, but you can use divvy remainder to do that plus VOO goes up roughly 10% a year, so the loan basically pays for itself (if stock market performs).
That's why rich can have a cake and eat it too, lol
More:
https://www.wellsfargoadvisors.com/why-wells-fargo/products-services/lending/securities-based.htmYes, best rates are for those with lots of assets.
Ret accounts are NOT eligible, though.
Mind you, I have done nothing of the sorts so far, but I am studying the question (after Saylor's remarks).
Ahh leverage, good idea, as long as markets keep going up 10% every year. How many months would it take to completely loose everything once market starts moving against you? Get triple whammy lose premium, your collateral gets reduced, and you get slammed with a tax bill once you're liquidated. Leverage is no panacea, despite what YOLO generation might say.