Latest / The Financial Freedom Podcast with Fexingo: Quitting Your Job, Living Off Investments, Independence
How Early Retirees Can Use a Margin Loan Instead of Selling
Lucas and Luna dive into the mechanics of using a portfolio margin loan as a cash management tool for early retirees — avoiding capital gains tax and sequence risk without selling assets. They walk through the real costs: a typical example of borrowing $40,000 against a $1 million portfolio at a 2.5% interest rate from Interactive Brokers versus selling shares and triggering a 15% capital gains tax. They discuss the risks — margin calls during downturns, interest rate variability, and the importance of staying under a 10% loan-to-value ratio. They also compare margin loans to home equity…
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