EP. 55 - Security Backed Lending

In this episode of Your Investment Partners, hosts Garrett and Paul explore security-backed lending—how it works, when it makes sense, and the risks involved. They discuss the strategy often referred to as "buy, borrow, die," highlighting how high-net-worth individuals leverage their investment portfolios for liquidity without triggering taxable events. The conversation covers practical use cases, including funding real estate purchases, managing cash flow for businesses, and handling large expenses efficiently. They also outline the key limitations, such as restrictions on IRA accounts and the risks of margin calls. Whether you’re an investor with a concentrated stock position or simply looking for financial flexibility, this episode provides valuable insights into using investment assets strategically.

Key Points From This Episode

• What security-backed lending is and how it works
• Common misconceptions around "buy, borrow, die"
• How wealthy individuals use investment portfolios for liquidity
• When security-backed loans make financial sense
• The risks involved, including market volatility and margin calls
• Why these loans cannot be used with IRA or 401(k) funds
• Scenarios where a security-backed credit line can be beneficial
• How business owners can leverage these loans for operations
• Practical considerations for setting up and managing a credit line

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Useful Links

Garrett on LinkedIn

Paul on LinkedIn

Ascend Investment Partners