Investment Bankers
since 1986

Increasing My Wealth By Borrowing Tax Free Against Appreciated Stocks

Borrowing money against the value of stocks is a smart move many investors take to increase their own wealth without paying a dime in taxes.

Remember, loans are not taxable. As long as you take your loans through registered lenders, even if you default on them and they keep your stocks that were held as collateral, this is not considered a sale in the eyes of the Internal Revenue Service. But that`s the worst case scenario: there are many good things loans can do for your financial future as well.

Many investors use loans to increase their personal wealth. Once they establish themselves with a stock portfolio, they use this as leverage to take out loans and then purchase additional stocks. Ideally, they are looking for stocks that will yield a profit before the end of the lending period, so they can pay back the loan and walk away more financially secure than when they started.

No one likes the feeling of being in debt, but smart investors realize that debt can be an opportunity for future growth. You may fear taking out a loan and not being able to take pay it back, but this won`t happen as long as you are smart in your investments and in the way you spend your borrowed money. A stock loan should always be used to either increase your wealth or to shore up your current financial situation (which will increase your wealth in the long run). As long as you understand that money is necessary to make more money, you only stand to gain from borrowing against your appreciated stocks.