Comment by jstanley
4 months ago
That doesn't make any sense.
You'll be paying a higher rate of interest on your loan than you're receiving on your cash.
You'd be better off taking the $1m directly out of your cash pile.
4 months ago
That doesn't make any sense.
You'll be paying a higher rate of interest on your loan than you're receiving on your cash.
You'd be better off taking the $1m directly out of your cash pile.
That depends heavily on the terms of the loan you can secure and how you choose to invest the cash.
When you borrow $1M against $100M in cash or assets its generally considered a very low risk loan, meaning you'll likely get good terms and comparatively low rates.
Not necessarily. You can get an interest rate lower than your investment return rate.
When interest rates were particularly low years ago, we saw a large number of companies issuing bonds and then using the money to just do stock buybacks.
You need to consider secured line of credit vs unsecured and the interest rate is significantly different as one is backed by collateral and the other is not.