Comment by vineyardmike | Hacker News Reader

Comment by vineyardmike | Hacker News Reader

> In many cases, investments sell in time to directly cover the withdrawal, while other times, the withdrawal is made on margin until the investments’ sale completes.

Very rich people have access to borrow against their investments so they don't have to sell (and trigger taxes).

I would never use FC as it is. BUT if you made a product where you never sell the underlying assets, and instead offer a 0% loan against them when i withdraw (and take a fee somewhere to cover), I would be very interested. Ideally, it might have protections so i can never get a margin call and be in debt during bad market times. Perhaps i can only borrow against the invested amount (or eg 75% of it), and any asset growth is profit, and not borrowed against.

The benefit to this is great. I can watch assets grow, and capture their growth and not deal with taxes, while still benefiting from liquidity. For people will large, regular income (eg. SDEs), you can usually rely on a continued income stream. I am fortunate that i usually invest a large % of my income (sde DINK yay), so being able to only "borrow" against a subset of it for faux-checking seems fine.

I completely understand your desire to avoid sales of your long term investments that may have huge capital gains. To deal with that, you can configure us to sell shares in a tax sensitive way, where we will sell shares with a low tax burden first, so if you have a greater inflow into your account than outflow (which would be the case for a SDE DINK), we will usually just sell recently bought shares that haven't accumulated any capital gains, and all the shares with a high tax burden will never be touched.

> we will usually just sell recently bought shares that haven't accumulated any capital gains

There may be an opportunity here for some sort of pattern recognition to keep cash equal to expected inflow/outflow.

Eg. "80% of the days, they make a $10 lunch purchase, and get paid weekly", so keep $40 a week in cash to avoid cash <-> asset conversions at all.

Get an IBKR credit card starting at 1.6%

I didn't know this existed! This is great. Does anyone know if other brokerages do this too?

(I rather hate the IBKR app and don't like using it)

Almost all the others have higher margin rates. M1 is like 2% or so. Fidelity, Schwab, etc are like 8% or so, and BOA/ML is like 5% or so. (rough numbers, I haven't checked in a while).

But yes, they basically all do this, though on their debit card products, not their Credit Card products, I assume the original commentor meant Debit Card and not credit card.

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