UBS On-Air: Market Moves Top of the Morning: Raising cash - Sell or borrow?
Mar 26, 2026
Justin Waring, wealth planning and borrowing strategist, and Dan Scansaroli, portfolio construction expert, discuss selling investments versus borrowing to raise cash. They compare true costs, historical case studies, tax impacts, loan types, and risks like margin calls. Practical tradeoffs and when borrowing may outperform selling are explored in concise, actionable terms.
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Compare Loan Interest To Opportunity And Tax Costs
- Do compare the explicit loan interest cost to the implicit costs of selling, like missed returns and realized taxes.
- Justin Waring frames the choice as paying visible interest versus incurring opportunity cost and potential capital gains tax when selling assets.
Two Year 60/40 Case Study Shows Borrowing Beat Selling
- Dan Scansaroli ran a two-year case study with a $10M 60/40 portfolio needing $1M, comparing selling versus borrowing at SOFR+3%.
- Borrowing (6.8% then) beat selling by $397,000 net, with $302,000 from staying invested and $95,000 from tax deferral.
Deferring Gains Can Lower Or Even Eliminate Tax Costs
- Deferring gains via borrowing can both let taxes keep compounding and potentially eliminate them via step-up in basis at death.
- Justin Waring noted interest may be deductible against net investment income, lowering effective borrowing cost materially.