Taking Out Loans Against Stocks Worked for Billionaires, but 'Ramsey Show' Caller Says It's Left Him With a Huge Monthly Payment
A caller named Tyler from Dallas told Dave Ramsey on his show that he has a $400,000 securities-backed line of credit (SBLOC) costing $1,600 per month in interest. Tyler inherited $1.4 million in stock, sold some to buy a home and two rental properties, and still holds $550,000 in stock and $180,000 in Treasury bills. He used the SBLOC to buy another rental and pay off car loans. Ramsey advised selling Treasury bills and enough stock to eliminate the debt entirely, calling Tyler's financial advisor a 'moron' for suggesting the investments should be kept. Ramsey emphasized that financial professionals work for the client, not the other way around, and that moving debt around does not eliminate it. The article highlights the risks of the 'buy, borrow, die' strategy popular among billionaires when applied by less wealthy individuals.
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