I utilize an SBLOC instead of whole life but the principal remains the same - borrowing against an asset to invest into a passive asset like real estate or high yield dividend stocks to pay down the loan. 💵
@CFH298, they work very similarly. The main difference is that you have to be careful where your underlying portfolio is invested. And depending on where it's invested, you'll have significantly less leverage. With an SBLOC, if you're mostly invested in stocks or mutual funds, you won't have much more access than 50-60%. If the values drop, so does your access. With whole life, because it's guaranteed, they'll loan up to 95% of the total amount of cash in the policy. Less risk = more leverage.
I utilize an SBLOC instead of whole life but the principal remains the same - borrowing against an asset to invest into a passive asset like real estate or high yield dividend stocks to pay down the loan. 💵
@CFH298, they work very similarly. The main difference is that you have to be careful where your underlying portfolio is invested. And depending on where it's invested, you'll have significantly less leverage. With an SBLOC, if you're mostly invested in stocks or mutual funds, you won't have much more access than 50-60%. If the values drop, so does your access. With whole life, because it's guaranteed, they'll loan up to 95% of the total amount of cash in the policy. Less risk = more leverage.