1. John is a 38 year old accountant who is married and files his taxes jointly.
John is a higher earner and is due a $18,000 tax bill.
His options for paying this are as follows:
- Liquidate his investments and pay taxes on earnings
- Dip into his savings/rainy day fund
- Utilize M1 Borrow
With M1 Borrow, John can borrow against his portfolio at a low 3.50% rate, avoid selling his securities and realizing capital gains. John can also deduct the interest expense from M1 borrow in 2019.
2. Bill and Linda purchased their dream home 5 years ago. Their home is currently due for some renovation which could cost in excess of $25,000. Currently Bill and Linda have a joint brokerage account of ~$150,000.
Bill and Linda are considering the options below:
- Applying for a Home Equity Line of Credit (HELOC) that has a current rate of 6.5% and requires a new appraisal of their home and a hard credit pull.
- Utilizing M1 Borrow
With M1 Borrow, Bill and Linda can borrow against their taxable account, giving them a cheaper option, immediate access to their money and a flexible payment schedule.
3. Sean M. decided that his M1 Invest account was performing very well.
- Liquidate his investments and pay taxes on earnings.
- Leverage his portfolio to purchase more stock.
With M1 Borrow, Sean can invest on margin and amplify his gains.
Use cases are hypothetical and for demonstrative purposes only.