ADVANCED STRATEGIES • STEP 3 OF 4
Try It: Run Your Numbers
In God we trust, all others must bring data.
— W. Edwards Deming
Use our calculator to determine whether borrowing or selling makes sense for your situation.
Your Learning Journey
Your Learning Journey
This Step Takes: 15 minutes
Enter your real numbers and compare the long-term wealth outcomes of borrowing vs selling.
What You'll Do
Use the interactive calculator, compare lenders, and learn key tips for managing collateral loans safely.
Borrow vs Sell Calculator
Enter your numbers to see which approach builds more wealth over time.
Your Situation
What your Bitcoin/gold/stocks are worth today
What you originally paid for the asset
How much cash do you need?
Your income tax bracket
Assumptions
Typical: 5-15%
Your conviction: will it grow?
How long to compare?
Option 1: SELL
Option 2: BORROW
BETTERBottom Line
By borrowing instead of selling, you'll be $111,624 wealthier in 5 years.
This assumes your asset grows at 20% annually, which exceeds the 10% interest cost. You keep 100% of your asset's upside while paying 10% to borrow.
Assumptions: (1) 50% CGT discount applied (held >12 months), (2) Interest-only loan, (3) No tax deductions for interest (adjust if investment purpose), (4) Compound growth at stated rate
Provider Comparison
Where to borrow against your assets in Australia
| Provider | Asset Type | LTV | Interest Rate | Best For |
|---|---|---|---|---|
| Ledn | BTC, ETH | 25-50% | 9-12% | Conservative crypto loans, regulated |
| Nexo | BTC, ETH, 40+ coins | 20-50% | 8-15% | Instant loans, flexible terms |
| Perth Mint | Physical gold/silver | 50-70% | 6-9% | Vaulted precious metals, AU govt backed |
| ABC Bullion | Physical gold | 50-70% | 7-10% | Sydney-based, allocated storage |
| CommSec Margin | ASX stocks, ETFs | 50-70% | 7-10% | Blue-chip stocks, established investors |
| NAB Equity Lending | ASX 200 stocks | 50-75% | 6-9% | Large portfolios, existing NAB customers |
| Interactive Brokers | US & AU stocks | 50-95% | 5-8% | Low rates, active traders, international |
| CBA / Westpac / ANZ | Property (HELOC) | Up to 80% | 5-7% | Lowest rates, longest terms, highest availability |
How to Choose
- Crypto: Use regulated providers (Ledn, Nexo). Avoid new/unproven platforms.
- Gold: Perth Mint is safest (govt-backed). ABC Bullion for Sydney-based investors.
- Stocks: Use your existing broker if they offer margin. Interactive Brokers has lowest rates.
- Property: Shop around major banks for HELOC. Rates vary significantly.
Tips for Safe Borrowing
How to minimize liquidation risk and maximize benefits
1.Use Conservative LTV Ratios
Borrow at 30-40% LTV instead of 50-70%. This gives you a large cushion if the asset falls. Rule of thumb: Asset would need to drop 40-50% before liquidation risk if you borrow at 30-40% LTV.
2.Monitor Your LTV Weekly
Set calendar reminders to check collateral value. Most liquidations happen because borrowers don't monitor. If approaching threshold (e.g., 65% LTV), add more collateral or pay down the loan.
3.Keep Cash Reserves
Have 3-6 months of interest payments in cash. Also keep 10-20% of collateral value in stablecoins/cash that you can add quickly if needed. Don't borrow 100% of what you're allowed.
4.Use Interest-Only Loans
Interest-only keeps monthly payments low and gives you flexibility. You can pay down principal when you want, but you're not forced to. This is especially useful if the asset appreciates — you can refinance instead of paying down.
5.Understand Liquidation Terms
Read the fine print. Some lenders liquidate immediately at threshold. Others give you 24-48 hours to add collateral. Know your lender's policy and have a plan for rapid response.
6.Don't Borrow to Speculate
This strategy works for assets you'd hold anyway. Don't buy an asset just to borrow against it. The goal is to access liquidity without selling your long-term holdings, not to create leverage for gambling.
Test Your Understanding
You've calculated your own scenario. Now let's make sure you understand the risks, benefits, and when this strategy works.
Take the Final QuizBorrow Strategy - Try It: Complete
- The calculator shows you exactly when borrowing beats selling: when asset growth exceeds (interest rate + CGT saved).
- Key variables: loan amount, interest rate, asset growth rate, your marginal tax rate, and holding period.
- Borrowing makes most sense when you have high-conviction assets with strong appreciation potential and low CGT basis.
Homework
Based on your calculator results, does borrowing or selling make more sense for your specific situation? What assumptions did you use?
Run the calculator with three scenarios: conservative (5% growth), moderate (10% growth), aggressive (20% growth). Which scenario do you believe is most realistic for your asset?
What's Next?
10 minutes