01-19-2018, 08:17 AM
(This post was last modified: 01-19-2018, 08:19 AM by coffeyman76.)
And to extrapolate a little more on the monetization loan it charges a LIBOR based rate that floats along with my floating rate notes. So the spread is always the same. The 10% of my portfolio that is equities will hopefully generate additional cash from dividends that is used to offset the spread between what the notes pay and the loan charges. Depending on where I land with the final portfolio I should be looking at roughly a 1 to 1.5% pre-tax interest cost. Effective cost should be much less. So I'm avoiding a near 30% cap gains hit for a cost of probably sub 1% per year. Even the most conservative portfolio should come out ahead over the long term.
The cherry is at my death it goes to heirs at a stepped up basis so there is a built in inheritance portion as well. What could that portfolio look like in 30-40 years if left to grow, even without dividend re-investment. Hopefully decent!
And the Floating Rate Notes are in Citi, JPM, UPS, USBank, JNJ, & Colgate Palmolive. You aren't allowed to have one name make up more than 25% of the portfolio (another rule!). Anyways, they are about as secure as you can get. That's why banks will loan back 90% on the value of the note.
The cherry is at my death it goes to heirs at a stepped up basis so there is a built in inheritance portion as well. What could that portfolio look like in 30-40 years if left to grow, even without dividend re-investment. Hopefully decent!
And the Floating Rate Notes are in Citi, JPM, UPS, USBank, JNJ, & Colgate Palmolive. You aren't allowed to have one name make up more than 25% of the portfolio (another rule!). Anyways, they are about as secure as you can get. That's why banks will loan back 90% on the value of the note.