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This Wealth Hack Is Hiding in Plain Sight
Dylan Peters, General Partner
How One Investor Used a Securities-Based Loan to Double Their Exposure Without Selling a Single Share
At Reawaken Capital, we’re always looking for smart ways our investors can accelerate wealth creation without taking on unnecessary risk. This week, one of our investors made a move so elegant we had to share it. They leveraged their stock portfolio using a securities-based loan from JP Morgan Chase Private Bank. By doing so, they unlocked liquidity without selling their holdings then invested that capital directly into our fund. It’s the same strategy used by billionaires like Larry Page & Sergey Brin (Google/Alphabet), Larry Ellison (Oracle), and Mark Zuckerberg (Meta), who have all borrowed against their stock to fund investments, acquisitions, and personal ventures without triggering capital gains or giving up equity. The logic is simple: borrow at a low interest rate, reinvest at a higher return, and let both assets grow. In some cases, depending on how the funds are used, the interest may even be tax-deductible.
The Setup
Our investor had a seven-figure stock portfolio mostly long-term positions in tech and index funds. Rather than sell and trigger capital gains (or lose exposure to future upside), they opened a securities-backed line of credit (SBLOC) through their private bank. Something almost anyone can do. With that liquidity, they made a $500,000 investment into Reawaken Capital’s real estate fund. Now they’re riding the upside of two uncorrelated asset classes at once public equities and income-generating real estate.
The Case Study: How An Investor could add $1.79M+ in Net Worth Without Selling a Single Share
Imagine you’re holding a $1M stock portfolio. You’re bullish long term, so you don’t want to sell but you’re also intrigued by the higher returns that private markets offer. Instead of selling, you leverage your portfolio using a securities-backed loan (SBL):
- Loan-to-Value: 50%
- Loan Amount: $500,000
- Interest Rate (interest-only): 6.5% annually
- Total Interest Paid Over 10 Years: $325,000
- Stock Portfolio Growth (13% CAGR)
- Reawaken Capital Target Return (18% CAGR)
📈 After 10 Years:
- Stock Portfolio Value: ~$3.39M
- Real Estate Investment Value: ~$2.62M
- Total Gross Assets: ~$6.01M
- Less Loan Balance: $500,000
- Less Interest Paid: $325,000
- ✅ Net Worth: $5.18M
Without using leverage, the investor’s stock portfolio alone would have grown to ~$3.39M. By adding the real estate layer, their net worth increased by $1.79M even after accounting for interest without selling a single share.
It’s Not Just JPMorgan
Securities-based lending isn’t limited to private banks. Many brokerages including Charles Schwab, Morgan Stanley, Merrill, and Fidelity offer similar programs. Even Coinbase offers crypto-backed loans for qualified investors. The core idea is simple:
- Use your existing portfolio as collateral
- Borrow at a low interest rate
- Invest into other high-performing assets without triggering capital gains or disrupting long-term strategies
Use Responsibly
As with any leverage, it’s critical to manage risk. Interest rates can change, markets can fluctuate, and margin calls are real. But when used conservatively, securities-based lending can offer a powerful way to grow your wealth without missing out on either side of the market.
Curious if this could work for you?
If you're sitting on equity in stocks, crypto, or a brokerage account and want to diversify into real estate without selling, this is a strategy worth exploring. At Reawaken Capital, we help investors build long-term exposure to real estate while staying flexible, tax-efficient, and opportunity-ready.
Disclaimer: The information provided on our website and in our investment materials is for informational purposes only and should not be considered financial advice. We recommend consulting with a qualified financial advisor before making any investment decisions.