Fallows: Borrowing 10% to 20% against a portfolio carries minimal risk
Tad Fallows · Why Half of Them Have No Mortgage and Still Win · Dec 30, 2025 · at 18:10
Wealth strategist Tad Fallows explains the mechanics and risks of portfolio lines of credit to host Sean Weisbrot.
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“I think borrowing 10 or 20% of your portfolio is perfectly fine because the way these loans work is let's say you have, for simple math, a million dollar portfolio. You're allowed to have debt depending on the brokerage you're working with of let's call it 50, 60% of that. So let's say it's 60%. You can have 600,000. Now, if your portfolio falls by half, the amount you're allowed to borrow will fall from 600,000 to 300,000 because a consistent ratio. So if you borrowed half in the beginning, you're at a high risk of getting this margin call if it falls. If you only borrowed 10% to start with, so you only borrowed a hundred dollars, the market would have to drop from a million all the way down to just 150,000 if you get margin called. And, you know, even the Great Depression, that would be a sort of surprising scenario. So I think the 10 to 20% There's plenty of people who do that, and that's not particularly aggressive. I think if you get over that for any sustained period of time, people in general don't do that because there's just too much risk from the volatility.”
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