I Borrowed $400,000 Against My Stocks

Summary of I Borrowed $400,000 Against My Stocks

by Ramsey Network

8m•August 3, 2026
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Overview of I Borrowed $400,000 Against My Stocks

This segment is a call-in financial coaching conversation about a man who borrowed about $400,000 against his stock portfolio to buy rental property and pay off vehicles. He has a large inheritance, multiple paid-off properties, and significant stock holdings, but is still carrying the loan. The Ramsey Network advice is blunt: sell the stocks, pay off the loan, and get rid of the financial advisor if he keeps pushing debt.

Caller’s Financial Situation

  • Age: 40
  • Inherited assets: About $1.4 million in stocks
  • Current stock value: Around $550,000
  • Loan against stocks: About $408,000
  • Other assets:
    • One primary home, paid off
    • Two rental houses, paid off
    • About $180,000 in Treasury bills
  • Income:
    • Rental income: about $5,000/month
    • Personal pay from LLC: about $4,000/month
  • Use of borrowed funds:
    • Bought a rental house
    • Paid off wife’s car and truck because the original vehicle loan rates were high

Main Advice from Ramsey Network

Pay off the stock-backed loan

The host strongly recommends:

  • Sell the T-bill
  • Sell enough stock to pay off the loan entirely
  • Stop “moving debt around” and become fully debt-free

The core argument: borrowing against stock is still debt, even if it feels “smarter” than a car loan.

Fire the financial advisor

The advisor’s advice to keep borrowing instead of selling stock is described as poor:

  • The host says the advisor works for the caller, not the other way around
  • If the advisor is discouraging debt payoff, that’s a conflict of interest
  • The call’s central message: if your advisor tells you to keep debt, be skeptical

Don’t pretend this is retirement

At age 40, the caller is not financially ready to retire permanently based on this net worth alone.

  • The host encourages him to go get a job
  • Use income to build wealth further
  • Let the remaining investments grow over time instead of trying to live off borrowed money and inherited assets alone

Reinvest simply

For the money that remains invested:

  • Move away from individual stock-picking
  • Prefer basic growth stock mutual funds
  • Let the investments compound over time without constant meddling

Key Takeaways

  • A stock-backed loan is still debt.
  • Borrowing against investments is not the same as building wealth.
  • Advisors should advise, not dictate.
  • Debt freedom matters more than keeping money “visible” on paper.
  • A 40-year-old with this setup still needs earned income.

Notable Insights

  • “You didn’t pay off the debt — you moved it.”
  • “Your financial advisor works for you.”
  • “You do not have enough net worth to retire at 40.”
  • “Sell enough stuff to pay off the loan.”

Recommended Next Steps

  1. Sell the Treasury bill
  2. Sell enough stock to eliminate the stock-backed loan
  3. Review or replace the financial advisor
  4. Keep the rental properties producing income
  5. Return to earning active income
  6. Use simple long-term investing for any remaining capital

Bottom Line

The episode is a strong warning against confusing asset-backed borrowing with actual financial progress. Ramsey’s position is clear: get out of debt completely, simplify the investments, and stop letting an advisor talk you into keeping a loan just to preserve the appearance of wealth.