Some quick background info in case that will be important I’m am 30 and Married with one 3 year old child, I work maintenance at a refinery making roughly $57k yearly
I have recently acquired a trust worth 80k dollars. It is already invested in stocks and bonds, and I’m not planning on touching it (unless there is an emergency) however I want to explore all options I can to use this to my advantage. The one thing I keep hearing is that it can be used for leverage, or collateral? However I have no idea what this means though. I guess I could get an 80k dollar loan from the bank? Then what? Can someone explain to me like a five year old what leverage means, and how I could use it
Advice on how to use a trust for leverage and financial gain
byu/AlaskanCactus inpersonalfinance
Posted by AlaskanCactus
4 Comments
>I have recently acquired a trust worth 80k dollars.
As a beneficiary? As a trustee? Or both?
Yes in theory you could take out some loan that is backed by these assets. But why…? This is not something you should be even remotely considering.
I suggest you use this windfall to contibute/max a Roth IRA every year going forward.
There is nothing special about 80k in this trust, it’s just money you should handle responsibly like any other money.
Follow this flowchart https://i.imgur.com/lSoUQr2.png
Handling windfalls: https://reddit.com/r/personalfinance/w/windfall
This is a [windfall](https://www.reddit.com/r/personalfinance/wiki/windfall/). Treat it accordingly.
That usually doesn’t mean loans or leverage or going wild with high-risk finance. It means paying off high-interest debt if you have it, then bolstering your safety with an emergency fund, then making sure it’s well invested and leaving it alone for future needs, whether that’s expenses in a decade or retirement in 30+ years.
Just leave it invested rather than playing around with loan schemes you don’t understand.