Posts by Amanda Campbell4

hiddensailor60 said:Believe it or not, I am experiencing the exact same thing on my end! 🙂 If I eventually decide to go the securities-based lending route, I’ll essentially be pledging shares in a fund that was largely built on borrowed capital to begin with! At that point, if things go south, we might find ourselves drowning in debt just like Greece—but hey, that's the game. You can't chase those kinds of profits without taking on some serious risk. 😁
Of course, we always have to operate under the assumption that things won't go exactly according to plan. It’s vital that we stay prepared for the lean years and make sure we aren't overextending ourselves. We simply cannot afford to miscalculate our resources or overestimate what we can handle when the chips are down.

To be perfectly honest, we’ve actually been on the exact same page this entire time. It just seems my posts have been aimed at a crowd that hasn't quite made the leap into the sophisticated world of serious investing yet!

👍

It is incredibly easy for those sitting on a mountain of cash to just throw money around and let it grow. For them, investing is almost a hobby—a way to make their wealth multiply effortlessly. But for those of us who aren't playing with a massive safety net, the game is entirely different. We don't have the luxury of being reckless. We have to be resourceful, finding every possible angle to make things work, and we have to fight for every inch of progress. When you're operating without that cushion, you have to keep your eyes wide open at all times, constantly scanning for potential pitfalls and staying hyper-vigilant against any risks that could wipe you out. It’s a completely different level of intensity. 😁

P.S. I can't help but sit here and marvel at this. It’s truly incredible how much wisdom and insight a young person can possess—I mean, we're talking about a 21-year-old college student here. Honestly, it's almost hard to believe! 😁😁😁 😂

And here is the crux of the issue regarding Lombard loans—this specific line from the post:
It’s easy for people sitting on a mountain of cash to invest and make their money work for them. But us...

Basically, a Lombard loan only makes sense under one very specific scenario. Say you inherit $100,000 after your grandfather passes away. You use that as collateral for an $80,000 loan over, say, five years. Your take-home pay is roughly $4.75 net (assuming your uncle pulled some strings to get you a steady gig at the local municipal office). Now, you take that $80,000 and sink it into a new business venture. If the business tanks, you don't even lose the full $100,000—because the collateral is always meant to cover the principal plus interest. But if the business actually takes off? After five years, you’ve got your $100,000 back, plus interest, plus the profits from the new venture. Then, you just do it all again with a larger Lombard loan—maybe a $200,000 collateral base for a $180,000 loan—balancing the private business alongside the municipal job....

So, I guess a Lombard loan is only viable if two conditions are met:
1. You have some kind of windfall of at least $100,000 (could be land equity where you skip the mortgage and let the bank deal with the sale later, though you've got the cash on hand, haha...), or maybe a dowry or something similar.
2. You have a family member who can secure you a stable job... 🙄 With the average American salary? Zero chance. It’s just not going to happen.

Now, how many people actually meet those criteria?😂?

I certainly don't. How about you?

Where I grew up, there's a saying, "The devil always shits in a big pile." Or, more simply, if you already have $100,000, making another $100,000 is easy. But if you're starting with $10 or $100, you can forget about ever seeing $100,000.

Anyway, that's my two cents on Lombard loans.☕