Recently I’ve gotten into margin lending as a form of leverage. Why would you want to do that? This great post from Mr. Money Mustache goes into how it works and some reasons why you might want to do it. But mostly, the interest rates are incredibly low (a base rate of around 1.1% which adjusts based on interest rates), so it’s a fast and cheap way to get liquidity to put to other uses. To me, I consider it safe as long as you aren’t using it to spend or invest beyond your means, and are just taking advantage of the low interest rates. For example, to get liquidity from your equity without selling it off and incurring capital gains taxes, or to get liquidity during a market dip to buy at the dip without selling existing equity. Personally, I am using margin lending to earn a much higher interest rate (19.5%) with Anchor Protocol, or the other day I needed to meet a capital call and funds were being too slow to transfer from other sources. Continue reading →