My financial advisor uses interactive brokers to manage my money. I’m under contract on a house and have the cash for 30% down but my financial advisor recommends that I borrow from IB at 1.5% for the down payment and put the what would be equity that I have in cash towards my investment accounts.

As the title says..

My financial advisor has been doing well like everyone else in recent months. Just to preface this, he makes his money from me by taking 1% of NET profits annually. Pretty good deal (I’m a small fish but he’s a family friend).

House costs $560k, I have $170k to put down towards the house while setting some aside for furnishings, closing costs, etc. I have $80k in investment accounts at Interactive Brokers. Advisor recommends that I put 100k cash down then put the other $70k in my investment accounts and Interactive Brokers will let me leverage the $150k to borrow $70k at 1.5%.

My interest rate on the house is 2.75%

Tell me if I’m missing something but my risk is if my financial advisor doesn’t achieve better than 1.5% annual gains. Would love to hear your thoughts..

Submitted October 14, 2020 at 09:57PM by Loga5655 https://ift.tt/2SXpDTY