• A 2022 study of high-net-worth investors conducted by The Northern Trust Institute found nearly 60% of non-retirees may be interested in acquiring a direct investment in the next 10 years. Further, among those with more than $25 million in investable assets, nearly two out of three are motivated by making an impact and capitalizing on their expertise.

    • Although motives and investment vehicles for “the next big thing” vary greatly from one investor to another, these opportunities have one thing in common: they require significant liquidity.

      In the same survey, we asked respondents where they would source additional liquidity if needed to fund a major purchase. Overwhelmingly, more than 75% indicated they would sell existing assets, with far fewer considering options to borrow. However, under the right circumstances, tapping into leverage can be a valuable strategy to fund liquidity needs.

      For instance, borrowing against your portfolio, rather than liquidating assets, helps keep your investment strategy intact and reduces the risk of incurring capital gains tax or selling out of the market at the wrong time.

      What is the optimal way to fund a major purchase or investment? Though the answer to this question will be as different as the individual investors and opportunities, we find that a systematic approach to vetting your options will yield the best outcomes – for your portfolio and wealth plan — and perhaps most importantly, for successfully realizing your “next big thing.

      To learn more about our framework for funding major purchases, download the full paper.


    Categories: Finance