Equity Harvesting

Convert the equity in your house into tax-free retirement income

Here’s a simple question: If you could get a loan for as much money as you want at 4% and you knew that you could invest that money safely and earn 6-8%, how much would you want to borrow? As much as you could, right? The key is the “safely invest” part. Nobody in their right mind would get a home equity loan and use it to invest in Wall Street.

Related: Safe Financial Alternatives to Wall Street

They could lose everything. But once you understand that there are safe, principal-protected options, all of a sudden the idea of investing with borrowed money starts to make a lot of sense. Businesses raise money for investment through debt financing every day. Its how smart businesses operate.

For a lot of people, the single largest component of their net worth is the Home that they live in. A lot of people forego saving for their retirement in order to pay down their mortgages and live debt-free. There is definitely something to be said for the freedom that living debt-free can provide, but but people tend to forget that they can lose their house if they don’t pay their taxes or insurance. An these two expenses go up every year as the home appreciates.

The reality is that paying off your house creates a liability for you. The money that you spent paying down the mortgage is money that could have been invested for your retirement. You would have been just as well off by tucking it under a mattress.

Related: “Does Paying Off Your Mortgage Early Buy Security?”

Video: “Should I pay off my mortgage early?”

Is the equity in your house an investment? No. Investments pay a rate of return. Investments are liquid. If we own a stock or a bond, it will pay us a dividend or interest. If I need my money back, I can usually sell my stock or bond fairly easily and convert the asset back into cash (hopefully with a capital gain!).

Houses do not pay dividends or interest. Home equity does not pay bills or put food on the table. Home values in a neighborhood may increase, but they are increasing for everyone whether you have your house paid off or not. The only way to realize the gain at home values is to sell your house. And if all of the other houses around us have also been increasing, we still need to replace the house with another house to live in.


We offer a low-risk strategy to convert the equity in your house into tax-free income that you can use to live upon in retirement. 


Right now the equity in your house is doing nothing.  If you implement this simple strategy, you can put extra cash into a safe savings vehicle every month!


It is foolish to not put your home equity to work.  Home equity is as good as cash under a mattress.

Take action now and call one of our financial representatives to see how this will work for you.


If you are a new home owner and you don’t have any home equity yet, set an appointment to discuss some strategies for quickly paying down a mortgage.


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