Prof G Markets: Virgin Galactic is Going to Zero, Stock as Collateral + Instacart & the IPO Market

Amazon & Better.com

Amazon's collaboration with Better.com introduces a novel approach for employees to leverage their stock for home loans. The program, called Equity Unlocker, allows Amazon employees to use their stock as collateral, offering a unique benefit by protecting against margin calls. However, it requires pledging stock worth twice the down payment and incurs higher interest rates than standard mortgages 1. Scott Galloway explains that this strategy aligns with a wealth mindset, where individuals prefer borrowing against stock rather than selling it, allowing the stock to grow tax-deferred 2.

Never sell, just borrow against your stock. Let the stock continue to grow.

--- Scott Galloway

This approach is particularly appealing to those confident in Amazon's stock performance, despite the additional mortgage interest costs.

   

Mortgage Market

The mortgage market is experiencing significant shifts due to rising interest rates, impacting refinancing options. Scott Galloway shares his personal experience with five-year mortgages, initially secured at historically low rates, now facing refinancing at much higher rates 3. This change marks a departure from the era of "cheap free money," prompting reconsideration of financial strategies.

It's no longer just cheap free money. It used to be borrow as much as you could.

--- Scott Galloway

As interest rates climb, individuals must adapt to the evolving financial landscape, potentially paying down mortgages instead of refinancing.