They bought a $1.5M home and paid nothing out of pocket

The outcome in three numbers

Specific numbers in this case study have been adjusted to protect client privacy. For illustrative purposes only.

75% of their net worth was in one stock. And they wanted to buy a home.

A pharma executive came to us with a $10 million net worth, $3 million of which was concentrated in a single company's stock accumulated over years of long-term incentive grants. The remaining $7 million was diversified across retirement accounts and other assets.

They were financially independent. Even if that concentrated position went to zero, the $7 million left would carry them comfortably through retirement. They had found a property near their kids, a $1.5 million vacation home, and wanted to move quickly.

The obvious answer was to sell enough stock to fund the purchase, though it was also the most expensive answer by a wide margin.

Selling the stock would have cost far more than the home

To net $1.5 million after taxes, the client would have needed to sell closer to $2.1 million in stock, handing roughly $600,000 to federal and state capital gains taxes, Medicare surcharges included. That money would be gone permanently, along with its future growth potential.

Borrow against the stock. Let the dividends carry the loan.

Instead of selling, we used the concentrated position as collateral to borrow $1.5 million directly against the portfolio, a strategy called asset-backed lending. No underwriting delays, no closing costs, no taxable event. The loan was in place within two weeks, and the client made a competitive cash offer on the property.

• 1 Pledged the stock as collateral. The full $3 million position remained invested and intact. We borrowed $1.5 million against it at a rate of approximately 4.25%, roughly a quarter point over the Fed funds rate at the time, with no qualification process or underwriting delays.
• 2 Covered the interest with dividends. The stock's dividend yield generated enough income to cover the annual interest on the loan in full, meaning the client had no cash coming out of their pocket, month after month, to carry the debt.
• 3 Let the portfolio keep compounding. The $3 million in stock continued growing with the market. At an expected 8 to 10% annual return, the position generates far more in growth each year than the ~4.25% interest cost of the loan, a spread the client captures indefinitely.
• 4 Preserved every future option. Because no shares were sold, the client retained the ability to sell gradually over time, gift appreciated shares to charity, or pass the position to heirs with a stepped-up cost basis, all of which would have been forfeited the moment they liquidated.

A $1.5M home. Zero shares sold. Zero tax triggered.

The client closed on the property as a competitive cash buyer within two weeks of the decision. The concentrated position remained fully intact, continuing to grow and generate dividends. The capital gains tax bill, which would have been approximately $600,000, was avoided entirely.

Most people think their only option is to sell.

When you have spent a career accumulating a concentrated stock position, the instinct is to treat it as locked-up money, something you have to liquidate to access. The tax drag makes every sale painful, so the position just sits there, undiversified and untouched.

Asset-backed lending changes that equation. The stock becomes a tool you can leverage for liquidity, for real estate, for opportunity, without triggering a taxable event, without losing your position, and without giving up the long-term growth you have spent years building.

This is not an obscure strategy. It is simply one that most advisors are not equipped to model, explain, or execute.