How I 10exed my money in SPY in 6 years . 200k --> 2 million
In April 2020 I noticed an opportunity. Mortgage rates were at all time lows and I could refinance my house at a 3 percent interest rate. So I refinanced my 1.5 million dollar house I own in all cash to pull out my money. I pulled out 1 million dollars and my cost of borrowing this money was about 35 k per year in interest payments.
What I also noticed was that the s and p 500 and the stock market had crashed due to the covid-19 pandemic and were trading at a discount. I wanted to build an index fund portfolio as I was over invested in real estate so I put the entire 1 million dollars in spy shares in April 2020. Fast forward to 2026 and my 1 million dollars has turned into about 3 million in spy. I just returned the 1 million principal and closed my loan with the banks keeping 2 million dollars in profits. I paid about 200k in interest payments over 6 years and made 2 million .
I know this may sound like a risk strategy but the following is what I though : -
- Interest rates were already really low meaning there was a high chance real estate prices go up and people borrow more money meaning the risk of a margin call was low and the crash wouldn't affect home prices.
- I had 200k liquid cash saved in another account that I earmarked specifically for interest payments to ensure I dont run out of money in the near future.
- I was comfortable holding the money and making interest payments for a few years even if the market went down and didnt recover for a bit . This was a long term investment and as long as the market recovered in a few years time I would have made money .