Borrowing vs Selling Investments Calculator: a practical guide
What are the costs of selling investments versus borrowing?
Compare funding the same spending need by selling investments or taking a new portfolio-backed loan.
By VolatileShares · Example version 1 · Updated . Hypothetical inputs, not financial recommendations or live company data.
A worked example, in plain English
The idea in 10 seconds: Selling may create a tax bill. Borrowing creates a debt bill. Neither route is free.
Immediate tax and continuing loan costs are not the whole decision.
The tax model is simplified. Loan approval and future after-tax sale values are not calculated.
- Borrow-minus-sell one-year net value
- $3,852.07
- Gross investments to sell
- $23,668.64
- Estimated sale tax
- $3,668.64
Walk me through the full calculation
To spend $20,000.00, selling requires $23,668.64 of investments, including $3,668.64 estimated gain tax and $0.00 fees. Borrowing instead leaves $20,000.00 of principal owed and costs $1,000.00 in one-year cash interest.
At the entered 5% one-year return, the sell branch leaves $185,147.93 and the borrow branch $189,000.00 after debt and outside cash interest, but before future taxes on remaining holdings. The difference is $3,852.07. Interest is not counted twice or treated as deductible. Test a loss and the separate collateral stress tool; this comparison is not a strategy recommendation.
The opening-limit check does not establish loan approval or protection from a future collateral call.
Inputs used for this example
These are the calculator's example defaults, not suggested amounts or rates. Market calculators initially display USD. Change currency in the toolbar without creating a personal profile. Under optional Location & display settings, choose an example country for its currency and available historical CPI. Review any example household size and rent assumption before explicitly applying local assumptions: matching unedited budget/inflation fields change, while edited or restored inputs are kept. Lifestyle budgets are fictional examples, not measured national averages. Local tax, pension and borrowing links are guidance, not personal calculations. Switching currency alone does not change percentages, ages or share counts.
- Investment value now (USD)
- 200,000
- Total amount originally paid (USD)
- 100,000
- Cash needed for spending (USD)
- 20,000
- Total selling fees (USD)
- 0
- Illustrative tax on positive gains (%)
- 31
- Yearly loan interest to try (%)
- 5
- New-loan limit (% of collateral)
- 30
- One-year investment gain or loss to try (%)
- 5
Work backwards from your goal
How much spending cash would this sale amount leave?
Start with an amount you could sell to find the spending cash left after tax and fees.
Choose Work backwards, enter your target and the few essential inputs, then choose Calculate my goal. The answer is checked with the same forward calculation and applied in one step. Example assumptions are disclosed under More options. Expand Calculation details & tools only if you want more detail. Impossible or out-of-range goals show an error instead of invented numbers. Long numbers display commas while editing; calculations and saved snapshots keep the original precision.
Works backwards from a gross sale to cash left after the entered tax and sale fees. The forward comparison also shows borrowing the same spending cash.
Return to the interactive calculator above →How the calculation works
Taxable gain fraction = max(0, 1 - total cost basis / portfolio). Gross sale = (cash need + sale fees) / (1 - gain fraction x tax rate). One-year sell value = (portfolio - gross sale) x (1 + return). One-year borrow net value = portfolio x (1 + return) - cash need - annual cash interest.
What this cannot tell you
One-year, new-loan-only illustration using a uniform cost-basis fraction, not tax-lot selection or tax advice. Taxes apply only to positive realized gains; losses generate no modeled credit. Sale fees do not reduce modeled taxable gains. Cash interest is counted once as an outside cash cost. Remaining investments are valued before future sale taxes in both branches, so these are not after-tax liquidation values. No existing debt, loan fees, variable rates or forced-sale simulation.
Changing an assumption changes the example, not the future. Verify source dates and actual product, tax and lending terms before relying on any result. These tools do not replace appropriately qualified advice.
Sale tax applies to the gain, not automatically to all proceeds
If half a uniform-basis holding is gain and that gain is taxed at 20%, 10% of gross sale proceeds goes to modeled tax. Getting $9,000 cash with no fees needs a $10,000 gross sale. Borrowing replaces that immediate tax with debt and continuing costs.
Illustrative arithmetic, not market evidence or a promise of returns.
Keep a useful starting point
In the interactive calculator, compare different assumptions or explicitly save a named snapshot to My browser notebook. Saving is optional and browser-only, not an account or cloud backup. Revisit it on the same browser profile; restoring never refreshes prices or assumptions.