Should you borrow money to magnify returns in your 401 (k), IRA, or other tax-deferred retirement account?
We examine Basic Capital, which allows investors to leverage their retirement account investments.
We also explore how the wealthy don’t use debt to generate wealth but to manage it.
Show Notes
This 30-Year-Old’s Startup Is Bringing Leverage to 401(k) Savers by Suzanne Woolley—Bloomberg
This startup is offering mortgages for 401(k)s by Liz Hoffman—Semafor
Startup Failure by Elizabeth Pollman—SSRN
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Transcript
Welcome to Money for the Rest of Us. This is a personal finance show on money, how it works, how to invest it, and how to live without worrying about it. I’m your host, David Stein. Today is episode 547. It’s titled, “Debt is for Managing Wealth, Not Creating It.”
Review of 2025
This is the 42nd episode of Money for the Rest of Us this year. As I look back on 2025, we released 31 solo podcasts; just me and you discussing various aspects of finance. I conducted four interviews this year, and this has never really been an interview podcast. And also, as an experiment, we released seven FEG Insight Bridge episodes. These are podcasts put together by Greg Dowling from my former institutional investment advisory firm, FEG Investment Advisors.
When I look back on those 31 episodes, nine of them were on asset classes and vehicles, from private credit, bonds, stable coins, gold, silver. We discussed robo-advisors, sports betting. Three of them were on AI, including “Don’t Take Financial Advice from AI”, “The Jobs Impact of AI”, and “The fight for the real.”
Nine episodes came out of various actions by the Trump administration this year, including discussions on tariffs, trade, sovereign wealth funds, central bank independence, U.S. debt downgrade, strategic Bitcoin reserves, adding private capital to 401k plans. And the favorite type of episodes I do are what I would call big picture episodes. We discussed geography, demographics, infinite money, uncertainty, risk management, bubbles. And today we’re talking about leverage.
Money for the Rest of Us is an audio podcast. It is audio-first. We’ve done videos, and I released over 60 video shorts this year, two full-length YouTube videos. But I prefer audio. Video is not going to replace audio in the sense that audio is unique. You can listen to it while you do other things; while you’re running, exercising, working in the yard, as you drive. I believe there can be added depth with audio. And I’ll continue to do audio, as well as other content.
We released over 40 Insider’s Guide email newsletters in 2025, six essays on Substack, I continue to work on my next book, plus we have a ton of premium content that we release for members of Money for the Rest of Us Plus. We have our member forums there, we have model portfolios, investment strategy reports, I share my portfolio, my portfolio trades. And this week we have a live stream for members of Money for the Rest of Us Plus, where I’ll answer member questions.
When I think about 2026, and I look at the level of output of audio content, video content, written content, much of it free, I come away with a desire to do deeper, more remarkable work. Remarkable in that you’re willing to remark on it and share it with others. And so as part of that, as I look at 2026, we’ll be releasing fewer ad-supported podcast episodes, two per month, so that the content is better, more shareable, it gives me more time to think about the topics, do more work on them, and just make a better audio podcast. And that’s one of my goals for 2026.
Basic Capital
For this episode, it comes from a question in our member forums from a member of Money for the Rest of Us Plus. And the member was asking about basic capital. There’s a new startup, it came out of stealth mode this past May. The first investor in this startup was Bill Ackman of Pershing Capital, a hedge fund manager I used to invest with at my prior firm. And this startup has a unique approach in offering 401k plans and individual retirement accounts. What’s unique about it is participants can allocate a portion of their investments to a leveraged product that magnifies their returns on the upside and the downside.
Abdul Al-Asaad, the co-founder of Basic Capital said, “If you want to buy a house, you take a mortgage. If you want to buy a car, you take a car loan. If you want to go to school, you take a student loan. Why isn’t there a mechanism for me to finance investments in the market?” We’re going to look at why there isn’t, and how borrowing money to invest is different than borrowing money to purchase a home.
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