Written by Charles Claver, Senior Vice President; Director, Private Wealth Advisor team
Originally published in the LA Business Journal, June 30, 2025
Most successful executives build a circle of trusted advisors, including attorneys, Certified Professional Accountants (CPAs), and financial planners. Even with this powerhouse team, key areas of wealth management often go overlooked, which leads to the potential for higher taxes or missed opportunities. That’s where a professional wealth advisor providing true comprehensive management for both sides of a client’s balance sheet shines.
Once you partner with a wealth advisor, he or she will work alongside your CPA and attorney to oversee your entire financial picture. It starts with a thorough review of goals, resources, and risk tolerance. Gaps are identified, and a tailored financial roadmap is crafted to guide you toward your goals.
Unlike traditional advisors focusing narrowly on investments, a wealth advisor with credit lending experience can help build a comprehensive plan that includes the advantages of debt to help grow wealth.
Benefits of Leveraging Debt
Executives focused on long-term growth may consider leveraging assets and using debt to enhance wealth-building potential. By borrowing at low interest rates, you can invest in opportunities, like real estate, private equity, or businesses, that generate returns higher than the cost of the loan. This helps boost net worth without liquidating assets.
Debt can also provide tax advantages as interest on loans for investment purposes or real estate is often deductible. Leveraging allows you to diversify investments or seize time-sensitive opportunities while maintaining liquidity for other needs, like emergencies. In inflationary times, debt can be paid back with “cheaper” dollars. Of course, a disciplined strategy with diversified assets is key.
Debt Strategies for Consideration
Before leveraging debt, it’s important to assess risk tolerance to ensure the strategy aligns with your goals. Here are some common debt strategies:
Originally published in the LA Business Journal, June 30, 2025
Most successful executives build a circle of trusted advisors, including attorneys, Certified Professional Accountants (CPAs), and financial planners. Even with this powerhouse team, key areas of wealth management often go overlooked, which leads to the potential for higher taxes or missed opportunities. That’s where a professional wealth advisor providing true comprehensive management for both sides of a client’s balance sheet shines.
Once you partner with a wealth advisor, he or she will work alongside your CPA and attorney to oversee your entire financial picture. It starts with a thorough review of goals, resources, and risk tolerance. Gaps are identified, and a tailored financial roadmap is crafted to guide you toward your goals.
Unlike traditional advisors focusing narrowly on investments, a wealth advisor with credit lending experience can help build a comprehensive plan that includes the advantages of debt to help grow wealth.
Benefits of Leveraging Debt
Executives focused on long-term growth may consider leveraging assets and using debt to enhance wealth-building potential. By borrowing at low interest rates, you can invest in opportunities, like real estate, private equity, or businesses, that generate returns higher than the cost of the loan. This helps boost net worth without liquidating assets.
Debt can also provide tax advantages as interest on loans for investment purposes or real estate is often deductible. Leveraging allows you to diversify investments or seize time-sensitive opportunities while maintaining liquidity for other needs, like emergencies. In inflationary times, debt can be paid back with “cheaper” dollars. Of course, a disciplined strategy with diversified assets is key.
Debt Strategies for Consideration
Before leveraging debt, it’s important to assess risk tolerance to ensure the strategy aligns with your goals. Here are some common debt strategies:
- Increase investment opportunities, such as investing in private equity, with low interest loans to diversify portfolios. Hedge against market volatility through diversified asset allocation to protect against downturns and help avoid excessive risk.
- Use securities-based loans, where interest payments may be tax-deductible if used for investment purposes, like buying income-producing assets.
- Leverage real estate through mortgages, where interest may be deductible, freeing up capital.
- Fund life insurance premiums with low-interest loans, as policy growth can be tax-deferred. Plus, loans against the policy may be tax-free up to a point.
- Set up trusts funded by leveraged assets to minimize estate taxes while preserving wealth.
- Use securities-based lending, or borrowing against a portfolio at low interest rates, where the interest may be tax-deductible if used for investments, like private equity.
- Utilize mortgages or HELOCs to free up cash for other investments.
Charles Claver
Senior Vice President; Director, Private Wealth Advisor team
First Bank Wealth Managment
(310) 887-0100
[email protected]
Charles Claver is the Senior Vice President and Director of the Private Wealth Advisor team for First Bank Wealth Management. Possessing 25 years of experience in the financial services field, his expertise includes investment management, trust and retirement planning, individual/commercial insurance, and private banking/lending.
*Consult your tax professional.
Investment and insurance products are offered through OSAIC INSTITUTIONS, INC., Member FINRA/SIPC. Osaic Institutions and First Bank are not affiliated. Osaic Institutions does insurance business in California as Osaic Institutions Insurance Agency, CA Agency License #OH30186. Products and investment advisory services made available through Osaic Institutions are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value. First Bank Wealth Management is a trade name of First Bank, and certain products and services are provided through First Bank, and its affiliates and subsidiaries. Neither Osaic Institutions or First Bank, nor any of their affiliates or financial advisors, provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. Use FINRA’s BrokerCheck to learn about the professional background, certifications, licenses, and any regulatory violations or complaints for any financial advisor.
Investment and insurance products are offered through OSAIC INSTITUTIONS, INC., Member FINRA/SIPC. Osaic Institutions and First Bank are not affiliated. Osaic Institutions does insurance business in California as Osaic Institutions Insurance Agency, CA Agency License #OH30186. Products and investment advisory services made available through Osaic Institutions are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value. First Bank Wealth Management is a trade name of First Bank, and certain products and services are provided through First Bank, and its affiliates and subsidiaries. Neither Osaic Institutions or First Bank, nor any of their affiliates or financial advisors, provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. Use FINRA’s BrokerCheck to learn about the professional background, certifications, licenses, and any regulatory violations or complaints for any financial advisor.
NON-DEPOSIT PRODUCTS: ARE NOT INSURED BY THE FDIC; ARE NOT DEPOSITS; AND MAY LOSE VALUE.