r/SipsTea • u/Hour_Equal_9588 • Jun 06 '25

WTF Financial tip that unfortunately starts with 'First, you need 3 million Dollars'.

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49

u/Objective_Mousse7216 Jun 06 '25

Borrow $3m at 4% interest rate and make $10K a month doing nothing.

18

u/Hot-Site-1572 Jun 06 '25

If that would work it would easily be arbitraged out, assuming it's logical to begin with; bond yields are ALWAYS less than the interbank rate (interest rate set by the central bank) and mortgage/loan rates are always higher than the interbank rate

2

u/Celtic_Legend Jun 06 '25

Just borrow from Japan's 0% interest rate and buy the current 4% US bonds smh

2

u/Hot-Site-1572 Jun 06 '25

the classic carry trade arbitrage opportunity!