Money Rehab with Nicole Lapin · Monday, September 28, 2026
Nicole Lapin shares Bill Ackman's advice on safely using leverage: maintain a tiny loan-to-value ratio, suggesting perhaps 5 cents of debt per dollar of assets, as opposed to 30-40 cents which can lead to ruin. Ackman's strategy for a margin of safety includes keeping three to six months of living expenses in cash, outside of brokerage accounts. This cash cushion ensures one can avoid margin calls and capitalize on market downturns, a key to how the wealthy build wealth.
“If you want the borrowing against your portfolio magic that the rich do use safely, keep your loan to value ratio tiny. Bill's own line was that 5 cents of debt against a dollar of assets might be fine, but 30 or 40 cents is how you get wiped out.”
“So flip the script and build your own margin of safety before you ever borrow a dime. Keep three to six months of living expenses in cash in a high yield savings account completely out of your brokerage account.”
“The wealthy don't win because they borrow. They win because they never have to sell at the bottom. Build the cushion that guarantees you never have to either.”