Real estate already figured this out decades ago. You don't sell your house when you need money. You borrow against it. HELOC, remortgage, equity release. The asset stays put, you get liquidity and you pay interest instead of selling and potentially triggering capital gains tax.

The ultra-wealthy do the same thing with stocks, bonds and entire portfolios. It's known as 'Buy, Borrow, Die' and it's how generational wealth actually compounds.

Buy appreciating assets. Borrow against them when you need cash. Pay interest, which is usually cheaper than selling and paying tax. Never sell. When you die, the estate settles the debt and your heirs inherit the remaining value based on the rules in that jurisdiction.

It works brilliantly if you have a multi-million pound private banking relationship. Not due to the idea being complicated but just because the infrastructure does not exist at a level that makes smaller lending economically viable.

How Buy, Borrow, Die actually works

The mechanics are simple. You buy an asset you expect to appreciate over time, like property, stocks, bonds. Rather than selling that asset when you need cash and paying capital gains tax on the gain, you borrow against it.

If the asset continues appreciating, it can make sense to retain ownership, release liquidity through borrowing and keep exposure to the upside.

When you pass away, the asset goes to your estate. It is valued at the time of your death. The estate clears the debt. In many jurisdictions, the historic capital gain can be rebased or removed from lifetime capital gains exposure.

Here are the numbers.

You have a £1 million portfolio. Over multiple decades it rises to £10 million. If you sell, you pay capital gains tax on the £9 million gain - anywhere from 20-40% depending on jurisdiction and circumstances. That's £1.8–£3.6 million gone.

If you borrow against it instead, you take out £5 million at 5% interest. You pay £250,000 a year in interest. The asset keeps appreciating. When you die, the estate is valued at £10 million. The £5 million debt is cleared. Depending on the jurisdiction and estate structure, your heirs may inherit the remaining value with the historic capital gain rebased or removed from lifetime CGT exposure.

That's how it works for people with £10 million portfolios and private banking relationships.

For someone with £200,000 in a Vanguard ISA or a general investment account, it usually does not work in any practical sense.

Why it doesn't work for everyone else

First, minimums. Securities-backed lending in the UK generally requires £1–3 million in investable assets minimum. That's private banking territory. Barclays Private Bank is generally positioned around £3–5 million. HSBC Private Banking wants £2 million. Coutts around £1 million or £3 million net worth.

Second, custody monopoly. You can only borrow from the bank that custodies your securities. Want better rates from a different lender? You have to transfer your entire portfolio to their custody first. Relationship friction. Transfer fees. Weeks of paperwork.

Third, asset restrictions. Banks only lend against blue-chip stocks, government bonds and liquid funds. Fractional holdings? No. Alternative investments? No. Tokenized assets? Absolutely not.

So for the average person with £200,000–£500,000 spread across an ISA, a general investment account, a trading app and maybe some tokenized real estate, there is no way to borrow against it as a combined portfolio.

That's the barrier.

What tokenization changes

Tokenization gets marketed as 'democratizing access to assets' - fractional ownership, lower minimums, global liquidity. That's true. But incomplete.

Tokenization lowers barriers to owning appreciating assets. You can own fractional real estate for £5,000 instead of £50,000. Tokenized equities for £10,000 instead of £100,000. That creates a market where more people have £500,000 diversified portfolios instead of just the ultra-wealthy with £10 million.

But that's only half the unlock. The other half is infrastructure that lowers barriers to lending against those assets.

The real unlock is not just owning the same assets as wealthy people. It is accessing the same financial tools around those assets. The key is making the asset pledgeable. A lender needs to know who owns it, where it sits, what it is worth, whether anyone else has a claim over it and whether it can be locked if the borrower defaults. Property has this already through the Land Registry and registered charges. Tokenized assets need the same idea: a collateral layer that lets regulated lenders verify, monitor and take security over eligible assets wherever they are held.

The Better Mortgage example

Better Mortgage in the US recently launched a product that captures the idea perfectly. They took a HELOC, already credit secured against your house, and connected it to a debit card. You spend your home equity directly. Only pay interest on what you actually use. The rate is mortgage-style, not credit card.

Vishal Garg, Better's founder, put it well: homeowners are sitting on $21.4 trillion in equity but reaching for credit cards at 22% interest because the tools to access their equity haven't evolved.

That is the important product insight. The breakthrough is not the loan itself. HELOCs already exist. The breakthrough is the access layer. Better made secured liquidity feel usable in day-to-day life.

That's the same problem in every other asset class. Everyday people already have wealth tied up in stocks and funds and increasingly will have wealth tied up in tokenized property, but the only way to access liquidity is to sell or take on unsecured debt at credit card rates. The infrastructure to spend against what you own does not really exist beyond your house.

Take school fees

You need £250,000 over ten years for your kids' education. You either need cash to pay that, which not everybody has, or you sell your assets.

If you sell, you pay capital gains tax every time. 20–40% depending on your situation and then you face a choice: sell everything now and lock in today's price, or sell £25,000 each year and hope the value stays stable.

Either way, after ten years you no longer have the asset. You've just paid the school fees.

If you borrow £250,000 instead on an interest-only or revolving basis, the monthly cashflow requirement can be materially lower than paying the fees outright from income or selling assets each year.

The borrower is not avoiding the cost. They are changing the timing, source and structure of the liquidity.

You still own the asset. If it continues appreciating, you keep the upside. That's how you sustain wealth rather than eroding it to pay bills. Of course, this only works if the lending is structured properly. Borrow too much, against the wrong asset, at the wrong rate and you have not created freedom. You have created leverage. The point is not reckless borrowing. It is properly underwritten secured credit against assets that can be valued, monitored and controlled.

Freedom, not just access

For all the hype around blockchain, DLT and tokenization, what it actually allows is choice over the assets you own.

Today's products are gated, shielded and only available to ultra-high net worth clients. You can manage your assets, but only under the terms of whoever offers the product.

What this unlocks is freedom. Freedom to hold assets with whoever you please. Freedom to borrow against them from institutions you recognise. Freedom to access terms that suit your circumstances rather than fitting your life around the products available.

That's when ‘Buy, Borrow, Die’ stops being a strategy reserved for private banking clients and becomes a tool for wealth preservation available to more people with diversified portfolios.

The key is democratizing access to the financial infrastructure around those assets. That's the real tokenization thesis. Not just fractional ownership. Not just new assets. Financeable assets.