[renewiltord]

Well, it’s a kind of debt. Think of it like this. You have a car. Your car is worth $10k. You have no money. But if you had $1k today you could have $2k next month. One way you could do this is sell your car. Now you have $10k and you can spend $1k and next month have $11k. But you’d much rather end next month with a car and $1k rather than $11k.

This is a tool that lets you keep the car and get the $1k by mortgaging the car for the $10k. If car prices drop precipitously next month, you won’t get it back. But if they go up, then you have your car (now worth more than $10k) and you pay back the loan and keep the extra $1k you made too.

Perhaps you are familiar with house mortgages, etc. The closest thing a normal person would come to this is probably a HELOC.