Margin Management

Margin Management

Purpose

Monitor and manage margin-living strategy by tracking margin balances, interest costs, dividend coverage ratios, and portfolio-to-margin safety thresholds. Provides data-driven scaling recommendations based on strategy milestones.

Step 0: Refresh (sync-first, mandatory)

This skill reads margin facts from the local DB, and the DB is refreshed FIRST so it can never be stale. Follow the shared Sync-First + DB-Read pattern. Minimum for this skill (positions + balances into the balances table):

uv run python -m src.integrations.snaptrade.sync_db   # or: refresh_all

Completion criterion: the balances table carries this run's synced_at before any margin number is read.

When to Use

Use this skill when:

• Syncing live margin balances from SnapTrade
• Updating margin balance or interest rate
• Calculating coverage ratio (dividends ÷ interest)
• User mentions: "margin dashboard", "margin balance", "coverage ratio", "margin strategy"
• Assessing margin scaling decisions
• Checking safety thresholds

Personal Strategy Inputs

Static private assumptions come from .env (see .env.example). Current portfolio facts come from the local DB balances snapshot (refreshed sync-first in Step 0), then src/analysis/margin_metrics.py derives ratios/costs at runtime. Do not hardcode personal numbers in this skill. Fallbacks: --source snaptrade reads the API live, --source csv reads the legacy Fidelity balances CSV.

Required .env values

• FG_STRATEGY_START_DATE
• FG_MARGIN_INTEREST_RATE, FG_MARGIN_INTEREST_RATE_DECIMAL
• FG_MARGIN_JUMP_ALERT_THRESHOLD
• FG_CURRENT_MONTHLY_DRAW, FG_MONTH6_DRAW_TARGET, FG_MONTH12_DRAW_TARGET, FG_MONTH18_DRAW_TARGET
• FG_BUSINESS_INCOME_MONTHLY, FG_BUSINESS_INJECTION_RED, FG_BUSINESS_INJECTION_CRITICAL
• Live facts are not .env values: portfolio value, margin balance, interest cost, dividend income, coverage ratio, and portfolio-to-margin ratio must be read/calculated at runtime.

Core Workflow

1. Read Margin Balances (local DB snapshot)

After Step 0's refresh, run uv run python -m src.analysis.margin_metrics --pretty. It loads .env, reads the latest balances row from family_office.db (the db source is the default), and emits current JSON metrics. Fallbacks if needed: --source snaptrade (live API) or --source csv (latest Balances_for_Account_*.csv).

Source: the balances table, written by the Step 0 sync from the enabled+routed SnapTrade account in config/snaptrade-accounts.yaml (enabled: true, role set). Requires SNAPTRADE_* keys in .env for the refresh.

Key JSON fields the tool emits:

• portfolio_value → net account equity (account_equity) → Portfolio Value
• margin_balance → derived margin debt (gross market value minus net equity) → Margin Balance
• monthly_interest_cost → Balance × Rate ÷ 12 (the primary interest figure)
• margin_interest_accrued_this_month → null on the DB and SnapTrade paths (the broker does not expose accrued interest; it is only present via --source csv)

Calculations:

• Margin Balance: Derived margin debt = {live.margin_balance} (tracks Fidelity "Net debit" within ~0.1%)
• Interest Rate: Default ${FG_MARGIN_INTEREST_RATE} (Fidelity $1k-$24.9k tier) unless specified
• Monthly Interest Cost: Balance × Rate ÷ 12 = {live.margin_balance} × ${FG_MARGIN_INTEREST_RATE_DECIMAL} ÷ 12 = {derived.monthly_interest_cost}

2. Safety Check: Margin Jump Alert

Rule: If new margin balance > previous balance + ${FG_MARGIN_JUMP_ALERT_THRESHOLD}, STOP

Reason: Large draws should be intentional per margin-living strategy

Example:

Previous: {live.margin_balance}
Current: {example.margin_current} (+{derived.margin_increase}) → 🚨 ALERT - Confirm intentional draw

Action:

• Alert user immediately
• Show diff: "Margin increased by {derived.margin_increase} - Confirm this was intentional"
• Wait for user confirmation before proceeding

3. Report the current snapshot

There is nowhere to write an entry: balances is a current-state table keyed on account_id, so each sync overwrites the prior row and no ledger accumulates. Report the snapshot in the response instead.

• Date: current date (use date +"%Y-%m-%d")
• Margin Balance: margin_debt from the balances row
• Interest Rate: ${FG_MARGIN_INTEREST_RATE}
• Monthly Interest Cost: Balance × Rate ÷ 12
• Elapsed: months since ${FG_STRATEGY_START_DATE}, which selects the scaling tier below

4. Derived metrics

Monthly Interest Cost

margin_debt × ${FG_MARGIN_INTEREST_RATE} ÷ 12

Annual Interest Cost

monthly_interest_cost × 12

Dividend Income

Sum type = 'DIVIDEND' rows in transactions for the trailing month. See the dividend-tracking skill; do not recompute its aggregation differently here.

Coverage Ratio

monthly_dividend_income ÷ monthly_interest_cost

Guard the zero case: when margin_debt is 0 there is no interest to cover, so report coverage as not-applicable rather than dividing.

5. Calculate Strategy Metrics

Portfolio-to-Margin Ratio

= Total account value ÷ Margin Balance
Example: {live.portfolio_value} ÷ {live.margin_balance} = {derived.portfolio_margin_ratio} 🟢🟢🟢

Safety Thresholds:

• 🟢 Green: Ratio > 4.0:1 (target - healthy margin usage)
• 🟡 Yellow: Ratio 3.5-4.0:1 (warning - pause scaling)
• 🔴 Red: Ratio < 3.0:1 (alert - stop draws, inject business income)
• ⚫ Critical: Ratio < 2.5:1 (emergency - inject ${FG_BUSINESS_INJECTION_CRITICAL}, consider selling)

Current Draw vs Fixed Expenses

Current monthly draw: ${FG_CURRENT_MONTHLY_DRAW} (fixed expenses only)
Target: Start with ${FG_CURRENT_MONTHLY_DRAW}, scale to ${FG_MONTH6_DRAW_TARGET}, ${FG_MONTH12_DRAW_TARGET}, ${FG_MONTH18_DRAW_TARGET} based on data

6. Scaling Alerts (Time-Based)

Strategy Start Date: ${FG_STRATEGY_START_DATE}

Calculate months elapsed:

import os
from datetime import datetime

start = datetime.fromisoformat(os.getenv("FG_STRATEGY_START_DATE"))
current = datetime.now()
months_elapsed = (current - start).days // 30

Month 6 Alert

📊 MONTH 6 MILESTONE CHECK:
✅ Dividends: {live.monthly_dividend_income}/month (need ${FG_MONTH6_DIVIDEND_MINIMUM})
✅ Portfolio-to-Margin Ratio: {derived.portfolio_margin_ratio} (need 4:1+)
✅ Dividend Growth: On track

🎯 RECOMMENDATION: Scale margin draw to ${FG_MONTH6_DRAW_TARGET}/month (add mortgage)
- Current: ${FG_CURRENT_MONTHLY_DRAW} (fixed expenses only)
- New: ${FG_MONTH6_DRAW_TARGET} (fixed + mortgage)
- Safety margin: Excellent

Month 12 Alert

📊 MONTH 12 BREAK-EVEN CHECK:
Expected Dividends: ${FG_MONTH12_DIVIDEND_TARGET}/month (goal: break-even with margin interest)
✅ IF achieved: Consider scaling to ${FG_MONTH12_DRAW_TARGET}/month (add some variable expenses)
⚠️ IF not: Hold at ${FG_MONTH6_DRAW_TARGET}, assess strategy

Month 18 Alert

📊 MONTH 18 MATURE STRATEGY CHECK:
Expected Dividends: ${FG_MONTH18_DIVIDEND_TARGET}/month
Expected Margin: Declining (dividends paying down debt)
✅ IF achieved: Consider scaling to ${FG_MONTH18_DRAW_TARGET}/month (most variable expenses)
⚠️ IF not: Hold current level, reassess timeline

7. Alert Thresholds

Generate alerts based on conditions:

Green (Healthy)

✅ Ratio > 4:1 AND dividends covering interest
Status: On track, continue per strategy

Yellow (Caution)

⚠️ Ratio 3.5-4:1 OR dividend coverage declining
Action: Pause scaling, monitor weekly

Red (Alert)

🚨 Ratio < 3:1 OR dividend cuts detected
Action: STOP draws, inject ${FG_BUSINESS_INJECTION_RED} business income

Critical (Emergency)

⛔ Ratio < 2.5:1 OR margin call risk
Action: STOP draws, inject ${FG_BUSINESS_INJECTION_CRITICAL} business income, consider selling hedge (SQQQ)

Critical Rules

This skill is read-only

family_office.db is written by the sync CLIs alone. Never hand-edit rows to make a metric look right; fix the sync that wrote the bad row instead.

Margin Strategy Philosophy

Core Principle: Confidence-based scaling, not time-based mandates

Decision Framework:

1. Data-driven: Decisions backed by actual dividend income, not projections
2. Safety-first: Never scale if ratio drops below 3.5:1
3. Business income as insurance: Available ${FG_BUSINESS_INCOME_MONTHLY}/month, not primary strategy
4. Monte Carlo backstop: ${FG_BUSINESS_BACKSTOP_PROBABILITY} of scenarios used business income at some point

Business Income Backstop

Available: ${FG_BUSINESS_INCOME_MONTHLY}/month from business operations

Usage Scenarios:

1. ⛔ Margin call (ratio < 3:1): MUST USE business income immediately
2. ⚠️ Market correction (20-30% drop): OPTIONAL - assess need
3. 🎯 Acceleration (reach FI faster): OPTIONAL - strategic choice

Current Philosophy: Insurance policy only, not active strategy component

Example Calculations

Scenario 1: Month 1 (Current State)

Portfolio Value: {live.portfolio_value}
Margin Balance: {live.margin_balance}
Ratio: {derived.portfolio_margin_ratio} 🟢🟢🟢

Monthly Interest: {derived.monthly_interest_cost}
Dividend Income: {live.monthly_dividend_income}
Coverage: {derived.coverage_ratio} 🟢

Status: Excellent - building foundation

Scenario 2: Month 6 (Projected)

Portfolio Value: {projection.month6_portfolio_value} (projected with W2 contributions)
Margin Balance: {projection.month6_margin_balance} (scaled to ${FG_MONTH6_DRAW_TARGET}/month draw)
Ratio: {projection.month6_portfolio_margin_ratio} 🟢

Monthly Interest: {projection.month6_monthly_interest_cost}
Dividend Income: ${FG_CURRENT_MONTHLY_DRAW} (projected)
Coverage: {projection.month6_coverage_ratio} 🟢

Status: Healthy - on track for break-even

Scenario 3: Month 15 (Break-Even)

Portfolio Value: {projection.month15_portfolio_value}
Margin Balance: {projection.month15_margin_balance} (scaled to ${FG_MONTH12_DRAW_TARGET}/month draw)
Ratio: {projection.month15_portfolio_margin_ratio} 🟢

Monthly Interest: {projection.month15_monthly_interest_cost}
Dividend Income: {projection.month15_monthly_dividend_income}
Coverage: {projection.month15_coverage_ratio} 🟢

Status: Break-even achieved, dividends > interest

Data Source

Margin balance, buying power, and maintenance requirement come from the balances table in family_office.db, refreshed sync-first (Step 0). The Margin Dashboard sheet was retired 2026-07-31.

The balances columns are account_id, currency, settled_cash, buying_power, account_equity, gross_market_value, margin_debt, and synced_at. There is no maintenance_excess column; maintenance headroom is derived, not stored.

sqlite3 family_office.db \
  "SELECT synced_at, account_id, settled_cash, buying_power, account_equity, margin_debt
   FROM balances ORDER BY synced_at DESC;"

balances is keyed on account_id, so it holds one current row per account and no history. Read synced_at to confirm the row belongs to this run's refresh before deriving anything from it.

Cash-management accounts sync through SimpleFIN into bank_transactions, deliberately outside the brokerage balances table, so they never distort the portfolio-to-margin ratio.

Reference Files

For complete strategy details, see:

• Margin Strategy: strategies/active/margin-living-master-strategy.md
• Portfolio Strategy: strategies/active/portfolio-master-strategy.md
• User Profile: user-profile.yaml
• Account routing: config/snaptrade-accounts.yaml

Pre-Flight Checklist

Before reporting margin metrics:

• SnapTrade account is enabled+routed in config/snaptrade-accounts.yaml and SNAPTRADE_* keys are in .env
• DATABASE_URL is set in .env
• The balances row carries this run's synced_at
• Current date retrieved via date command

Educational purposes only. Not investment advice. Margin borrowing carries risk of loss exceeding your deposit, and a margin call can force liquidation at unfavourable prices. Consult licensed financial and tax professionals before acting.

Example Scenario

Trigger: User asks to sync/refresh margin from SnapTrade

Agent workflow:

1. ✅ Pull live SnapTrade balances - Portfolio: {live.portfolio_value}, Margin: {live.margin_balance}
2. ✅ Safety check - Previous: $0, Current: {live.margin_balance} (+{live.margin_balance} < ${FG_MARGIN_JUMP_ALERT_THRESHOLD} threshold) - PASS
3. ✅ Calculate metrics:
   • Monthly interest: {derived.monthly_interest_cost}
   • Portfolio-to-margin ratio: {derived.portfolio_margin_ratio}
   • Coverage ratio: {derived.coverage_ratio} (dividends ÷ interest)
4. ✅ Add entry to Margin Dashboard:
   • Date: {today}
   • Balance: {live.margin_balance}
   • Rate: ${FG_MARGIN_INTEREST_RATE}
   • Cost: {derived.monthly_interest_cost}
   • Notes: "Month 1 - Building foundation, on track"
5. ✅ Update summary section:
   • Current balance: {live.margin_balance}
   • Monthly cost: {derived.monthly_interest_cost}
   • Annual cost: {derived.annual_interest_cost}
   • Dividend income: {live.monthly_dividend_income}
   • Coverage: {derived.coverage_ratio}
6. ✅ Generate status: "🟢 Excellent health - Ratio {derived.portfolio_margin_ratio}, Coverage {derived.coverage_ratio}"
7. ✅ LOG: "Updated Margin Dashboard - Month 1, {live.margin_balance} balance, {derived.portfolio_margin_ratio} ratio"

Skill Type: Domain (workflow guidance) Enforcement: BLOCK (financial risk critical) Priority: Critical Line Count: < 400 (following 500-line rule) ✅