{"id":5212,"date":"2024-08-10T17:25:33","date_gmt":"2024-08-10T15:25:33","guid":{"rendered":"https:\/\/taxclimate.com\/?p=5212"},"modified":"2024-08-10T18:21:37","modified_gmt":"2024-08-10T16:21:37","slug":"buy-borrow-die-the-secret-to-wealth","status":"publish","type":"post","link":"https:\/\/taxclimate.com\/buy-borrow-die-the-secret-to-wealth\/","title":{"rendered":"“Buy, Borrow, Die”: The Secret for Avoiding Taxes"},"content":{"rendered":"\n
Ever wondered how billionaires like Jeff Bezos and Elon Musk manage to pay almost zero taxes while their wealth skyrockets? <\/p>\n\n\n\n
Spoiler alert<\/strong>: It’s not because they’ve got some magical accountant hiding their money in offshore accounts. It’s because they’re playing a different game altogether \u2013 one that’s perfectly legal and, frankly, brilliant.<\/p>\n\n\n\n Welcome to the world of “Buy, Borrow, Die” \u2013 the wealth-building strategy that’s been the secret sauce of the ultra-rich for decades. And guess what? You don’t need to be a billionaire to start using it.<\/p>\n\n\n\n Let’s break it down in simple terms:<\/p>\n\n\n\n Now, I know what you’re thinking: “Joe, this sounds like some rich person’s game. How does this apply to me?”<\/p>\n\n\n\n Here’s the thing \u2013 understanding this strategy is crucial, even if you’re not flying private jets or buying islands. Why? Because it reveals how the financial system really works, and how you can start positioning yourself to build serious wealth over time.<\/p>\n\n\n\n Think about it. Every time you sell an appreciated asset, you’re potentially triggering a tax event.<\/strong> But what if you could grow your wealth without constantly paying taxes on your gains? That’s the power of “Buy, Borrow, Die.”<\/p>\n\n\n\n Let’s say you bought $10,000 worth of stocks five years ago, and now they’re worth $50,000. If you sell, you’re looking at capital gains tax<\/a> on that $40,000 profit. But if you borrow against those stocks instead, you can access cash without selling \u2013 and without triggering a taxable event.<\/p>\n\n\n\n Now, I’m not saying you should never sell assets or that this strategy is without risks (we’ll get into that later). But understanding this concept can completely change how you think about building and preserving wealth.<\/p>\n\n\n\n Alright, let’s talk about the foundation of this whole strategy: buying assets that go up in value. This isn’t about collecting Pokemon cards or hoarding beanie babies (unless you’ve got a time machine to the 90s). We’re talking about serious, wealth-building assets.<\/p>\n\n\n\n Now, I can already hear some of you saying, “But Joe, I’m not Scrooge McDuck swimming in money. How am I supposed to buy these assets?”<\/p>\n\n\n\n Here’s the secret: You start where you are.<\/strong><\/p>\n\n\n\n Remember, the goal here isn’t to get rich overnight. It’s to consistently acquire assets that have the potential to grow in value over time.<\/p>\n\n\n\n Here’s where the magic happens. When you buy assets that appreciate, your net worth can grow without you having to work harder or earn more income. It’s like having a little army of dollar bills working for you 24\/7.<\/p>\n\n\n\n Let’s say you invest $10,000 in a broad market index fund. If it grows at an average of 7% per year (which is conservative by historical standards), in 10 years, you’d have about $19,672 without adding another penny. That’s nearly doubling your money!<\/p>\n\n\n\n But here’s the kicker: You haven’t sold anything, so you haven’t triggered any taxable events. Your wealth is growing, but Uncle Sam isn’t taking a cut… yet.<\/p>\n\n\n\n This is why the ultra-wealthy are obsessed with acquiring appreciating assets. They know that over time, these assets can grow exponentially, creating massive wealth that can be passed down through generations.<\/p>\n\n\n\n We’ll talk about how to use these appreciating assets to fund your lifestyle without selling them and triggering a tax bomb. But for now, your homework is simple: Start identifying and acquiring assets that have the potential to appreciate. Whether it’s setting up an automatic investment into an index fund or researching potential rental properties in your area, take that first step.<\/p>\n\n\n\n Remember, building wealth isn’t about getting lucky with a hot stock tip or winning the lottery. It’s about making smart, consistent decisions over time. And it all starts with buying assets that appreciate.<\/p>\n\n\n\nWhat is “Buy, Borrow, Die”?<\/h2>\n\n\n\n
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Step 1: Buy Assets That Appreciate<\/h2>\n\n\n\n
What Assets Do the Wealthy Focus On?<\/h3>\n\n\n\n
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How to Start Building Your Asset Portfolio (Even If You’re Not Rolling in Dough)<\/h3>\n\n\n\n
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Why Appreciation is Key<\/h3>\n\n\n\n
Step 2: Borrow Against Your Assets<\/h2>\n\n\n\n