The Buy Borrow Die Strategy | How The Ultra Rich Stay Rich and Pay $0 in Taxes
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- Опубликовано: 15 июл 2024
- Congress has been having heated debates about taxing the richest people in America. There are currently 700 billionaires who hold over $5 trillion in total assets. Congress is trying to pass the budget reconciliation package that includes social spending bills and other infrastructure proposals. Congress has proposed to tax billionaires' untaxed capital gains because they never sell their assets. Billionaires and millionaires have been using the Buy Borrow Die Strategy so they pay little to no federal income taxes or capital gains taxes. You'll find out in this video how the Buy Borrow Die strategy could work towards your advantage if you are looking to achieve Fat FIRE.
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⏰ Table of Contents ⏰
0:00 Tax The Rich?
1:39 Buy Borrow Die
4:32 Buy
6:31 Borrow
9:30 Die
#FIREPsyChat #FinancialIndependence #BuyBorrowDie
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Disclaimer: I am not a financial advisor. I am solely sharing my personal experience and opinions. All Strategies, tips, suggestions, and recommendations shared are solely for entertainment and educational purposes only. There are financial risks associated with investing. You must conduct your own research and due diligence, or seek the advice of a licensed advisor if necessary.
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You don’t have that many followers. But I want to let you know you are going to blow up on RUclips soon these are amazing videos. Very informative
You are too kind! I appreciate it!
@@FIREPsyChat Agree with the above. You're great man, you clearly understand how to get rich like the rich do, which is much much faster then how the "poor" get "rich".
Hey thanks!
Hi Psy! This is an awesome informational Channel. Gonna binge on your perspective for a bit. Enjoying this so far! Thank you for sharing your knowledge!! 🌟👍🏼
Thanks for tuning in! I’d love to hear your feedbacks both positive and negative!
Awesome video! It was very informative and helpful.
Thanks!
What do you think of the "Buy Borrow Die" investment strategy? By the way, are you looking to join the FIRE journey? You can schedule a free 20-minute 1-on-1 financial coaching session by filling out the Introductory Forum ➡️ www.firepsychat.com/introductory
Even if you borrow, you anyway have to sell it at one point to pay your principle+Interest. In that case, you will anyhow incur a capital gain tax right? So what's the point of borrowing?
There’s not a one size fits all answer to this strategy. What is the point? That’s up to every individual to decide
thank you for the great introduction. I just have one question: after getting the SBLOC, how do I repay it? If I had to sell stock to pay it back, I would lose the tax benefit. Or do I only need to pay the SBLOC interest and can hold the SBLOC until I die?
Great video!
Thank you! You’re great too
Great video. Thinking of using BBD for early retirement using stocks. My taxable account is basically etf's SCHD/DGRO. My yield on cost should increase with the portfolio value long term. It seems crazy getting to a point where portfolio growth outpaces margin spending.
Great video and tactic to leverage assets. I understand the principle. But what would I do to pay the interest payments? Like a credit card, you have minimum payments to make back. I understand taking a stock portfolio, borrowing 10-20% against it to put a deposit on an investment property to rent out. But how would you borrow against to live on? If I have a $1 million dollar stock portfolio and I borrow 10% against it $100k surely I would have to pay that back over the months and years. I have heard about refinancing. If the appreciation in the asset is greater than the interest you clear the debt and increase the amount borrowed. But I can't see an institution waiting a year or two to for payments on the interest. I'd have to pay something back each month.
plus inflations at 8% that makes debt cheaper
@Psy. If you have to sell your securities at one point to pay back your SBLOC, you anyway incur capital gains. So what's the point of taking sbloc? Or the SBLOCs are only repaid by your heirs after you die. In that case, it makes sense but do brokers offer SBLOC for your entire life?
The idea is to not sell… ever
@@FIREPsyChat I am not sure you can just net out the interest cost from appreciation in the 2nd example. I believe you have to also count the cmpounding of the loan amount. Anyway, in the current environment it would be impossible to find a 2% SBLOC
I dont' get how it works if you have 0 income but live off of a PLOC. If you're living off 100% PLOC and the interest rate is 2%, then how do you have the extra cash flow to pay off the interest if you have 0 income from a job or business? Does that mean you have to withdraw some of your security investments to pay off that 2% interest which triggers 20% capital gains tax?
The short answer is it depends. The long answer is it depends on your net worth and how much you already have invested. This is just informational so you’ll have to talk to a bank or a financial advisor that provides the line of credit
From the financial institution's point of view, why would it keep giving out sbloc loans every year if the borrower is never going to pay them back until he dies?
Borrower still pays back the interest and uses his/her investment portfolio as collateral
@@FIREPsyChat So in theory, those of us who saved up our nest egg have just wasted our efforts because
1) our retirement plans will guarantee our future taxable incomes and therefore the buy, borrow, die strategy may not be required
2) without any retirement savings, we can take a one-time million dollar SBLOC loan and live on a $30,000 a year lifestyle for the rest of our lives.
SBLOC is a line of credit and people who use it has a very high net worth who can pay back the loan at any time. You’re not wasting your efforts to save your nest egg. I’m not advocating to use the buy borrow die strategy this isn’t for everyone. You can’t borrow a million dollars if you don’t have 2 million invested, right?
SBLOC is a line of credit and people who use it has a very high net worth who can pay back the loan at any time. You’re not wasting your efforts to save your nest egg. I’m not advocating to use the buy borrow die strategy this isn’t for everyone. You can’t borrow a million dollars if you don’t have 2 million invested, right?
@@FIREPsyChat Sorry. I meant instead of having saved money into the 401K or (in Canada) the RRSP, the money could have gone into any regular taxable brokerage account to be used as collateral for the SBLOC. So for those who have $1million in their 401K or RRSP, the SBLOC loan isn't worthwhile and income from these retirement accounts are fully taxable.
Too late. The fundamentals no longer work. Interest rates are too high for profits. Real Estate is too high and on a downward trend. HOA's are now too high in most places due to new insurance requirements (based on the new rules when that condo collapsed in Miami). Buy, borror, die is DOA.
I don’t think we should tax the billionaires. Almost all of them add something for the country without paying taxes. Their assets are solving problems and providing jobs.