@@Winner01562 poor guy, believing what the rich tell you.. no matter how much people work, 99.99% of them will never come close to making enough to afford and actually benefit from those loopholes
Offshore accounts can be used to avoid taxes, but they're not foolproof. There are stricter regulations now, and hiding money can backfire if not done properly.
And even if you manage to hide your money, it's not necessarily working for you. It's outside the legitimate financial system, so you might miss out on potential growth opportunities.
The problem is that people don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could help to earn a high in these challenging conditions.
You are right, The US economy is a complex beast, and a financial advisor can help you navigate it. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
@@SV-kr9fu and he's one of those benefactors. The 2017 tax law specifically had a carve out to allow losses in real estate investment to be harvested for 20 years, had from 5 years.
@@sonicpsycho13 : Yes, he also admitted to having taken advantage of the loopholes. And if you were in his position, you would have done the same (I would too).
@@Andres43280 : Well, he has rich donors too, just like the other guy. I am not voting for him, because I like him; I just agree with most of his policies more than the other guy's policies.
@@SV-kr9fu before ADDING to them as well as cutting taxes for 0.01%. Which is how he grew the national debt faster than any president before him. And how in 4 years he was able to add 40% to the total national debt. As for the "wouldn't you crap" no I would not rob from my country in "technically legal ways". Nor would I try to find ways out of being a man who "pays my bills" like he has done by stealing directly from thousands of workers by refusing to pay. And weaponizing courts against workers knowing they dont have the funds to fight his endless legal challenges. But it is a good strategy for him to campaign on aknowledge problem. MAKE PROBLEM WORSE then go "see see I told you there was a problem". Its like a infinitely self fulfilling prophecy they can keep tearing this country down for their personal benefit. And use the "problem they created" as a election platform.
Step 1: Be company chairman Step 2: Own lots of stock Step 3: Take out a loan using investments as collateral Step 4: Use loan to buy more investments and assets Step 5: Play "Where in the world is Carmen Sandiego?" metaphorically speaking Step 6: ? Step 7: PROFIT!
@@j.b.2561they don’t have to, they only have to pay the monthly interest which is why some CEOs pay themselves so little salary; it’s just enough to pay the interest on the loans and to pay very little in taxes while the rest of their income is in the form of stocks. Then they just rinse and repeat.
Invest judiciously, keep a stop loss figure. Shuffle between debt and equity wherever the ratio goes too off your target. As for the target, I recommend a Ratio like this Debt % should be equal to your age in years. If you are 20, debt is 20%, reset in equity. If the market falls or rises drastically, your debt % will change, which you should rebalance to 20% and bring back equity to 80%. Thus you would have bought low or booked profit depending on if it was a crash or a bull run.
Effective personal finance management is more important than the amount of money saved, regardless of whether income is earned through job or investment. Individuals can seek counsel from a certified financial advisor to optimize financial outcomes, who can provide specialized advice and methods to decrease expenses and maximize income.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like ‘Carol Vivian Constable’ who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Becoming a good trader takes time and patience. When I first got into trading I was liquidated twice and I lost my entire mortgage deposit. I could have given up. But I decided to learn how to tradei put it to practice. I'm glad I made that decision today.
Everyone needs more than their salary to be financially stable. Best thing to do with your money is to invest it rightfully because money kept in reserved is dormant.
The process of trading can be complicated when you have limited knowledge. However with the right strategy and setup, you can be successful. That's the whole point of investing. I got into the market with 10k and up to 76k in a short period of time. I was able to build a business from my returns♥️♥️
I am 53 and retired at 50. 1 thing I did do to retire early was to get out of the 401K and IRA programs. Bought rental real-estate and I am now a Limited Partner in about 1500+ units from collabrative efforts in the fund my estate planner has me invested in. I do not work.
I only contribute 5% to get full company match, that’s it. The 401K plan is designed for you to work until you are about dead. Also, the government does not have their hands on it yet either.
My wife and I live off of our 401K. We don't work. I recommend highly to everyone to build your 401K or Roth IRA's as an alternate revenue stream in retirement to your Social Security. An observation on 401K's is when it gets over 300K it starts to accelerate. When you get over 500K it can really accelerate as the stock market grows.
I learned about govt actions from cfp in ny by name ‘’Aileen Gertrude Tippy’’ . Ms. Aileen explained the benefits of long-term Treasuries and alternative investments, which the govt doesn't disclose.
If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you...prevent inflation
Interesting, This is superb! Information, as a noob it gets quite difficult to handle all of this and staying informed is a major cause, how do you go about this are you a pro Investor?
I feel Investors should exercise caution with their exposure and.exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or a licensed expert in order to navigate this recession and achieve potential high yields
Prioritizing effective personal finance management holds greater significance than the sheer amount saved, irrespective of income source. Consulting a certified financial advisor can offer tailored strategies to optimize financial results by reducing expenses and enhancing income, regardless of whether it's earned through employment or investments.
Brian Humphery Services was my hope during the 'bear summer' last year. I made so many mistakes but also learned so much from it, and of course from Brian.
Gotta love a guy who made a ton of money off his home state of Washington and then when it came time to pay some of it back he decided to leave and show them the finger.
@margaritoamargo6347 but he's from Florida and good on him. WA states greedy that's why retirees often leave. I'll never forget when they thought about putting a toll on I-5. It's crazy.
@@margaritoamargo6347 So are you saying that Jeff Bezos payed no taxes when he lived in Washington state? You should get in touch with the state dept of Revenue and let them know.
Also don't forget that the interest expense paid on the massive amounts of debt that billionaires owe is actually tax deductible because it's secured against an asset! Same way that homeowners can deduct the interest on their mortgages, but billionaires get to take full advantage of this tax break as well. However, if you just have a personal loan from the bank, sorry! No deduction for you. Interesting how that works, isn't it?
I don't think that matters so much. The rich are not going to carry a debt and lose money in the interest. I believe how it works is that the rich will pay off those loans almost immediately. So there's little to no interest cost and the proceeds from cashing in the investment is not taxed because it is used to pay off a debt. The video didn't make that very clear.
@@jbluther How are they getting the money to pay off their loans if all their wealth is tied up in assets? Yea the video just skimmed that part. I need more info
Yep everything is completely and totally biased and unjust. This rigged "system" is despicable and the "trickle down" mafia is out of hand with their corrupt "citizens united" buying the Supreme Court to shred the 1st and 4th Amendments and farm us all as the livestock of the one percent
@@jbluther I think most are doing the opposite as long as earning > interest - tax deduction on interest + capital gain tax, which is the case most of time. so it makes every sense to borrow against their stocks instead of selling the stocks in terms of profit, company control, and tax implication.
@@Zizzarazzo They don’t pay off the loans, period. You pay the (very low) interest on the loans which is a heck of a lot less than taxes, as well as being tax deductible. The lender gets the principal back when you die, but it’s a fraction of your wealth by then due to compounding. Say I borrow $1M on my $5M investment and live off $100k/year for ten years, tax free. When the money has run out, I owe $1M… but my portfolio is now worth $20M because it doubled every 5 years. I borrow $5M so I can spend $500k/year for 10 years, and I’m carrying a $6M note - and my portfolio is $80M. I keel over and my heirs get $74M that I was never taxed on.
Now show us the justification where its 100% legal for politicians to do insider trading but an average consumer could spend life in prison for doing the same
It's not justifiable and should be illegal. However, there's a difference between insider trading and trading with public knowledge. The problem can lie in determining what's insider knowledge and what's publicly available knowledge. In 2020, plenty of people could have acted on the assumption that pharmaceutical stocks would rise significantly once covid hit the news cycle. There are plenty of people in Congress (legislators and staff), who are our were just regular people. They have 401k's, 529's, IRA's, mutual funds, etc. We can't make simply investments or owning stocks illegal for them.
it's not legal for politicians to do insider trading. Insider trading laws apply to everyone. Do you care to cite your reference that politicians are exempt from inside trading laws?
This video is a PERFECT example of the economic illiteracy of PBS. Example 1: Why is there a "step up" in basis on inherited stock? --- It's true that there is a step up in basis for inherited stock that applies to the inheritor's capital gains. But it's untrue that the step up isn't taxed (as the authors of this video either mistakenly or intentionally forget to mention). The step up in basis is taxed at the inheritance tax rate of 40% for the federal government alone. That 40% tax is paid on both the REAL increase in the value of the stock and the INFLATION driven increase. The inheritor pays lots of taxes even on inflation which massively enriched government to the detriment of citizens. Why is that done? First, because a significant portion of the NOMINAL gain on a stock results from inflation. Inflation enriches government coming and going. People shouldn't be taxed for inflation which is why there is indexing on federal income tax. Second, there is a record keeping issue. Let's say, my Aunt Mini bought some stock in 1975. She passes away in 2025 and leaves it to me. For me to pay the tax on the gain, I would have to try and find her records from fifty years ago to determine what she paid for the stock. That would be a nightmare for taxpayers and even for the IRS. Example 2: So called "tax loss harvesting". --- Let's say I invest in a factory that will last ten years. The proposition is that I will invest USD 20 MM and I will earn a profit of USD 50 million. My tax rate is about 50% (considering federal, state, local, and other taxes). So I pay USD 25 million in taxes. I would net USD USD MM leaving me with a 20% gain. But here's the trick our friends from PBS (government funded) would like to use to get a free tax hike. Taxes are paid on an annual basis. So in years one and two, while building the factory, I invested USD 10 MM and gained no revenue. I lost USD 10 MM each year, although I was hiring people, buying things, and helping the economy. Now my factory goes into operation. But for the first three operational years (years 3, 4, 5) I lose money. In years six through ten I make a fortune in profits. But those profits were only possible because of my investment and losses in the first five years. The folks at PBS want to tax my on only my profits, ignoring my investments, costs, and losses. They won't let me reduce my profit by the USD 20 MM I invested or the USD 30 million in operating losses I took while getting the factory up to speed. They want to tax me at 50% on USD 100 MM. That is they are taxing me not only on my profits. But they're also taxing me on the amount I invested, my costs, and my losses. That is they want USD 50 MM in taxes. They want ALL THE PROFIT for government. THEY ARE GREEDY. Here's the question. Would you invest (and risk) USD 20 MM just to hand over the all the profits to government? Neither would anyone else. The result would be no investment, no jobs, and no taxes paid. The effect of what PBS is suggesting was tried in the 1970s under Jimmy Carter. The stagflation that resulted was so bad that even liberal states like Massachusetts and New York voted to re-elect Ronald Reagan after he corrected the policies PBS is pushing. Example 3: "Tax havens." --- "Tax havens" is the term smug leftists use to describe jurisdictions that don't tax their citizens into economic oblivion. When you go to shop, you look for a store offering the merchandise you want at the lowest price. Stores with low prices are able to do so because they are efficient in how they spend their money. The smug leftists in this video would probably accuse you of choosing a "retail haven" if you shop at Target rather than Macy's. This exposes the thinking of our smug leftist friends. They criticize states such as Texas, Washington, and Florida for having low taxes without even looking at how well those states are carrying out the tasks of government for their citizens. THEIR PREMISE IS THAT HIGHER TAXES ARE ALWAYS BETTER. To them the happiness or well being of the citizens counts for nothing. All that matters is the imposition of confiscatory taxes.
There was a crucial detail missing from this video. Estate taxes. Anything inherited over 13.6 mil will owe estate taxes. This is actually decreasing back to 5.49 mil for tax year 2026. So basically, dying is only a "loophole" for the rich not the ultra rich.
There are also some pretty crucial details about hobby vs. business losses that got left out too. If a business has losses too many years in a row, the IRS can rule that it's a hobby and disallow the losses. There's more rules that determine what counts and what doesn't, but it's not a free for all like they describe.
@@shelbygardner1193right but isnt that the reason they sell such businesses? The constant exchange means such record cannot be established. That or they simply pheonix the business
@@sirdiealot53 Assets placed in an irrevocable trust are subject to lifetime gift limits. Gifts during your lifetime reduce the amount available at death for Estate tax exemption.
If you save enough taxes during your entire 80 year life, you can make back the estate tax in as little as 10 years, if your investments are good. The hard part is actually ignorant heirs, that blow all the money on crap, instead of earning back the estate tax losses.
it exists, its called negative gearing in Australia lol, could be something else in other parts of the world. It's not perfect as it causes a certain type of behaviour and could blow up if uncertain times occur and the economy moves out of its normal band range but for majority of the time it helps middle class dodge a significant amount of taxes
AI stocks will dominate 2024. Why I prefer NVIDIA is that they are better placed to maintain long term growth potential, and provide a platform for other AI companies. I know someone who has made more than 200% from NVIDIA. I'll also take these other recommendations you made.
Agreed! this is why I work with one. My $520k portfolio is well-matched for every market season yielding 85% rise from early last year to date. I and my advsor are working on more figures for this year. IMO, financial advisors are the most sought-after professionals after doctors.
Thanks for sharing. I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks
Some of these methods are truly for the rich. But some of them are used by normal, everyday Americans. Tax Loss Harvesting and Step-up Basis are not that uncommon.
*Appreciate your videos! I’m 54 and younger generations should know there’s no shortcut to acquiring wealth, but there are ways to go about it. Fellow millionaires don’t tell the poor/middle class they need the knowledge of finance coaches to help build their wealth. If anyone here needs a good coach, here’s it..*
These billionaires which I am not one of them but they worked hard getting where they are they did not need to use this superstition that video talks about to become a billionaires they have all kinds of antiques, heirlooms and many clothes that they don't wear anymore and it doesn't stop being rich they work hard they know where to invest their money in and what kind of strategy to use to make themselves rich so don't need to do this false teachings says to do.
Until their own emotions burn them, people downplay the value of counsel. A few summers back, after a protracted divorce, I needed a big push to help my firm survive. I searched for consultants with the right credentials and found the most qualified one. Despite inflation, he assisted me in increasing my reserve from $275k to $850k.
@6:20 No, losing money on a business is never a good thing. It would make zero sense to buy a business and lose $10M on it for the sake of saving $4M in taxes.
@@judgetwelve I love when people complain about this, they leave out the fact that they live in a Democracy and this rule applies to everyone, even the homeless bum. And so there's nothing stopping everyone from using it, but essentially the rich behave like the students that get straight As in school and then they complain at them getting straight As, whilst they themselves are bringing in Fs or Ds for their own grades. Maybe get better financially educated and stop your whining, all this information is publicly available and there are thousands of RUclips finance channels explaining it, but nobody wants to do jack other than complain about their piss poor understanding of "loopholes". And yeah it's a piss poor understanding of loopholes, because everything would be a loophole under their definitions use. Using your children under the EITC as a deduction to pay less taxes and get tax credits? Loophole. Using childcare and medical insurance payments to pay less taxes? Loophole. Using student loan debt and school costs to pay less taxes? Also a loophole. Every loophole they complain about the rich using, they also have access to use, this is not an exclusively "rich only" club. The only difference between the rich and the poor is that the rich have more money to work with and the poor have less money to work with and so the compounding interest rates on poor people's wealth will be smaller than those of rich people. The poor can very much do "Buy, Borrow, Die", the poor can open up LLCs and use them as ways to lower their own taxes (I'm not gonna delve deeply into this), they can move to a different state to avoid taxes, the poor can do strategic sell offs of assets at a loss to pay less taxes. BUT THIS ALL REQUIRES EFFORT FROM YOU.
They might carry the loans indefinitely if the interest is say 2% and their portfolio grows by 6%. Also some of their investments might pay out dividends that they could use to pay down the loans. There are also situations that sometime arise with publicly traded companies that can result in a forced "sale" of their shares (often merger related) and associated taxes despite their best efforts not to voluntarily have a realization event - hopefully only a small portion of a portfolio is affected by this.
Loopholes and dark pool trades make it feel like the market isn’t fair to regular investors. I started putting money into ETFs and bonds only after I had more funds to invest. Now, given my age and how complicated the market has become. I'm questioning if sticking with these investments is still the best strategy. It feels like diversification might just be limiting my returns instead of managing risk
I'm approaching retirement and having a financial advisor has been helpful. I started investing later than most, so relying on compound interest from index funds or bonds wasn’t enough for me. Despite that, I’ve managed to do well and am on track to retire with around $6 million
I avoid specific recommendations since everyone's situation differs, however my experience working closely with Emily Ava Milligan over the years has been exceptional. You might find it worthwhile to see if she aligns with your needs
Doesn’t seem quite right to tap the like button, since I hate the reality you’re exposing…but I appreciate you exposing it, so I did go ahead and tap. Given the enormous influence the wealthy have on Congress, via lobbying and cultivating personal relationships, I’m not terribly hopeful any loopholes will be closed.
@@PrometheusMMIV Thanks for correcting me. I haven't personally filed in a long lonnng time. Seems crazy they got rid of it then .. I remember the guy in charge at the time saying it was going to be reduced to the size of a postcard. They even made mock-ups. I suppose I shouldn't be surprised.
The "Loophole" >Takes out a US$40 Billion loan from banks at 2% interest and uses their hundreds of billions in stock value as collateral Average worker: *surprised Pikachu face*
just b aware that the otherwise illegal and usurios interest scheme and mis managment by student loan conglomerates is the only guarantee u get that your loan cant b paid off. even people putting in 20yrs of public service did not get loans paid. nterest scheme
Money is not meant to control people rather it is meant to be put to work producing more money for you. You cannot build wealth without putting money in its rightful place.
Thanks for the advice! I'm new to financial planning and wasn't sure where to start. Any tips on finding a reliable financial adviser or resource to guide beginners?
As a beginner, it's essential for you to have a mentor that is verified by finra and SEC to keep you accountable. I'm guided by a widely known financial consultant Stacey Macken
You definitely have my sub. This content is next level. For me Eledator was the turning point. Please keep doing what you do and keep being you, love it.
They already did that. Anything tucked away in an irrevocable trust and kept out of the estate doesn't get a step up in basis. Anything that gets a step up in basis is counted against your estate tax exemption or hit with an estate tax if the estate is big enough.
@@ryann8348 You're absolutely not seeing the bigger picture. If you have 200K in stocks it might feel unfair to pay anything out of it, but this goes beyond just YOU! You are may feel that you "worked hard" to "earn" the ability to invest, but you fail to recognize how much you have been given as a matter of course. It is only the extreme outlier who have 40K in investments or more and were not given opportunity and resources beyond the wildest dreams of any real worker.
You keep calling it capital gains BEFORE the investment is sold. That is incorrect - it is unrealized gains. It cannot be taxed because it has no “real” value until it is sold.
7:35 such a stupid idea - is the government going to give them money for their unrealized losses as well? And for people who think not my problem since i dont have a 100mil realize that normal income taxes started off as only for the super wealthy and now we all have to pay it.
Naomi Dean stands out from other brokers because of her realistic approach, unlike those who often set unattainable targets and fail to deliver. She's truly unique!
or Texas or Nevada. Probably worthwhile to note that because a state doesn't tax income or capital gains does not automatically make them a no-tax state; whatever is taxed will be taxed greatly or government services and support will reflect the lack of revenue. Property and sales taxes get used to make up the differences, typically. Florida gets an extra whammy with hurricanes, so now one cannot afford to insure real property and dwellings in an otherwise strong real estate market.
@mgunt Because rich people are criminals. You rob a bank? You're a criminal! A bank robs the government and the economy? Perfectly "legal" apparently. "Stealing" food from a convenience store is a "crime" but stealing millions and billions from people's paychecks and the US economy? Acceptable apparently 🤷🏾♀🤷🏾♀😒😒
@mguntAlistair meant that regardless of how their income comes about, it isn't actually earned. No person's labor is worth billions, billionaires existing is in itself absurd.
My husband and I were fortunate enough to be able to pay off our mortgage early. We were both still working, and took the payment amount that we had been using to pay off our mortgage faster and we put it straight into investments. We were able to retire early because of almost 7 years of putting away what would have been our mortgage payment as well as maxing out our 401K/403B plans. Thankfully we were taught by both of our parents the value of living within our means. Thank you for your advice. I know it will help people. we are interested in investments that could set me up for retirement , I mean I've heard of people that netted hundreds of thousands during these crash, I listened to someone on a podcast who earned over $650K in less than a year, what's the strategy behind such returns?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from a market analyst, significantly growing my account to nearly a million. Strategically withdrawing profits just before the market correction, I'm now seizing buying opportunities once again.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
2nd part of my comments that seem to get deleted... On offshore accounts. Most people follow the law, even if they're opening accounts in other countries. The assumption is that they're trying to 'hide' their wealth, but in reality, there are multiple reasons for opening accounts in other countries. Most people doing this are following the law, but people invested in this narrative assume it's only to 'hide' their wealth. The penalty for doing anything illegal is steep. Very few people risk it. As for all the legal loopholes, the key work here is legal. They're not 'hiding' their wealth. They're following the law. If anyone is to 'blame', it's legislators that pass 'flawed' laws.
In the borrow, buy, die strategy there is one thing I am unclear on. When they die, their estate has to cover the loans and probably have to sell assets to do so. Are the assets sold by the estate to cover the loans also on a stepped up basis, or do they pay the full capital gains tax?
well if the next of kin inherits the investments at 0 increased valuation as mentioned, they can sell part of them to repay the loans without having to pay any taxes since it was considered to have 0 appreciation in value once it went to the new owner.
PBS is economically illiterate. What scares me is that video like this may be presented to the pupils in government schools. I missed an example in my comments below. Example 4: Taxation of expected FUTURE profits. --- Let's say the ACME company issues 100 shares of stock. In a given year it earns a profit of USD 100K. The government has two ways of collecting income tax on this gain. It could ... (1) Impose an income tax on the company e.g. 50% of USD 100k = USD 50k tax (2) Impose a tax on the dividends paid to the shareholders e.g. 50% of USD 1,000 per share times 100 shares = USD 50k tax Here, government was really tricky. First it imposed income taxes on corporations. Later it imposed taxes on dividends. THIS IS DOUBLE TAXATION. The same income is being taxed twice. But now PBS wants to go further. A share price is the present value of all EXPECTED future profits. So to tax unrealized gains in share price, the government wants a share of EXPECTED future profits that haven't even been earned yet. That would be like the government ESTIMATING that, in your lifetime, you'll earn USD 2 million and demanding that you pay taxes on that today.
Depends what you use the loan for but usually there is a mix of loans, elon did it to buy twitter, he expects twitter to make money and essentially pay back the loan through twitters (X's) business revenue. What this means is he keeps his tesla shares, his new business (X) pays back that debt for him and at the same time it grows in value, so debts are paid off through reinvesting into higher earning assets. Most of these guys know how much of the loan to use for endulgence and how much to use for business. Also, in all honesty when you have 10's of millions of dollars through successful business earnings, you aren't dumb enough to blow it on a private yacht that costs 10's of millions of dollars. You usually get a house worth a million, maybe a car and a few of lifes luxuries. Then you would take some cash out against your shares at a low rate of 3% - 6% depending on your relationship with the bank and invest the rest in high yeilding funds which returns more than that. Your income from the investments can then pay for the 1-3 million you borrowed for consumtive uses like your car and house. So say you borrowed at 6% against your shares for 3 million for your house, then borrowed another 6% interest and take out 7 million to reinvest it in something that returns 12%, could be a new business, could be into the financial markets, then those assets grow and part of those returns goes back to pay back your debts. You use leverage to get richer without having to pay taxes at all. Then you rinse and repeat.
@@VideoSiteAccess The investor is a great credit risk, always pays the bill on time and gets best interest rate (the lender may do other, more profitable business with the investor for other reasons, too), say 2%. The investment that secures the loan is making 8%. After the loan interest the investor is still making a return of 6% and the lender, getting their interest payment as contracted, have no reason to call the loan for final payment - it's a perpetual source of secure income. One borrows incrementally against the collateral, say 5% or so every year.
6:30 when those companies lose money, it isn't a good thing for them. That's a dumb statement. If you lose $100k from your business, you don't pay $100k less taxes. You pay, at most, like $50k less. That's still a net loss of $50k.
Putting well-earned money into the stock market can be over emphasized for first-time investors, unlike a bank where interest is sure thing! Well, basically times are uncertain, the market is out of control, and banks are gradually failing. I am working on a ballpark estimate of $5M for retirement, and I have a good 6-figure loaded up for this, could there be any opportunity for a boomer like me? I'm nearly 60.
If you're new to investing or don't have much time, it's best to get advice from an expert. Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
The initial statement of the irs estimating that wealthy are skipping out on $160B a year in taxes implies that they are doing so illegally. Then the video walks through both legal and illegal ways in which wealthly people may avoid paying taxes with the same tone of "the wealthy are cheats" and never clarifying how much of that $160B number is attributed to illegal or legal means of tax avoidance. This feels borderline "misinformation" to me. Also the buy, borrow, die segment implies that every wealthy person who borrow large sums of money is doing it solely to avoid taxes and never discusses other reasons they may have, like maintaining voting control of their company, or just betting that their equity will have a higher rate of return than the interest rate of the loan
These topics should be learned in school. In these 8-9 minutes you guys told us way more valuable things that we can get in one year of economics in school lol
Regarding the "Buy, Borrow, Die?, If someone takes out a loan on their investment, but dont sell their stock, how do they make payments on the loan to pay it back?
The investment could pay out dividends which could be used to make payments. Also I've heard its worth it to carry these loans since their interest rates are lower than the long-term expected return on a diversified portfolio.
Can confirm, these financial and legal tools are available to everyone, but you have to have the assets and proper structures first before you can benefit from the 400+ deductions available to business owners and real estate investors.
That Step up in Basis rule is astonishingly terrible. Here in Canada the capital gains are considered realized at death and the estate has to pay the taxes before distributing to the heirs (except to a spouse - things can be transferred directly to a spouse but the cost basis doesn't change). It makes for messy planning when someone wants to pass down the family cottage, but at least the taxes get paid.
Getting rid of the basis step-up probably wouldn't be constitutional in the US anyway. And any party supporting it would pretty much instantly hemorrhage voters in retiree states like Arizona or Florida. Old folks are not going to vote for someone who wants to get in the way of them leaving their assets to their kids. Young people may support that stuff (while they are young) but old people definitely do not. So you can pretty much write this one off as a policy wonk's pipe dream.
Isn't it something like 50% of the capital gain? I just saw something from The Plain Bagel that it may go higher. My dad is 92 has a condo and cottage both of which have gone way up in value thanks to NS real estate so not sure how things will work out tax wise.
This video is a little bit misleading, because they don't touch on estate taxes, which are similar to what you described. The heirs don't pay tax, but the estate certainly does.
@@shelbygardner1193 I did check that Plain Bagel vid. The tax would be now around 66% of the gain taxed at the estates rate but IDK. Sounds like there’s also an exclusion amount. Hoping when things do happen we can keep the cottage in the family.
I don't know what the exclusion amount is in Canada, but there's generally at least something. The US federal exclusion is pretty high, but a lot of the states' are smaller.
Help me understand.. when you take out a loan.. you have to make payments.. you are also accruing interest so you'll owe money.. how do they get by this? And not owe the money if they can't pay it off since all their wealth is invested?
The thing with regulations is that the rich always find the way to not pay taxes. They have an army of lawyers and financial advisors to help them continue doing that.
@mgunt I paid 1k last year to my CPA and I am not rich. I could afford that even when I was making less. Do you make less than like 30-35k a year? I mean at that point you're not really paying a ton of taxes anyway.
Can you do a video digging more into the Buy Borrow Die strategy, particularly on the Borrow part. I want to understand how the rich are able to borrow long term. Example, Elon took out $13 billion in loans at 4:30 in video, my question is how does he pay down the interest and principle on such a loan?
Wealthy people invest their money and generate jobs, good and services for us all. They are responsible for generating tax revenues through employee payroll taxes, sales taxes, inventory taxes, business income taxes, capital gains taxes, service taxes, etc etc etc. The jobs they create and the salaries paid generate income taxes, sales taxes, property taxes, etc etc etc. The goods and services they buy from suppliers create income for those companies and the process starts over again with their tax obligations and employees paying all kind of taxes. All of this is made possible by incentives offered through the tax system to risk their money on start up businesses, investments and ventures. No matter how much you want to feel like it’s unfair, remember that that paycheck you get started with someone risking their own wealth to provide the job you have. The two cents analogy in this video is biased and flawed. Check the data, the wealthiest 1% pay 43% of taxes while making 26% of total personal income. Most companies are struggling to make a 2% to 5% net profit after all the overhead necessary to run a business. And that overhead includes huge taxes from every part of business.
Question: How many of these things can we (as in, normal Americans making, say, sub-100k/year) do? Like, theoretically, I assume we could do most. But practically, why aren't we doing these things? Is it upfront costs? Is it purely education/knowing about these things? Is it a time factor? Are there other barriers to entry that I'm not qualified to even think about/realize? Is the IRS better able to see when people with less money jump/miss a loophole because the finances are more straight-forward (thus an audit is much easier)?
Depending on the opportunity in question there could be a mix of many of those things. For example "Buy, Borrow and Die" only works well at a large scale as you need to be able to borrow money secured by a LARGE investment portfolio at very low interest rates (say something less than 3%) in order to have your portfolio continue to grow on average by more than the loan rate. Average people generally cannot borrow at such low rates. If you look at the publicly available margin account rates posted online by major brokers on smaller loan amounts these rates can be over 13% on a margin loan of less than $25K - this is over twice the expected 6% long-term average return you can expect on a diversified portfolio over the long run. If you want to save additional money for your retirement (or work somewhere that does not offer a 401(k) or similar type of plan) you can put money into in an Individual Retirement Account. This can be a great way to either defer or avoid taxes on investment growth that will support you in your retirement. One problem with this is YOU need to take the initiative to set this up and fund it appropriately. Some people (generally once this account has grown a decent amount) move this money to specialized custodians that enable investment in things beyond stocks, bonds and other publicly traded paper investments. However most people don't know you can do this and these custodians have significantly higher fees than the mainstream ones most of us are familiar with. This can be really good depending on the types of opportunities you might have access to that would benefit from your accumulated retirement funds. Depending on the type of health insurance your employer offers (and that you select during open enrollment) you might be able to put money into a Health Savings Account. A LOT of people either confuse this with the more restrictive "Flexible" Spending Account or don't understand the long-term value of this account and either don't use it or only put enough in to cover expected out-of-pocket costs. If you have a qualifying high-deductible health plan it is best to contribute the maximum allowed to this account (ideally more than your expected expenses) and once you have built up a balance over a few years begin investing these funds for long-term growth. This is a great way to supplement your retirement savings as a large part of expected retirement expenses are medical in nature. At the barest minimum you can reimburse yourself (tax-free) your Medicare part B premium. Once you have utilized employer sponsored retirement accounts, IRA's and (if eligible) HSA's you may need to invest additional money using a taxable account. In this account any interest and dividends earned are taxable as earned and if you realize capital gains from selling investments those are taxable as well - though as mentioned these gains can be offset by also selling investments that have gone down in value as well. Key to this is you have to know about it and be cognizant enough to check your account right after a large market drop to see if your taxable account has any losses to harvest. Above all these ideas all require that you earn more money than you need to live on and are able to put some of the additional funds towards investments that will grow in value long-term. If you live "paycheck-to-paycheck" none of these ideas will be that helpful for you. Upfront costs, time and learning can all be a part of why some people are able to make tax reduction opportunities work for them and others cannot. By the way the foreign accounts mentioned are not very useful for most Americans as the income they earned is legally just as taxable as that earned by an American based account. These also have to be disclosed on both your annual tax return and a separate filing known as a FinCen Form 114. These generally only make sense if you are actually living in another country where it makes sense to have a local bank account to manage your money and easily pay your local expenses. In some countries there can be an "asset protection" benefit to having money there, but that generally requires a trust and not just a personal account.
Can someone explain this to me? If you borrow a loan using your investments as collateral. Don’t you still have to pay off the loan? I’m confused on why this is a strategy.
Look, anyone can do a loophole easily. Take out a HELOC loan on your home. Or refinance a mortgage on your home or investment property. The cash out is tax free.
Great episode. The tax laws are confusing so that less people understand them. A Roth IRA or Roth 401k is a great way for the middle class to avoid paying taxes in the future on any gains that their investments make.
@@BrooklynBaby100 yeah but looking at the rate now taxes prob be higher later so locking in lower now is nice. But if gotcha. I mainly use Roth as a 2nd emergency fund. I have 28k in it that I can withdraw without penalties which you cannot do with normal IRA.
New law that just went into effect is closing one or more of those loopholes. ' Corporate Transparency Act ', no more shell companies. Well can use a shell company, but each one must have a unique address down to the room in a building and a face+name that is running it which include all legal documents (so no more fake person running a shell company). So places like delaware can no longer stack 100's off thousands of businesses to a single street address.
They should be able to hide they’re money and so should you , no one should have to pay banker there’s income it’s not the American people fault that the government borrowed money from devil worships that’s on you I’m not paying for wars and sex trafficking I refuse just say have blessed day
Ukraine war. Funding Israel massacre. Funding our illegals that affect congress representation. Funding pfizer and moderna under "emergency" for gene therapies with high risk of clotting and myocarditis for something that kills 0.1%. Not funding American veterans while funding other countries wars.
lol do you really think the government would be responsible with that $160B? They’re over 30 trillion in debt. It would last less than 10 days and nothing would improve.
i dont get how financing lifestyle with loans dodges taxes, you still have to payback loans by selling investments eventually. I get that you want the investment to grow at a higher rate of return than the loan but im missing something here.
Why do they only suggest solutions from progressive or liberal politicians? Plenty of conservatives and libertarians are in favor of having a flat income tax across the board, including taxing capital gains as ordinary income. That would also close the loopholes.
Let's be honest - no one in their right mind wants to pay more taxes than they are owed. The real problem is the tax code. If I follow the tax code and can legally get away with paying fewer taxes, why wouldn't I? Not like Washington will spend my money more responsibly.
I am trying to contradict 7:00 - 7:17 but my post was deleted twice with links regarding differing tax rates between different classes. Generally, the lower your income, the lower your tax rate. If you have young children, the lower you tax rate, but the financial burden is still greater (raising children expenses etc). "As household income increases, average income tax rates rise" -taxfoundation
I agree with some of the things you stated. I put in 20k into various assets late last year and flipped into six figures within a few months and still going. I’ve always been an advocate of investing because it has been rather rewarding. I hope to attain financial freedom soon. One more thing, keep up the good work guys.
It’s not rocket science. As I said previously, I got into stocks, index funds, and REITs, myself but wasn't getting the results I wanted the first couple of months. Got tired of losing and decided to seek mentorship from Jonas Herman, a certified fiduciary who helps oversee my investments.
Will you guys behind the bots quit talking to yourselves??. 😂 This stuff does not work on people because you don't talk like normal human beings. You talk like advertisers trying to sell stuff. And you insist on using and giving people names. Nobody runs around blurting out people's full name like that. Yall literally look like walking virtual commercials. "oh, I'm interested in investing? Does anyone know who I can contact" "I personally use john doe, he made me 50k in 3 weeks! Contact him" Sounds like a tide laundry commercial. Get your sheets whiter than white with tide ultra clean. 😂 Good lord, the lack of creativity...
The system was designed to favour the rich, these loopholes are designed to further aid them, With inflation at 3.70%, I'm looking to enter the market now and ride it out as the economy improves. I'm putting together a $350,000 portfolio with Stocks and ETF's. Do you have any recommendations with solid cash flow?
Knowledgeable Investors know where and how to put money during a crisis in order to reduce risk and maximize returns. See a market strategist with experience if you are unable to manage these market conditions.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850K.
Great gains! Can you share your advisor details? I'm gaining more cash flow from my job and want to invest in stocks and alternative assets to build wealth.
Great gains! Can you share your CFP details? I'm gaining more cash flow from my job and want to invest in stocks and alternative assets to build wealth.
Stepped-up basis only benefits working class people to top 1% rich people, not the ultra-wealthy. The whole purpose of stepped up basis is to avoid double taxation because you pay a 40% estate tax on any estate above $14.61 million ($13.61M exemption + $1M for max tax bracket). So paying estate tax and capital gains tax would be a double tax. For the billionaires, a 20% capital gains tax is much better than a 40% estate tax (which taxes both gains and what you put in), so they set up dynasty trusts and other entities to avoid estate taxes (but they don't benefit from stepped-up basis either). The only people who benefit are people who pass down less than the $13.61M exemption since they get pay no estate taxes and benefit from stepped-up basis. If you all remove stepped-up basis, you're only increasing taxes for yourselves on the house and stocks you'll inherit, while the billionaires will be unaffected.
Reminds me of "The Tax Poem." "Tax his land, Tax his bed, Tax the table at which he's fed. Tax his tractor, Tax his mule, Teach him taxes are the rule. Tax his work, Tax his pay, He works for peanuts anyway! Tax his cow, Tax his goat, Tax his pants, Tax his coat. Tax his ties, Tax his shirt, Tax his work, Tax his dirt. Tax his tobacco, Tax his drink, Tax him if he tries to think. Tax his cigars, Tax his beers, If he cries tax his tears. Tax his car, Tax his gas, Find other ways to tax his @ss. Tax all he has, Then let him know, That you won't be done till he has no dough. When he screams and hollers, Then tax him some more, Tax him till he's good and sore. Then tax his coffin, Tax his grave, Tax the sod in which he's laid. Put these words upon his tomb, 'Taxes drove me to my doom...' When he's gone, do not relax, it's time to apply the inheritance tax."
Not quite true, let’s use Warren Buffett as an example might not pay tax on his “Berkshire stock” investment unless he sells it or gets a dividend, but Berkshire (eg the company Buffett owns represented by that stock) itself pays a lot of tax on the investment earnings. So often super rich people own companies that pay a lot of tax, even though they themselves pay much less tax because the will only sell small amounts of stock to fund their lifestyle, but the companies do pay company tax.
Congress isn't debating the loopholes because most of them benefit from the loopholes.
Just like what Trump has said before.
@@SV-kr9fu It's almost like Trump knew what they were doing, because he's better at it... that's why he now owns half of them.
And so can you
@@Winner01562 Like most people I don't have enough money to even begin using the loopholes. And my point was WHY they wont fix the loopholes.
@@Winner01562 poor guy, believing what the rich tell you.. no matter how much people work, 99.99% of them will never come close to making enough to afford and actually benefit from those loopholes
Offshore accounts can be used to avoid taxes, but they're not foolproof. There are stricter regulations now, and hiding money can backfire if not done properly.
That's true. Improperly hiding assets can lead to hefty fines and penalties. Plus, there's the risk of the hidden assets losing value.
And even if you manage to hide your money, it's not necessarily working for you. It's outside the legitimate financial system, so you might miss out on potential growth opportunities.
Exactly. A strong portfolio should be transparent and well-diversified across different asset classes. This helps weather economic storms.
The problem is that people don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could help to earn a high in these challenging conditions.
You are right, The US economy is a complex beast, and a financial advisor can help you navigate it. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
Considering who funds the legislators' campaigns, I'm not expecting any tax law changes anytime soon....
Just like what Trump has said before.
@@SV-kr9fu and he's one of those benefactors. The 2017 tax law specifically had a carve out to allow losses in real estate investment to be harvested for 20 years, had from 5 years.
@@sonicpsycho13 : Yes, he also admitted to having taken advantage of the loopholes. And if you were in his position, you would have done the same (I would too).
@@Andres43280 : Well, he has rich donors too, just like the other guy.
I am not voting for him, because I like him; I just agree with most of his policies more than the other guy's policies.
@@SV-kr9fu before ADDING to them as well as cutting taxes for 0.01%. Which is how he grew the national debt faster than any president before him. And how in 4 years he was able to add 40% to the total national debt.
As for the "wouldn't you crap" no I would not rob from my country in "technically legal ways". Nor would I try to find ways out of being a man who "pays my bills" like he has done by stealing directly from thousands of workers by refusing to pay. And weaponizing courts against workers knowing they dont have the funds to fight his endless legal challenges.
But it is a good strategy for him to campaign on aknowledge problem. MAKE PROBLEM WORSE then go "see see I told you there was a problem". Its like a infinitely self fulfilling prophecy they can keep tearing this country down for their personal benefit. And use the "problem they created" as a election platform.
Well I feel stupid going to work
We all should
If you're only feeling stupid now, great. I've being stupid for about 15 years when I found this out and continue to work.
Why do you feel stupid?
Well that's the first step to any of the other way to dodge taxes.
Your hard work will eventually paid off 😅one day
Step 1: Be company chairman
Step 2: Own lots of stock
Step 3: Take out a loan using investments as collateral
Step 4: Use loan to buy more investments and assets
Step 5: Play "Where in the world is Carmen Sandiego?" metaphorically speaking
Step 6: ?
Step 7: PROFIT!
More like Cayman San Diego
Ok and how do they pay off their loans if they buy luxury goods with it?
Become too big to fail
@@j.b.2561they don’t have to, they only have to pay the monthly interest which is why some CEOs pay themselves so little salary; it’s just enough to pay the interest on the loans and to pay very little in taxes while the rest of their income is in the form of stocks. Then they just rinse and repeat.
@@j.b.2561
Get a bigger loan 😂
Then repeat until you kick the bucket
Invest judiciously, keep a stop loss figure. Shuffle between debt and equity wherever the ratio goes too off your target. As for the target, I recommend a Ratio like this Debt % should be equal to your age in years. If you are 20, debt is 20%, reset in equity. If the market falls or rises drastically, your debt % will change, which you should rebalance to 20% and bring back equity to 80%. Thus you would have bought low or booked profit depending on if it was a crash or a bull run.
Effective personal finance management is more important than the amount of money saved, regardless of whether income is earned through job or investment. Individuals can seek counsel from a certified financial advisor to optimize financial outcomes, who can provide specialized advice and methods to decrease expenses and maximize income.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like ‘Carol Vivian Constable’ who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Thank you for this Pointer. It was to find her handler, She seems very proficient and flexible. I booked a call session with her.
Everyone family has that one person who will break the family financial struggle I hope you become the one 😏
Becoming a good trader takes time and patience. When I first got into trading I was liquidated twice and I lost my entire mortgage deposit. I could have given up. But I decided to learn how to tradei put it to practice. I'm glad I made that decision today.
Everyone needs more than their salary to be financially stable. Best thing to do with your money is to invest it rightfully because money kept in reserved is dormant.
The process of trading can be complicated when you have limited knowledge. However with the right strategy and setup, you can be successful. That's the whole point of investing. I got into the market with 10k and up to 76k in a short period of time. I was able to build a business from my returns♥️♥️
Trading,,,,without any guilde is so risky you need a good Mentor like DEREK MIA SCOTT strategy to guide your trades,,,,,
@@GarshcaMendy.(Oh please how can someone get to speak with Mentor Mia
I am 53 and retired at 50. 1 thing I did do to retire early was to get out of the 401K and IRA programs. Bought rental real-estate and I am now a Limited Partner in about 1500+ units from collabrative efforts in the fund my estate planner has me invested in. I do not work.
I only contribute 5% to get full company match, that’s it. The 401K plan is designed for you to work until you are about dead. Also, the government does not have their hands on it yet either.
My wife and I live off of our 401K. We don't work. I recommend highly to everyone to build your 401K or Roth IRA's as an alternate revenue stream in retirement to your Social Security. An observation on 401K's is when it gets over 300K it starts to accelerate. When you get over 500K it can really accelerate as the stock market grows.
If I may ask, as in withdrew all of the money from the 401K and IRA programs? If so, what was your strategy behind that decision? Thank you.
I learned about govt actions from cfp in ny by name ‘’Aileen Gertrude Tippy’’ . Ms. Aileen explained the benefits of long-term Treasuries and alternative investments, which the govt doesn't disclose.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you...prevent inflation
Interesting, This is superb! Information, as a noob it gets quite difficult to handle all of this and staying informed is a major cause, how do you go about this are you a pro Investor?
I feel Investors should exercise caution with their exposure and.exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or a licensed expert in order to navigate this recession and achieve potential high yields
Prioritizing effective personal finance management holds greater significance than the sheer amount saved, irrespective of income source. Consulting a certified financial advisor can offer tailored strategies to optimize financial results by reducing expenses and enhancing income, regardless of whether it's earned through employment or investments.
Brian Humphery Services was my hope during the 'bear summer' last year. I made so many mistakes but also learned so much from it, and of course from Brian.
He is really a good investment advisor. Was privileged to attend some of his seminars.that's how I started my own crypto investment
3:24 Giving Jeff Bezos the smile was a nice design touch.
Gotta love a guy who made a ton of money off his home state of Washington and then when it came time to pay some of it back he decided to leave and show them the finger.
@margaritoamargo6347 but he's from Florida and good on him. WA states greedy that's why retirees often leave. I'll never forget when they thought about putting a toll on I-5. It's crazy.
It's the Amazon logo, not a smile.
It's the Amazon logo, not a smile.
@@margaritoamargo6347 So are you saying that Jeff Bezos payed no taxes when he lived in Washington state? You should get in touch with the state dept of Revenue and let them know.
Also don't forget that the interest expense paid on the massive amounts of debt that billionaires owe is actually tax deductible because it's secured against an asset! Same way that homeowners can deduct the interest on their mortgages, but billionaires get to take full advantage of this tax break as well. However, if you just have a personal loan from the bank, sorry! No deduction for you. Interesting how that works, isn't it?
I don't think that matters so much. The rich are not going to carry a debt and lose money in the interest. I believe how it works is that the rich will pay off those loans almost immediately. So there's little to no interest cost and the proceeds from cashing in the investment is not taxed because it is used to pay off a debt. The video didn't make that very clear.
@@jbluther How are they getting the money to pay off their loans if all their wealth is tied up in assets? Yea the video just skimmed that part. I need more info
Yep everything is completely and totally biased and unjust. This rigged "system" is despicable and the "trickle down" mafia is out of hand with their corrupt "citizens united" buying the Supreme Court to shred the 1st and 4th Amendments and farm us all as the livestock of the one percent
@@jbluther I think most are doing the opposite as long as earning > interest - tax deduction on interest + capital gain tax, which is the case most of time. so it makes every sense to borrow against their stocks instead of selling the stocks in terms of profit, company control, and tax implication.
@@Zizzarazzo They don’t pay off the loans, period. You pay the (very low) interest on the loans which is a heck of a lot less than taxes, as well as being tax deductible. The lender gets the principal back when you die, but it’s a fraction of your wealth by then due to compounding. Say I borrow $1M on my $5M investment and live off $100k/year for ten years, tax free. When the money has run out, I owe $1M… but my portfolio is now worth $20M because it doubled every 5 years. I borrow $5M so I can spend $500k/year for 10 years, and I’m carrying a $6M note - and my portfolio is $80M. I keel over and my heirs get $74M that I was never taxed on.
Now show us the justification where its 100% legal for politicians to do insider trading but an average consumer could spend life in prison for doing the same
It's not justifiable and should be illegal. However, there's a difference between insider trading and trading with public knowledge. The problem can lie in determining what's insider knowledge and what's publicly available knowledge.
In 2020, plenty of people could have acted on the assumption that pharmaceutical stocks would rise significantly once covid hit the news cycle.
There are plenty of people in Congress (legislators and staff), who are our were just regular people. They have 401k's, 529's, IRA's, mutual funds, etc. We can't make simply investments or owning stocks illegal for them.
Money. And the ability to give that money to those that look away
it's not legal for politicians to do insider trading. Insider trading laws apply to everyone. Do you care to cite your reference that politicians are exempt from inside trading laws?
Nan.. Pel... did it.
Thank you for your research. I find your videos are well done. RIght now I'm keeping an eye on Eledator
This video is a PERFECT example of the economic illiteracy of PBS.
Example 1: Why is there a "step up" in basis on inherited stock?
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It's true that there is a step up in basis for inherited stock that applies to the inheritor's capital gains. But it's untrue that the step up isn't taxed (as the authors of this video either mistakenly or intentionally forget to mention). The step up in basis is taxed at the inheritance tax rate of 40% for the federal government alone. That 40% tax is paid on both the REAL increase in the value of the stock and the INFLATION driven increase. The inheritor pays lots of taxes even on inflation which massively enriched government to the detriment of citizens.
Why is that done? First, because a significant portion of the NOMINAL gain on a stock results from inflation. Inflation enriches government coming and going. People shouldn't be taxed for inflation which is why there is indexing on federal income tax. Second, there is a record keeping issue. Let's say, my Aunt Mini bought some stock in 1975. She passes away in 2025 and leaves it to me. For me to pay the tax on the gain, I would have to try and find her records from fifty years ago to determine what she paid for the stock. That would be a nightmare for taxpayers and even for the IRS.
Example 2: So called "tax loss harvesting".
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Let's say I invest in a factory that will last ten years. The proposition is that I will invest USD 20 MM and I will earn a profit of USD 50 million. My tax rate is about 50% (considering federal, state, local, and other taxes). So I pay USD 25 million in taxes. I would net USD USD MM leaving me with a 20% gain.
But here's the trick our friends from PBS (government funded) would like to use to get a free tax hike. Taxes are paid on an annual basis.
So in years one and two, while building the factory, I invested USD 10 MM and gained no revenue. I lost USD 10 MM each year, although I was hiring people, buying things, and helping the economy. Now my factory goes into operation. But for the first three operational years (years 3, 4, 5) I lose money. In years six through ten I make a fortune in profits. But those profits were only possible because of my investment and losses in the first five years.
The folks at PBS want to tax my on only my profits, ignoring my investments, costs, and losses. They won't let me reduce my profit by the USD 20 MM I invested or the USD 30 million in operating losses I took while getting the factory up to speed. They want to tax me at 50% on USD 100 MM. That is they are taxing me not only on my profits. But they're also taxing me on the amount I invested, my costs, and my losses. That is they want USD 50 MM in taxes. They want ALL THE PROFIT for government. THEY ARE GREEDY.
Here's the question. Would you invest (and risk) USD 20 MM just to hand over the all the profits to government? Neither would anyone else. The result would be no investment, no jobs, and no taxes paid. The effect of what PBS is suggesting was tried in the 1970s under Jimmy Carter. The stagflation that resulted was so bad that even liberal states like Massachusetts and New York voted to re-elect Ronald Reagan after he corrected the policies PBS is pushing.
Example 3: "Tax havens."
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"Tax havens" is the term smug leftists use to describe jurisdictions that don't tax their citizens into economic oblivion.
When you go to shop, you look for a store offering the merchandise you want at the lowest price. Stores with low prices are able to do so because they are efficient in how they spend their money. The smug leftists in this video would probably accuse you of choosing a "retail haven" if you shop at Target rather than Macy's.
This exposes the thinking of our smug leftist friends. They criticize states such as Texas, Washington, and Florida for having low taxes without even looking at how well those states are carrying out the tasks of government for their citizens. THEIR PREMISE IS THAT HIGHER TAXES ARE ALWAYS BETTER. To them the happiness or well being of the citizens counts for nothing. All that matters is the imposition of confiscatory taxes.
I see leftists on campus all the time. The two presenters have the same smugness as those on campus.
Well stated.
There was a crucial detail missing from this video. Estate taxes. Anything inherited over 13.6 mil will owe estate taxes. This is actually decreasing back to 5.49 mil for tax year 2026. So basically, dying is only a "loophole" for the rich not the ultra rich.
There are also some pretty crucial details about hobby vs. business losses that got left out too. If a business has losses too many years in a row, the IRS can rule that it's a hobby and disallow the losses. There's more rules that determine what counts and what doesn't, but it's not a free for all like they describe.
@@shelbygardner1193right but isnt that the reason they sell such businesses? The constant exchange means such record cannot be established. That or they simply pheonix the business
theyll just put it in an irrevocable trust
@@sirdiealot53 Assets placed in an irrevocable trust are subject to lifetime gift limits. Gifts during your lifetime reduce the amount available at death for Estate tax exemption.
If you save enough taxes during your entire 80 year life, you can make back the estate tax in as little as 10 years, if your investments are good. The hard part is actually ignorant heirs, that blow all the money on crap, instead of earning back the estate tax losses.
They need to have middle-class tax loopholes. Like tax-free savings accounts for buying houses or cars.
They actually have that here in Australia. It doesn't help 😅
Yea fak the lower class, loop holes for everyone except the poor
Canada have it for houses
it exists, its called negative gearing in Australia lol, could be something else in other parts of the world. It's not perfect as it causes a certain type of behaviour and could blow up if uncertain times occur and the economy moves out of its normal band range but for majority of the time it helps middle class dodge a significant amount of taxes
We need lower-class tax loopholes too
AI stocks will dominate 2024. Why I prefer NVIDIA is that they are better placed to maintain long term growth potential, and provide a platform for other AI companies. I know someone who has made more than 200% from NVIDIA. I'll also take these other recommendations you made.
If you lack knowledge about market investing tactics, get advice from a financial counselor.
Agreed! this is why I work with one. My $520k portfolio is well-matched for every market season yielding 85% rise from early last year to date. I and my advsor are working on more figures for this year. IMO, financial advisors are the most sought-after professionals after doctors.
I could really use the expertise of this advsors.
Her name is 'BONITA JEANETTE RODRIGUEZ’. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thanks for sharing. I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks
Some of these methods are truly for the rich. But some of them are used by normal, everyday Americans. Tax Loss Harvesting and Step-up Basis are not that uncommon.
Yeah especially since there is only a $3000/year carry over limit. The rich aren't benefitting that much from that
*Appreciate your videos! I’m 54 and younger generations should know there’s no shortcut to acquiring wealth, but there are ways to go about it. Fellow millionaires don’t tell the poor/middle class they need the knowledge of finance coaches to help build their wealth. If anyone here needs a good coach, here’s it..*
Elizabeth Greenhunts
get to her with the name
These billionaires which I am not one of them but they worked hard getting where they are they did not need to use this superstition that video talks about to become a billionaires they have all kinds of antiques, heirlooms and many clothes that they don't wear anymore and it doesn't stop being rich they work hard they know where to invest their money in and what kind of strategy to use to make themselves rich so don't need to do this false teachings says to do.
It’s not supposed to be easy. Anyone who finds it easy is stupid.
The investor's goal is to seek value in a way that minimizes risk and maximizes reward.
That is fantastic! I'm eager to start investing even though I have no experience with it. Which tactics do you use?
Until their own emotions burn them, people downplay the value of counsel. A few summers back, after a protracted divorce, I needed a big push to help my firm survive. I searched for consultants with the right credentials and found the most qualified one. Despite inflation, he assisted me in increasing my reserve from $275k to $850k.
By hiring a financial counselor, you can increase your chances of making money in the stock market.
@6:20 No, losing money on a business is never a good thing. It would make zero sense to buy a business and lose $10M on it for the sake of saving $4M in taxes.
Step 1: Be a billionaire
feel like hiding money implies economic corruption.
the game was rigged from the start
@user-cl1rq1sg8m It's not a game, it's a massacre.
That's what happens when the game is "rules for thee, written by me"
It's not corruption if the rules completely allow for it to begin with. That's why the rules (laws) need to change
@@judgetwelve
I love when people complain about this, they leave out the fact that they live in a Democracy and this rule applies to everyone, even the homeless bum. And so there's nothing stopping everyone from using it, but essentially the rich behave like the students that get straight As in school and then they complain at them getting straight As, whilst they themselves are bringing in Fs or Ds for their own grades. Maybe get better financially educated and stop your whining, all this information is publicly available and there are thousands of RUclips finance channels explaining it, but nobody wants to do jack other than complain about their piss poor understanding of "loopholes".
And yeah it's a piss poor understanding of loopholes, because everything would be a loophole under their definitions use. Using your children under the EITC as a deduction to pay less taxes and get tax credits? Loophole. Using childcare and medical insurance payments to pay less taxes? Loophole. Using student loan debt and school costs to pay less taxes? Also a loophole. Every loophole they complain about the rich using, they also have access to use, this is not an exclusively "rich only" club.
The only difference between the rich and the poor is that the rich have more money to work with and the poor have less money to work with and so the compounding interest rates on poor people's wealth will be smaller than those of rich people. The poor can very much do "Buy, Borrow, Die", the poor can open up LLCs and use them as ways to lower their own taxes (I'm not gonna delve deeply into this), they can move to a different state to avoid taxes, the poor can do strategic sell offs of assets at a loss to pay less taxes. BUT THIS ALL REQUIRES EFFORT FROM YOU.
Using what income do they repay the loans in the "borrow"?
They might carry the loans indefinitely if the interest is say 2% and their portfolio grows by 6%. Also some of their investments might pay out dividends that they could use to pay down the loans. There are also situations that sometime arise with publicly traded companies that can result in a forced "sale" of their shares (often merger related) and associated taxes despite their best efforts not to voluntarily have a realization event - hopefully only a small portion of a portfolio is affected by this.
@@mikebarnes2294Thanks.
@@mikebarnes2294so they have to sell some stock to pay the loans?
Loopholes and dark pool trades make it feel like the market isn’t fair to regular investors. I started putting money into ETFs and bonds only after I had more funds to invest. Now, given my age and how complicated the market has become. I'm questioning if sticking with these investments is still the best strategy. It feels like diversification might just be limiting my returns instead of managing risk
I'm approaching retirement and having a financial advisor has been helpful. I started investing later than most, so relying on compound interest from index funds or bonds wasn’t enough for me. Despite that, I’ve managed to do well and am on track to retire with around $6 million
I'm currently reassessing my retirement portfolio and could use some guidance. How can I get in touch with your financial advisor?
I avoid specific recommendations since everyone's situation differs, however my experience working closely with Emily Ava Milligan over the years has been exceptional. You might find it worthwhile to see if she aligns with your needs
I looked for her name online and found her page. I emailed and made enquiries. Thanks for the help
You are not alone
Doesn’t seem quite right to tap the like button, since I hate the reality you’re exposing…but I appreciate you exposing it, so I did go ahead and tap.
Given the enormous influence the wealthy have on Congress, via lobbying and cultivating personal relationships, I’m not terribly hopeful any loopholes will be closed.
Taxes are so overly-complicated, it's ridiculous
Amen!
The vast majority of Americans can file a one page "EZ" form. (edit: I was wrong)
@@THE-X-Force The EZ form was discontinued in 2018. Although the regular 1040 form became a little simpler at the same time.
@@PrometheusMMIV Thanks for correcting me. I haven't personally filed in a long lonnng time. Seems crazy they got rid of it then .. I remember the guy in charge at the time saying it was going to be reduced to the size of a postcard. They even made mock-ups. I suppose I shouldn't be surprised.
More complicated means more people leave money behind
The "Loophole"
>Takes out a US$40 Billion loan from banks at 2% interest and uses their hundreds of billions in stock value as collateral
Average worker: *surprised Pikachu face*
Where did you get it's at 2%. Tbills average 5.5%
Student debt relief should not be allowed. Pay your debts.
Previous generations used to be parents by 18. Politicians now say 18 isn't old enough to decide to take a loan
just b aware that the otherwise illegal and usurios interest scheme and mis managment by student loan conglomerates is the only guarantee u get that your loan cant b paid off. even people putting in 20yrs of public service did not get loans paid.
nterest scheme
Money is not meant to control people rather it is meant to be put to work producing more money for you. You cannot build wealth without putting money in its rightful place.
You're correct!! I make a lot of money without relying on the government. Investing in stocks and digital currencies is beneficial at this moment.
Thanks for the advice! I'm new to financial planning and wasn't sure where to start. Any tips on finding a reliable financial adviser or resource to guide beginners?
As a beginner, it's essential for you to have a mentor that is verified by finra and SEC to keep you accountable. I'm guided by a widely known financial consultant Stacey Macken
Stacey demonstrates an excellent understanding of market trends, making well informed decisions that leads to consistent profit
I remember giving her my first savings $20000 and she opened a brokerage account for me it turned out to be the best thing that ever happened to me.
This guy went from Ned Flanders’s to Tame Impala. Living life at the extremes fr
looks horrible
a glowup from all that PBS cheddar! 😎
what do you mean, it's the same guy that appears at 1:01?
I thought they had changed it, cause for real it ain't anything like the one I remembered
😂😂😂
I thought she got a new husband
You definitely have my sub. This content is next level. For me Eledator was the turning point. Please keep doing what you do and keep being you, love it.
Removing stepped up basis makes a lot more sense than taxing unrealized gains
THIS THIS THIS. Taxing unrealized gains is totally idiotic, and this step up is the real loophole
They already did that.
Anything tucked away in an irrevocable trust and kept out of the estate doesn't get a step up in basis.
Anything that gets a step up in basis is counted against your estate tax exemption or hit with an estate tax if the estate is big enough.
Definitely need to tackle the no limits "trickle down" mafia aristocracy that shouldn't exist
@@ryann8348 You're absolutely not seeing the bigger picture. If you have 200K in stocks it might feel unfair to pay anything out of it, but this goes beyond just YOU! You are may feel that you "worked hard" to "earn" the ability to invest, but you fail to recognize how much you have been given as a matter of course. It is only the extreme outlier who have 40K in investments or more and were not given opportunity and resources beyond the wildest dreams of any real worker.
Relative. Neither of them makes much sense.
You keep calling it capital gains BEFORE the investment is sold. That is incorrect - it is unrealized gains. It cannot be taxed because it has no “real” value until it is sold.
true
7:35 such a stupid idea - is the government going to give them money for their unrealized losses as well? And for people who think not my problem since i dont have a 100mil realize that normal income taxes started off as only for the super wealthy and now we all have to pay it.
it's just an all around poorly researched video. PBS Should be ashamed to be associated with this video.
Class warfare as the government gets bigger and bigger…this is just propaganda
I'm interested in investing, but I'm not sure where to start. Do you have any advice or contacts who can help me out?
Investing can be complex, so it's smart to get professional guidance when building your financial portfolio.
It's a great idea to have a conversation with financial advisors like Naomi Dean to reshape your portfolio.
I spread out my $25k portfolio across various markets to diversify my investments.
That's awesome! I ended up making a net profit of about $115k by investing in high dividend yield stocks, ETFs, and equity.
Naomi Dean stands out from other brokers because of her realistic approach, unlike those who often set unattainable targets and fail to deliver. She's truly unique!
Beautifully done you guys. I love all your videos. I like the fact that you don’t post too many videos and take time to make very valuable ones.
So move to Florida got it
@@Life_42 Why is that? I'm curious the advantages of Miami and/or Florida?
Tennessee is better but your choice.
Not unless you want to ensure your house or not die from a hurricane
or Texas or Nevada. Probably worthwhile to note that because a state doesn't tax income or capital gains does not automatically make them a no-tax state; whatever is taxed will be taxed greatly or government services and support will reflect the lack of revenue. Property and sales taxes get used to make up the differences, typically. Florida gets an extra whammy with hurricanes, so now one cannot afford to insure real property and dwellings in an otherwise strong real estate market.
0:41 You could've stopped at "The ultra wealthy don't earn much of their income."
@mguntbecause they own assets that earn money.
@mgunt Because rich people are criminals. You rob a bank? You're a criminal! A bank robs the government and the economy? Perfectly "legal" apparently. "Stealing" food from a convenience store is a "crime" but stealing millions and billions from people's paychecks and the US economy? Acceptable apparently 🤷🏾♀🤷🏾♀😒😒
@mgunt What's in the self interest of the average to below average masses out there? To find someone else to disproportionately pay for it?
@mguntAlistair meant that regardless of how their income comes about, it isn't actually earned. No person's labor is worth billions, billionaires existing is in itself absurd.
You are not understanding what "earned" means in this context.
this is sad tbh
My husband and I were fortunate enough to be able to pay off our mortgage early. We were both still working, and took the payment amount that we had been using to pay off our mortgage faster and we put it straight into investments. We were able to retire early because of almost 7 years of putting away what would have been our mortgage payment as well as maxing out our 401K/403B plans. Thankfully we were taught by both of our parents the value of living within our means. Thank you for your advice. I know it will help people. we are interested in investments that could set me up for retirement , I mean I've heard of people that netted hundreds of thousands during these crash, I listened to someone on a podcast who earned over $650K in less than a year, what's the strategy behind such returns?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from a market analyst, significantly growing my account to nearly a million. Strategically withdrawing profits just before the market correction, I'm now seizing buying opportunities once again.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
Leicia Zavala Perkins is the licensed advisor I use.Just research the name. You'd find necessary details to work with to set up an appointment
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
2nd part of my comments that seem to get deleted...
On offshore accounts.
Most people follow the law, even if they're opening accounts in other countries. The assumption is that they're trying to 'hide' their wealth, but in reality, there are multiple reasons for opening accounts in other countries. Most people doing this are following the law, but people invested in this narrative assume it's only to 'hide' their wealth. The penalty for doing anything illegal is steep. Very few people risk it.
As for all the legal loopholes, the key work here is legal. They're not 'hiding' their wealth. They're following the law. If anyone is to 'blame', it's legislators that pass 'flawed' laws.
In the borrow, buy, die strategy there is one thing I am unclear on. When they die, their estate has to cover the loans and probably have to sell assets to do so. Are the assets sold by the estate to cover the loans also on a stepped up basis, or do they pay the full capital gains tax?
well if the next of kin inherits the investments at 0 increased valuation as mentioned, they can sell part of them to repay the loans without having to pay any taxes since it was considered to have 0 appreciation in value once it went to the new owner.
Yeah they sell the stepped up assets
Also, loans, etc., that would get settled in estate gains figures are usually taken out by a shell corp, not the person themselves.
We would use life insurance to cover the loans when we die
Thanks for this thread.
We getting jailed for tax evasion with this one 🗣️🔥🗣️🔥🗣️🔥🗣️
PBS is economically illiterate. What scares me is that video like this may be presented to the pupils in government schools. I missed an example in my comments below.
Example 4: Taxation of expected FUTURE profits.
---
Let's say the ACME company issues 100 shares of stock. In a given year it earns a profit of USD 100K. The government has two ways of collecting income tax on this gain. It could ...
(1) Impose an income tax on the company
e.g. 50% of USD 100k = USD 50k tax
(2) Impose a tax on the dividends paid to the shareholders
e.g. 50% of USD 1,000 per share times 100 shares = USD 50k tax
Here, government was really tricky. First it imposed income taxes on corporations. Later it imposed taxes on dividends. THIS IS DOUBLE TAXATION. The same income is being taxed twice.
But now PBS wants to go further. A share price is the present value of all EXPECTED future profits. So to tax unrealized gains in share price, the government wants a share of EXPECTED future profits that haven't even been earned yet.
That would be like the government ESTIMATING that, in your lifetime, you'll earn USD 2 million and demanding that you pay taxes on that today.
So if $160 billion more was collected from "the rich," we would have a balanced budget? No.
It would be closer to balanced though. That represents about 10% of the current deficit.
But how do they pay back the collateral loan? Do they inherit the debt to their heirs too?
Depends what you use the loan for but usually there is a mix of loans, elon did it to buy twitter, he expects twitter to make money and essentially pay back the loan through twitters (X's) business revenue. What this means is he keeps his tesla shares, his new business (X) pays back that debt for him and at the same time it grows in value, so debts are paid off through reinvesting into higher earning assets. Most of these guys know how much of the loan to use for endulgence and how much to use for business. Also, in all honesty when you have 10's of millions of dollars through successful business earnings, you aren't dumb enough to blow it on a private yacht that costs 10's of millions of dollars. You usually get a house worth a million, maybe a car and a few of lifes luxuries. Then you would take some cash out against your shares at a low rate of 3% - 6% depending on your relationship with the bank and invest the rest in high yeilding funds which returns more than that. Your income from the investments can then pay for the 1-3 million you borrowed for consumtive uses like your car and house. So say you borrowed at 6% against your shares for 3 million for your house, then borrowed another 6% interest and take out 7 million to reinvest it in something that returns 12%, could be a new business, could be into the financial markets, then those assets grow and part of those returns goes back to pay back your debts. You use leverage to get richer without having to pay taxes at all. Then you rinse and repeat.
The loan is usually taken out at a cheaper interest rate than the inflation rate. Meaning the companys' free growth pays on the debt.
I was wondering the same thing.
@@jaywyse7150I don’t understand. Can you explain it differently please?
@@VideoSiteAccess The investor is a great credit risk, always pays the bill on time and gets best interest rate (the lender may do other, more profitable business with the investor for other reasons, too), say 2%. The investment that secures the loan is making 8%. After the loan interest the investor is still making a return of 6% and the lender, getting their interest payment as contracted, have no reason to call the loan for final payment - it's a perpetual source of secure income. One borrows incrementally against the collateral, say 5% or so every year.
Thanks for the tips. It is the duty of a person to legally minimize their taxes. College loan forgiveness is just one example why paying tax is bad.
6:30 when those companies lose money, it isn't a good thing for them. That's a dumb statement. If you lose $100k from your business, you don't pay $100k less taxes. You pay, at most, like $50k less. That's still a net loss of $50k.
Putting well-earned money into the stock market can be over emphasized for first-time investors, unlike a bank where interest is sure thing! Well, basically times are uncertain, the market is out of control, and banks are gradually failing. I am working on a ballpark estimate of $5M for retirement, and I have a good 6-figure loaded up for this, could there be any opportunity for a boomer like me? I'm nearly 60.
If you're new to investing or don't have much time, it's best to get advice from an expert. Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
It's weird how much the male host changed, definetly prefered the mustache one
Skinny long hair makes him look skinny skinny. Long hair long face long torso. No balance for the camera.
@@yorbalindasonscreams hippie 😂
I enjoy the Two Cents segments so much!
The initial statement of the irs estimating that wealthy are skipping out on $160B a year in taxes implies that they are doing so illegally. Then the video walks through both legal and illegal ways in which wealthly people may avoid paying taxes with the same tone of "the wealthy are cheats" and never clarifying how much of that $160B number is attributed to illegal or legal means of tax avoidance. This feels borderline "misinformation" to me.
Also the buy, borrow, die segment implies that every wealthy person who borrow large sums of money is doing it solely to avoid taxes and never discusses other reasons they may have, like maintaining voting control of their company, or just betting that their equity will have a higher rate of return than the interest rate of the loan
These topics should be learned in school.
In these 8-9 minutes you guys told us way more valuable things that we can get in one year of economics in school lol
Regarding the "Buy, Borrow, Die?, If someone takes out a loan on their investment, but dont sell their stock, how do they make payments on the loan to pay it back?
Refinance. I.e. borrow a bigger loan to pay off the old one.
The investment could pay out dividends which could be used to make payments. Also I've heard its worth it to carry these loans since their interest rates are lower than the long-term expected return on a diversified portfolio.
@@fishroy1997 doesn’t sound sustainable unless you own large assets right?
@@mikebarnes2294 “carry” meaning to have the loan vs an investment account?
@@mikebarnes2294Thanks for your reply.
Can confirm, these financial and legal tools are available to everyone, but you have to have the assets and proper structures first before you can benefit from the 400+ deductions available to business owners and real estate investors.
That Step up in Basis rule is astonishingly terrible. Here in Canada the capital gains are considered realized at death and the estate has to pay the taxes before distributing to the heirs (except to a spouse - things can be transferred directly to a spouse but the cost basis doesn't change). It makes for messy planning when someone wants to pass down the family cottage, but at least the taxes get paid.
Getting rid of the basis step-up probably wouldn't be constitutional in the US anyway. And any party supporting it would pretty much instantly hemorrhage voters in retiree states like Arizona or Florida. Old folks are not going to vote for someone who wants to get in the way of them leaving their assets to their kids. Young people may support that stuff (while they are young) but old people definitely do not. So you can pretty much write this one off as a policy wonk's pipe dream.
Isn't it something like 50% of the capital gain? I just saw something from The Plain Bagel that it may go higher. My dad is 92 has a condo and cottage both of which have gone way up in value thanks to NS real estate so not sure how things will work out tax wise.
This video is a little bit misleading, because they don't touch on estate taxes, which are similar to what you described. The heirs don't pay tax, but the estate certainly does.
@@shelbygardner1193 I did check that Plain Bagel vid. The tax would be now around 66% of the gain taxed at the estates rate but IDK. Sounds like there’s also an exclusion amount. Hoping when things do happen we can keep the cottage in the family.
I don't know what the exclusion amount is in Canada, but there's generally at least something. The US federal exclusion is pretty high, but a lot of the states' are smaller.
Help me understand.. when you take out a loan.. you have to make payments.. you are also accruing interest so you'll owe money.. how do they get by this? And not owe the money if they can't pay it off since all their wealth is invested?
Yeah.. 🫤
Fantastic, how we keep hearing that there is no public money for anything while this happens legally
I literally just Googled this topic yesterday! Thanks!
The thing with regulations is that the rich always find the way to not pay taxes. They have an army of lawyers and financial advisors to help them continue doing that.
Everyone can afford a CPA. I have used one for my business as I grew from 40 to 80 k gross. Don't eat out for a few meals.
@mgunt I paid 1k last year to my CPA and I am not rich. I could afford that even when I was making less. Do you make less than like 30-35k a year? I mean at that point you're not really paying a ton of taxes anyway.
@@jrg305 i’m not complaining about my taxes. I’m just saying that regulators are always a step back, while the rich are a step ahead.
Guys stop defending the rich. You will not inherit their fortune by posting comments for them on social media.
You can too if you hire a good accountant. The US tax code is the US tax code. You can use the same deductions as the rich do.
Can you do a video digging more into the Buy Borrow Die strategy, particularly on the Borrow part. I want to understand how the rich are able to borrow long term. Example, Elon took out $13 billion in loans at 4:30 in video, my question is how does he pay down the interest and principle on such a loan?
5:21 graphic on the right is the 2nd T-Shirt I need from this channel
Still waiting for the 1st one to drop (IRS's "Whatevs. Pay me") 😂
How do they pay the loans without selling investments??
That’s what I want to know.
How do they pay back the loans? Do they just take out a loan to pay the loan? Does it get paid when they die???
Exactly! That’s what I’d like to know.
I have followed you both for years. I get a big joy when I see y’all post a video. Much love ❤
Love how the income tax at the beginning was represented by like 10% of the cheque flying away 😄Americans don't know how good they have it tax-wise.
I pay like 30% in taxes and I don’t make much money at all. What are you talking about?
Wealthy people invest their money and generate jobs, good and services for us all. They are responsible for generating tax revenues through employee payroll taxes, sales taxes, inventory taxes, business income taxes, capital gains taxes, service taxes, etc etc etc. The jobs they create and the salaries paid generate income taxes, sales taxes, property taxes, etc etc etc. The goods and services they buy from suppliers create income for those companies and the process starts over again with their tax obligations and employees paying all kind of taxes. All of this is made possible by incentives offered through the tax system to risk their money on start up businesses, investments and ventures. No matter how much you want to feel like it’s unfair, remember that that paycheck you get started with someone risking their own wealth to provide the job you have. The two cents analogy in this video is biased and flawed. Check the data, the wealthiest 1% pay 43% of taxes while making 26% of total personal income. Most companies are struggling to make a 2% to 5% net profit after all the overhead necessary to run a business. And that overhead includes huge taxes from every part of business.
Question: How many of these things can we (as in, normal Americans making, say, sub-100k/year) do? Like, theoretically, I assume we could do most. But practically, why aren't we doing these things? Is it upfront costs? Is it purely education/knowing about these things? Is it a time factor? Are there other barriers to entry that I'm not qualified to even think about/realize? Is the IRS better able to see when people with less money jump/miss a loophole because the finances are more straight-forward (thus an audit is much easier)?
Depending on the opportunity in question there could be a mix of many of those things.
For example "Buy, Borrow and Die" only works well at a large scale as you need to be able to borrow money secured by a LARGE investment portfolio at very low interest rates (say something less than 3%) in order to have your portfolio continue to grow on average by more than the loan rate. Average people generally cannot borrow at such low rates. If you look at the publicly available margin account rates posted online by major brokers on smaller loan amounts these rates can be over 13% on a margin loan of less than $25K - this is over twice the expected 6% long-term average return you can expect on a diversified portfolio over the long run.
If you want to save additional money for your retirement (or work somewhere that does not offer a 401(k) or similar type of plan) you can put money into in an Individual Retirement Account. This can be a great way to either defer or avoid taxes on investment growth that will support you in your retirement. One problem with this is YOU need to take the initiative to set this up and fund it appropriately. Some people (generally once this account has grown a decent amount) move this money to specialized custodians that enable investment in things beyond stocks, bonds and other publicly traded paper investments. However most people don't know you can do this and these custodians have significantly higher fees than the mainstream ones most of us are familiar with. This can be really good depending on the types of opportunities you might have access to that would benefit from your accumulated retirement funds.
Depending on the type of health insurance your employer offers (and that you select during open enrollment) you might be able to put money into a Health Savings Account. A LOT of people either confuse this with the more restrictive "Flexible" Spending Account or don't understand the long-term value of this account and either don't use it or only put enough in to cover expected out-of-pocket costs. If you have a qualifying high-deductible health plan it is best to contribute the maximum allowed to this account (ideally more than your expected expenses) and once you have built up a balance over a few years begin investing these funds for long-term growth. This is a great way to supplement your retirement savings as a large part of expected retirement expenses are medical in nature. At the barest minimum you can reimburse yourself (tax-free) your Medicare part B premium.
Once you have utilized employer sponsored retirement accounts, IRA's and (if eligible) HSA's you may need to invest additional money using a taxable account. In this account any interest and dividends earned are taxable as earned and if you realize capital gains from selling investments those are taxable as well - though as mentioned these gains can be offset by also selling investments that have gone down in value as well. Key to this is you have to know about it and be cognizant enough to check your account right after a large market drop to see if your taxable account has any losses to harvest.
Above all these ideas all require that you earn more money than you need to live on and are able to put some of the additional funds towards investments that will grow in value long-term. If you live "paycheck-to-paycheck" none of these ideas will be that helpful for you. Upfront costs, time and learning can all be a part of why some people are able to make tax reduction opportunities work for them and others cannot.
By the way the foreign accounts mentioned are not very useful for most Americans as the income they earned is legally just as taxable as that earned by an American based account. These also have to be disclosed on both your annual tax return and a separate filing known as a FinCen Form 114. These generally only make sense if you are actually living in another country where it makes sense to have a local bank account to manage your money and easily pay your local expenses. In some countries there can be an "asset protection" benefit to having money there, but that generally requires a trust and not just a personal account.
@@mikebarnes2294 Thank you for taking the time and effort to type all of this out for me. I really appreciate it.
People want to keep their money. What an idea
Can someone explain this to me? If you borrow a loan using your investments as collateral. Don’t you still have to pay off the loan? I’m confused on why this is a strategy.
It's almost like is not even profitable to be a worker. Workers should do some challenge called "not going to work anymore" it would be hilarious.
Look, anyone can do a loophole easily. Take out a HELOC loan on your home. Or refinance a mortgage on your home or investment property. The cash out is tax free.
how do you pay those loans? dont you eventually need to sell some assets?
That’s what I’m trying to understand.
When you die with debt, the investments will be sold to pay the debt, and incurred taxes.
Great episode. The tax laws are confusing so that less people understand them. A Roth IRA or Roth 401k is a great way for the middle class to avoid paying taxes in the future on any gains that their investments make.
Ya gotta pay taxes when you pull that money at 76 😅
@@BrooklynBaby100that is normal iras not Roth. Roth is pre tax so no tax in future.
@@richardmenz3257 Still get taxed before contributing. You either get taxed in the front or taxed in the back 🍑 🍆
@@BrooklynBaby100 yeah but looking at the rate now taxes prob be higher later so locking in lower now is nice. But if gotcha. I mainly use Roth as a 2nd emergency fund. I have 28k in it that I can withdraw without penalties which you cannot do with normal IRA.
@@BrooklynBaby100The growth/gains is Tax Free in a Roth IRA & Roth 401K. In a Traditional IRA & Pre Tax 401K you pay taxes on the growth/gains.
New law that just went into effect is closing one or more of those loopholes. ' Corporate Transparency Act ', no more shell companies. Well can use a shell company, but each one must have a unique address down to the room in a building and a face+name that is running it which include all legal documents (so no more fake person running a shell company). So places like delaware can no longer stack 100's off thousands of businesses to a single street address.
They should be able to hide they’re money and so should you , no one should have to pay banker there’s income it’s not the American people fault that the government borrowed money from devil worships that’s on you I’m not paying for wars and sex trafficking I refuse just say have blessed day
You two can talk how our government wasting our tax next.
Ukraine war. Funding Israel massacre. Funding our illegals that affect congress representation. Funding pfizer and moderna under "emergency" for gene therapies with high risk of clotting and myocarditis for something that kills 0.1%.
Not funding American veterans while funding other countries wars.
No no, it's spent on "programs and infrastructure" totally never wasted! Please watch PBS... 😂
@@jrg305 "Funding our illegals "
Knowledge and truth will set you free for real
If you can’t beat em, join em! I just tuned in to learn how to avoid taxes when I grow my income.
I've been watching Two Cents for a good while now and I found this episode the most interesting so far!!
lol do you really think the government would be responsible with that $160B? They’re over 30 trillion in debt. It would last less than 10 days and nothing would improve.
I paid 1.09% two years ago, and 4.9% this past year. Most poor pay really low if any taxes..
i dont get how financing lifestyle with loans dodges taxes, you still have to payback loans by selling investments eventually. I get that you want the investment to grow at a higher rate of return than the loan but im missing something here.
Ditto. Trying to get an answer myself.
I'm not sure I trust a video that gets "capitol" gains spelled wrong at 3:09. Are we really taxing state capitols now?
Why do they only suggest solutions from progressive or liberal politicians? Plenty of conservatives and libertarians are in favor of having a flat income tax across the board, including taxing capital gains as ordinary income. That would also close the loopholes.
The government set these rules, so it’s silly not to follow them if it saves you money.
Let's be honest - no one in their right mind wants to pay more taxes than they are owed. The real problem is the tax code. If I follow the tax code and can legally get away with paying fewer taxes, why wouldn't I? Not like Washington will spend my money more responsibly.
so informative!!! thank you for all your work Philip and Julia! 🤯
Thank god this hyper-leftist-hate-America explanation is here. I was worried I wouldn’t have anybody to point at and laugh.
Yeah, this is socialist propaganda
I am trying to contradict 7:00 - 7:17 but my post was deleted twice with links regarding differing tax rates between different classes. Generally, the lower your income, the lower your tax rate. If you have young children, the lower you tax rate, but the financial burden is still greater (raising children expenses etc). "As household income increases, average income tax rates rise" -taxfoundation
this must have taken a lot of work. good job
Oh so that's why I have to declare that I'm not a US resident on local bank forms when I'm on the other side of the world.
I agree with some of the things you stated. I put in 20k into various assets late last year and flipped into six figures within a few months and still going. I’ve always been an advocate of investing because it has been rather rewarding. I hope to attain financial freedom soon. One more thing, keep up the good work guys.
It’s not rocket science. As I said previously, I got into stocks, index funds, and REITs, myself but wasn't getting the results I wanted the first couple of months. Got tired of losing and decided to seek mentorship from Jonas Herman, a certified fiduciary who helps oversee my investments.
Can you introduce me to Jonas? I'd love to learn more about his service.
Will you guys behind the bots quit talking to yourselves??. 😂 This stuff does not work on people because you don't talk like normal human beings. You talk like advertisers trying to sell stuff. And you insist on using and giving people names.
Nobody runs around blurting out people's full name like that.
Yall literally look like walking virtual commercials.
"oh, I'm interested in investing? Does anyone know who I can contact"
"I personally use john doe, he made me 50k in 3 weeks! Contact him"
Sounds like a tide laundry commercial. Get your sheets whiter than white with tide ultra clean. 😂
Good lord, the lack of creativity...
Leviticus 23:31
Hermanw jonas that’s his gmail okay
Realizing that buying twitter was not only controlling the narrative, but also a big ass tax write off with extra steps.
The house always wins.
The system was designed to favour the rich, these loopholes are designed to further aid them, With inflation at 3.70%, I'm looking to enter the market now and ride it out as the economy improves. I'm putting together a $350,000 portfolio with Stocks and ETF's. Do you have any recommendations with solid cash flow?
Knowledgeable Investors know where and how to put money during a crisis in order to reduce risk and maximize returns. See a market strategist with experience if you are unable to manage these market conditions.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850K.
Great gains! Can you share your advisor details? I'm gaining more cash flow from my job and want to invest in stocks and alternative assets to build wealth.
Great gains! Can you share your CFP details? I'm gaining more cash flow from my job and want to invest in stocks and alternative assets to build wealth.
'Amber Dawn Brummit' is the licensed advisor I use. Just research the name. You’d find necessary details to work with to set up an appointment.
Stepped-up basis only benefits working class people to top 1% rich people, not the ultra-wealthy. The whole purpose of stepped up basis is to avoid double taxation because you pay a 40% estate tax on any estate above $14.61 million ($13.61M exemption + $1M for max tax bracket). So paying estate tax and capital gains tax would be a double tax. For the billionaires, a 20% capital gains tax is much better than a 40% estate tax (which taxes both gains and what you put in), so they set up dynasty trusts and other entities to avoid estate taxes (but they don't benefit from stepped-up basis either). The only people who benefit are people who pass down less than the $13.61M exemption since they get pay no estate taxes and benefit from stepped-up basis. If you all remove stepped-up basis, you're only increasing taxes for yourselves on the house and stocks you'll inherit, while the billionaires will be unaffected.
Reminds me of "The Tax Poem."
"Tax his land, Tax his bed, Tax the table at which he's fed.
Tax his tractor, Tax his mule, Teach him taxes are the rule.
Tax his work, Tax his pay, He works for peanuts anyway!
Tax his cow, Tax his goat, Tax his pants, Tax his coat. Tax his ties, Tax his shirt, Tax his work, Tax his dirt.
Tax his tobacco, Tax his drink, Tax him if he tries to think.
Tax his cigars, Tax his beers, If he cries tax his tears.
Tax his car, Tax his gas, Find other ways to tax his @ss.
Tax all he has, Then let him know, That you won't be done till he has no dough.
When he screams and hollers, Then tax him some more, Tax him till he's good and sore.
Then tax his coffin, Tax his grave, Tax the sod in which he's laid.
Put these words upon his tomb, 'Taxes drove me to my doom...'
When he's gone, do not relax, it's time to apply the inheritance tax."
Not quite true, let’s use Warren Buffett as an example might not pay tax on his “Berkshire stock” investment unless he sells it or gets a dividend, but Berkshire (eg the company Buffett owns represented by that stock) itself pays a lot of tax on the investment earnings.
So often super rich people own companies that pay a lot of tax, even though they themselves pay much less tax because the will only sell small amounts of stock to fund their lifestyle, but the companies do pay company tax.
How to be smart with your money. ❤