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@@modestassparvelis8304yeah, I would think they would have to pay the 20 percent capital gains when they sell shares to pay the loan. That's less than normal taxes probably but still.
@@modestassparvelis8304yeah, I think you are right. The bank gives money but he needs to pay it back. So he will have to sell his shares and pay CGT on it and then pay the bank…
These laws and loopholes need to be closed somehow. The poor are basically paying taxes for public services, which the rich also use. Things need to change. It seems a bit unfair.
The poor don't pay for hardly anything. A little at the pump like everyone Sales tax like some people (i don't because im in a state without it) But most people with an income get a refund that is larger than what was deducted. The rich don't pay income taxes but dont be so obtuse, the to 1% pay for most of what the government spends. Turn off the fake news and open a book, tik tok isn't a source for an economics lesson
Elon literally paid 10 billion in taxes lol, when you sell the stocks you gotta pay capital gains.. And what we need is lower taxes and less government spending, not more taxes
Yeah man I wish I had known this piece of advice that definitely applies to me as someone who absolutely has billions in stock in a company I am the CEO of
He is clueless. He thinks it's cheaper to pay 5 percent interest every year, than 20 percent capital gains tax just once. And not just that, you have to eventually pay back the loan, and pay the 20 percent capital gains tax to do that.
Idk if what he says actually works, but he low key seems like the only genuine guy from all the people who give "financial advice" (another word for pulling you into a pyramid scheme)
This is why Mark is so much better than other finance youtubers / tiktokers, he actually explains and tells you why and how to make money. You're the goat man 🐐
@@matthewr6572 Did he though? Because Elon did pay $11 billion in tax in 2021 when he sold his Tesla stock. And this Mark has definitely not explained what happens when that loan is due, it needs to repaid at some point - how will that happen? By selling stock, which will be taxed.
Ask yourself. Why would the Rich borrow money on 8% interest when they eventually have to pay back the Loan with Interest with Income. Thereby paying both Tax and Interest on the Loan. Mark is preying on naive people on the internet. Do *NOT* believe in everything you see on the internet. These RUclipsrs make money on the videos, not by actually being successful with their own financial advice.
1) How can he pay debt/interest then? 2) Does he have to sell the stock for cash and pay debt/interest? 3) Once he sells the stock, does he have to pay income tax by selling the stock?
The key is borrow against, so it's not exactly money, rather stocks. Stocks is not money, it's ownership, so he is "selling" a part of his ownership to money which he can use it for anything and everything. He interest by stocks which is not taxable because it's literally his company. So he's making himself the ruler instead of the one who's printing the money which is the gov. He basically has his own government by Tesla. edit: If he wouldn't know in advance that his company will be successful, because he has immense data, technology and he's really just smart af, he wouldn't borrow. He's a genius planner when it comes to money and it's not even that hard to do if u are somewhat talented and experienced towards it. He has not to worry literally I suppose.
There's a book called Hidden Time Wealth, and it talks about how using some secret techniques, you can overcome procrastination and accomplish anything in life. It's not just a bunch of empty promises; it's the real deal.
It's wild that we live in a system where billionaires can avoid taxes through loopholes and stock buybacks while their wealth grows exponentially just by holding stock options. Meanwhile, their employees, the ones actually keeping the business running, struggle on minimum wage. The inequality gap isn't just an accident-it's a feature of the system, designed to concentrate wealth at the top while the rest of us are left to fight over crumbs. It's not sustainable, and it shouldn't be acceptable.
@@Kevin_Fallenthe problem is it's not equal to work. No matter how much work lower class people put in it doesn't mean anything in a system meant to keep them down
@@Kevin_Fallen it’s extremely difficult to make it to being a billionaire no matter how hard or smart you work, I’m not saying everyone should have equal stuff but there shouldn’t be a system where the mega rich avoid taxes
It works in America maybe, but not everywhere. In the Netherlands you have to pay yourself a salary as CEO of your own company. Mandatory, so everyone is paying some income tax
Then do it.. oh wait you didn't make a business that contributes to society. You really missed the point of this whole video if you see this and still think that rich people don't pay taxes on their income.
There is nothing stopping the middle class from doing this, but it just makes no sense. If you take no salary, then you have to sell the stock anyway to repay the loan. The reason super rich people do this is because selling a lot of stock by a major owner (like Musk in his own Tesla) makes the shareholders suspect something might be wrong with the company, so they might sell as well, which could cause the overall stock price to go down. If your entire salary is based on the stock price, you really don’t want it going down. All it does is allow them to sell the stock at a much steadier pace
Thing is, they could theoretically pay back the current loan with yet another loan, thus resulting in a chain where there is no need to exercise stock options. Although, capital gains tax is usually lower than ordinary tax rates anyways, somewhere between 15-20% usually.
Nope, just keep taking out loans, borrowing against your assets. This is how large landlords do it, they simply refinance their properties (release equity) and live on that money which is tax free.
@@Bacrenfencing and then the market turns and the banks call the loans in as the valuation ratios are wrong, resulting in the sale of property and payment of tax, generally at the worst time in the property cycle
Thanks to that system, the rich gets richer, the poor gets poorer. That's why, zekat system is good for humanity. I give my zekat and other charity which is called sadaka regularly. It makes a difference in poor people's lives and also makes me happy.
And this is why we should tax assets including stocks at the point of it being used as collateral for a loan. The gains have effectively been realized and turned into usable cash.
But they still have to repay the loan? If he takes no salary, then he must sell the stock at some point to repay the bank, sold stock is taxed. And no, it’s not possible to avoid repaying the bank because they will take ownership of the stock that was put up as collateral for the loan, you must agree to that condition before you receive the money
@@Swatotastic maybe you borrow a million from the bank and pay that back from the money you borrowed, , so you only need 500k but borrow 1 mill, that gives you 500k to pay the loan back then when you think oh I have almost ran out of the 500k to pay it back you do the same.....its funny that all these channels like this say easy to make the money, how billionaire don't pay tax, but they never tell the viewers how it is paid back and the question gets asked by loads of people but does not get an answer
@@stehume while i’m sure that some banks wouldn’t be against providing an ultra high net worth client with multiple concurrent loans since the likelihood of the client going bankrupt is so tiny, i’d suppose that, in general, the bank wouldn’t let someone take out another loan until the previous one was repaid in full
@@Swatotastic I had the same thoughts tbh as I was writing it, but then did think well it in in Amarica so maybe thy do things different to here in the uk well when I have made my billions and not paying tax then I will make a RUclips video lol
That's pretty clever. If you can't avoid using money for personal use then use something that cannot be taxed not being money or valuables. I was exactly asking myself how can the holder of a big company get a ton of money out of it for personal use if he cannot pay himself that much. I thought of stocks but you'd have to sell them, but this is new to me. Good stuff.
No. You can just take out a new, bigger loan and pay off the old loan with some of the new loan. When you have that much in shares, the bank will never deny another loan. They have their security, so why should they not approve another loan?
I just watched The Platform, and the concept of that film is exactly how reality works between the rich and poor. The rich get to eat all the lovely prepped food first, leave scrape for the working class, and then the poor get absolutely nothing. Great film, I highly recommend it.
Yeah, i never understood that part. I guess id you invest the money you loan then you can pay back the interest with the gains? That's still taxed, but it's less tax than taking out a salary.
Business loan interest and payments are tax deductible, so one option is selling stock dividends to pay the loan payments, then basically having no taxes on your dividends because you had to spend them. You can also have some salary or income and essentially reduce or eliminate your taxable income by deducting the loan.
How do they repay the loans? Like if your paid in stocks and don’t get a salary. So you take a loan which will have a monthly payment attached to it. Wouldn’t you need to sell the sticks to pay the loan? So you paying taxes when you sell the stocks and your paying interest on the loan. The bank won’t just give you an infinite loan with no structured repayments. The only way this makes sense is if it’s used to gather capital for another profit producing asset. Like instead of selling the stocks and building an apartment complex. You get a collateralized loan against your stock value. Then pay the loan back with the rent from the apartment. But you’re still going to now have to pay taxes on the rent created. You’re just using one asset to pay for another. There is no way to just live if a loan and not pay taxes. You are saving the taxes it would have taken to liquidate the stocks to fund the project yourself. But literally anyone can get a loan like this. Lid you have equity in your house you can take a loan against it. and access the money without paying capital gains tax and selling your house. This is something anyone with any equity or ownership in any asset can do. But the loan has to be paid back, and taxes have to be paid when you liquidate assets to pay them. This could even happen to cover a settlement. Say you owe 10 million to someone and want to avoid having sheriffs come start taking all your stuff. And you have a business worth 30 million. You don’t want to sell your captial investments, or business entirely, and you don’t want them to come start stripping equipment and machines from your building or taking your building. You can go get a loan and pay the 10 million, then pay back the loan.
The better argument is if the capital gains when you pay off your loan is worth it. You have to pay back the loan somehow and for that you would liquidate your position. You will incur capital gains which may or not be equal to income tax in your country. But you will be paying interest plus capital gains to settle the transaction eventually.
I like your videos. But how to make it in Europe? In Netherlands, we have box 3 property tax for any shares or cash we process. Tax authority decides an average earning every year and charge 36% tax over it. How do European people get rich then? Other European countries have similar mechanisms, if not Box 3, there are some other wealth taxes.
@@rodnee2340 kinda, i don't think the new-dealers thought having politics and economy mixing together would lead to this, even though every one told them so
@@AliResool-k8z Ayn Rand understood this. The separation of the economy and state is the only way you get a truly free society. I'm not a complete Liberian. And Rand it definitely not my favourite author. But she definitely had some good points that are starting to make me rethink her work. Like her idea that monopolies are only possible because of state intervention and funding. All this is called socialism BTW. Ronald Reagan said 'the worst thing anyone can hear are words "I'm here from the government, I'm here to help."'
@@rodnee2340 wait what? You dont have monoplies in socialism, except for the state. On the other hand, in capitalism you very quickly get monopolies, and its only because of state intervention and social policies, that they are prevented. Without that, with a few decades, you get a handful (or just one), and they'll never lose their power
@fetB I think you misunderstood me. Yes monopolies or corporations are socialist. Like I said the only way monopolies are possible is with state funding and involvement. Was that more clear?
@@aashishkc4078 The tax rate for a single person making 100k a year is 22%, married would be 12%. Your net worth doesn't matter. I''m not sure what you are asking.
Could you explain how it’s paid back? Because to pay back the principle and interest, he would have to get cash somehow, ie a taxable event, therefore ultimately not avoiding the tax on that amount of money. Or would he just borrow it from elsewhere and have an endless cycle of debt? Thanks!
Oh yes I love to hear that there are tons of loopholes built into the system for the 1% of us that need them the least but that are literally designed to be inaccessible unless you already have tons of money. I think we need a new system that is actually built for the majority of people
these are the things schools should be teaching us, not that we NEED to study unnecessary subjects that 99% of the people wont use ever again and get a job not knowing how there are people living life at 30y old
You think 99% of people will be able to use this? The amount of wealth you need to have to be able to pull this off would put you in the 0.1 or 0.01% of the population.
Honestly? This metod mentioned in the video only works in the USA with important milionaires. The bank will surely recgognize that you are trying to evade paying taxes.
This can be done by anyone self employed but the catch is you have to be ready to manage debt for the rest of your life because as soon as you start earning to pay the debt back your paying tax and interest
If you wanna be successful, you most take responsibility for your emotions, not place the blame on others. In addition to make you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life.
The first step to successful investing is figuring out your goals and risk tolerance either on your own or with the help of a financial professional but is very advisable you make use of a professional like I did. If you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.
Safe to say not everybody has the skill to pursue investing. But it's always easy to follow the advice of someone who knows how to i.e a financial mentor. You could anywhere between 10--40k with the right ones. Online businesses are a good bet too if you are savvy.
In fact, I had no prior experience or understanding when I began investing in 2020, but by the end of 2023, I had made a profit of almost $850k. All I had been doing was going by what my financial mentor had told me. This demonstrates that all you truly need is a professional to assist you; you don't even need to be a great investor or put in a lot of work.
“Izella Annette Anderson” is who i work with and she is a hot topic even among financial elitist in California. Just browse, you’d find her, thank me later.
What would you recommend to a 14 year old with musical talent, and about $500 start up money? I am eager to obtain financial freedom, but don’t know how to get started
The more your assets are worth, the more you can borrow , so they can borrow basically a stupid amount of money so they'll never need to cash out and let their investments continue to grow endlessly
take a loan for £1 this year. take another loan next year for £2 to pay back last and use the £1 left. Continue next year. Of course you have to have a large asset value to ensure what you borrow is large enough for you to live on.
@@blackmanta66 ah, I see. I don't have near enough collateral to think like that, lol. I could see landlords who have you know a couple million in property. They might be able to take some HELOC loans at a percentage interest lower or about the same as the house interest. And then get a bigger one each time they run out of liquid capital to pay the old loan back. But there is a fuse on that bomb that will eventually run out. Guess when you have a fuse several billion long you don't have to worry about it.
There’s a difference between paying your fair share versus being discriminated against because you earn more due to your hard work and/or brilliance, or those of your ancestors.
They don't. Due to inflation your stocks and homes went up further so you just take out more loans without ever paying off your old loans. Debt is money and miney is debt. Now you know why government debts are also exploding.
What i do is run a non profit for a cause i believe in. I can use the account to pay for housing, utilities and work from home gadgets, along with giving myself a salary that is tax exempt. Now idk how that works for you in USA but maybe go that route.😢
@sjlcanada yeah because the only reason I'd respond to you admitting to tax fraud is to start an argument for arguments sake riggght 😂 there can be no other possible reason someone would disagree with you for breaking the law 😂
There also comes a point where luxury items are essentially 'free'. You take out a loan using your assets as collateral, then use passive income to pay it off. Your yacht is also owned by a shady shell company you're totally not connected with and know nothing about, but they lease it to you exclusively, often for a peppercorn. Surprise surprise - you're renting it from yourself, but you don't own it therefore it cannot be taken from you.
This works only with billionaires as if you do that with a normal salary the bank does not make interest money but on huge debts the banks are more interested in doing business. In europe this fortun̈ately cannot happen as only switzerland has good tax terms for rich people, elsewhere they are heavily taxed
I tried your share thing up to £100, it didn’t work, I think it was because I wasn’t a new user but I hadn’t invested anything yet, is there anything I can do because I need anything to get back on my feet
Surely you still need to cystalise assets in order to pay the interest and at that point you'll be looking at paying CGT on realised funds before paying the interest? quite possibly I'm missing something. 🙂
I bought a property for 70k and it's almost paid off in 3 years. Im 35 now but once it is paid off I was contemplating buying a let house with a 15k deposit to rent out. Do you have any advice? I don't have a great income 😕
But in the end, how does he pay the loan? From what I understand, he uses the stocks as a guarantee to the bank that he’s good to pay. But if he never takes out dividends to not pay tax, how does he pay the loan and the interest back to the bank?
you still pay taxes when you exercise a stock option, so eventually he has to have a taxable event otherwise his options would expire. he paid about 11 mil in tax in 2022 when he exercised expiring options
This may be a dumb question but if you borrow a million dollars from a bank, to pay it back wouldn’t Elon have to sell his shares when he spends that million dollars, hence he will have to pay taxes once he sells it to repay the loan.
Lol I know this comes as arrogant but I get very non genuine. Type of guy to agree on anything with anyone is saying to get more exposure for his channel. Cold blooded business man.
This is my best guess: It's not that they don't get any income at all. But they make their salary just enough to make their monthly payments. They get taxed as someone earning $12 an hour instead of someone making thousands a minute.
You don't spend all the money, you use the left over loan money to pay the interest till you get a new bigger loan. Say I get million dollar loan out on my house, I go buy another house for 750K, I use the remaining 250K to live off and make payment for next year. I rent out the second house. Then a year later I go get another loan for 1.5 million pay off the first, buy another property. Notice I how no income to tax, the rents are barely paying the interest. On paper I'm losing money. Houses go up 20% I an get a bigger loans, keep going till you die. Oh no rents are barely covering the costs, this whole business is losing money no tax due. But the kids now have 50 million in property, paying some of debt by selling a property that has doubled in value wipes out the capital gains tax.
So how do they end up paying more money than they borrowed (interest plus principal) on the scheme? I understand how it works for the first iteration but how do you continue to do this after the first loan must be repaid?
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I think we need tutorial about this and s&p 500 that you always mention
But where do you get money to pay back bank, if not from income?
@@modestassparvelis8304yeah, I would think they would have to pay the 20 percent capital gains when they sell shares to pay the loan. That's less than normal taxes probably but still.
@@modestassparvelis8304yeah, I think you are right. The bank gives money but he needs to pay it back. So he will have to sell his shares and pay CGT on it and then pay the bank…
But...how he pays these money back?
These laws and loopholes need to be closed somehow. The poor are basically paying taxes for public services, which the rich also use. Things need to change. It seems a bit unfair.
The poor don't pay for hardly anything.
A little at the pump like everyone
Sales tax like some people (i don't because im in a state without it)
But most people with an income get a refund that is larger than what was deducted.
The rich don't pay income taxes but dont be so obtuse, the to 1% pay for most of what the government spends.
Turn off the fake news and open a book, tik tok isn't a source for an economics lesson
They may never will. So get rich😅
@@cestraig why was my comment deleted?
The poor isn't paying
Elon literally paid 10 billion in taxes lol, when you sell the stocks you gotta pay capital gains..
And what we need is lower taxes and less government spending, not more taxes
I wish I had a financial mentor growing up learning as an adult hits hard when you have to learn
Better late then never
You did. The state taught you how to be a slave! Don’t put your kids through state school!
Yeah man I wish I had known this piece of advice that definitely applies to me as someone who absolutely has billions in stock in a company I am the CEO of
And wen u know everything it’s to late to turn the world around lol
We don't have enough money to do that 😂
Ty so much sir Mark for helping the less financially literate people like me. We are grateful of your YT channel
He is clueless. He thinks it's cheaper to pay 5 percent interest every year, than 20 percent capital gains tax just once. And not just that, you have to eventually pay back the loan, and pay the 20 percent capital gains tax to do that.
Idk if what he says actually works, but he low key seems like the only genuine guy from all the people who give "financial advice" (another word for pulling you into a pyramid scheme)
This is why Mark is so much better than other finance youtubers / tiktokers, he actually explains and tells you why and how to make money. You're the goat man 🐐
Mark is awesome. He makes complicated things so simple to understand. No other RUclipsr is as down to earth like him. Thanks Mark
It's not "making money". This is corruption, plain as day.
@@faisalmehmood5375nothing more corrupt to have huge chunkscof money going out of our pockets to pay politicians
@@matthewr6572 Did he though? Because Elon did pay $11 billion in tax in 2021 when he sold his Tesla stock. And this Mark has definitely not explained what happens when that loan is due, it needs to repaid at some point - how will that happen? By selling stock, which will be taxed.
Ask yourself. Why would the Rich borrow money on 8% interest when they eventually have to pay back the Loan with Interest with Income. Thereby paying both Tax and Interest on the Loan. Mark is preying on naive people on the internet. Do *NOT* believe in everything you see on the internet. These RUclipsrs make money on the videos, not by actually being successful with their own financial advice.
1) How can he pay debt/interest then?
2) Does he have to sell the stock for cash and pay debt/interest?
3) Once he sells the stock, does he have to pay income tax by selling the stock?
The key is borrow against, so it's not exactly money, rather stocks. Stocks is not money, it's ownership, so he is "selling" a part of his ownership to money which he can use it for anything and everything. He interest by stocks which is not taxable because it's literally his company. So he's making himself the ruler instead of the one who's printing the money which is the gov. He basically has his own government by Tesla.
edit: If he wouldn't know in advance that his company will be successful, because he has immense data, technology and he's really just smart af, he wouldn't borrow. He's a genius planner when it comes to money and it's not even that hard to do if u are somewhat talented and experienced towards it. He has not to worry literally I suppose.
This is literally the "premium battlepass" in life 🔥
Explain to me
Explained in fortnite terms 💀
First create a huge company, with stocks that went to the moon.
Very well explained. Never understood the debt vs income debate exactly, until this reel. Thank you Mark.
There's a book called Hidden Time Wealth, and it talks about how using some secret techniques, you can overcome procrastination and accomplish anything in life. It's not just a bunch of empty promises; it's the real deal.
Scam lol just look up the book name and you’ll see
With reddit experience
I think this comment is made by bot
And the like it has gathered so fast is also due to bots
It's wild that we live in a system where billionaires can avoid taxes through loopholes and stock buybacks while their wealth grows exponentially just by holding stock options. Meanwhile, their employees, the ones actually keeping the business running, struggle on minimum wage. The inequality gap isn't just an accident-it's a feature of the system, designed to concentrate wealth at the top while the rest of us are left to fight over crumbs. It's not sustainable, and it shouldn't be acceptable.
If everyone had the same thing it wouldn’t work, so either you can work hard to obtain to be on one side or stay on the other side
I mean you’re never going to have a perfect system. If we were all perfect communism would work
@@Kevin_Fallenthe problem is it's not equal to work. No matter how much work lower class people put in it doesn't mean anything in a system meant to keep them down
@@Kevin_Fallen it’s extremely difficult to make it to being a billionaire no matter how hard or smart you work, I’m not saying everyone should have equal stuff but there shouldn’t be a system where the mega rich avoid taxes
@@codyhintz7866 one could say system of a down
It works in America maybe, but not everywhere. In the Netherlands you have to pay yourself a salary as CEO of your own company. Mandatory, so everyone is paying some income tax
Is there actually a required minimum ?
Do you have a source? Very interesting
In this method you actually do both
You pay for the salary and in stock options that's how a tax attorney explained it to me Elon only did stock options because he already had money
if middleclass thinks the same way, then tax law will be revised. How unfair...
The system is built for the rich
And yet most in this country will do ANYTHING to please the rich
Then do it.. oh wait you didn't make a business that contributes to society. You really missed the point of this whole video if you see this and still think that rich people don't pay taxes on their income.
@@I_am_bacon._. Because rich keep the system going by paying the poor
There is nothing stopping the middle class from doing this, but it just makes no sense. If you take no salary, then you have to sell the stock anyway to repay the loan. The reason super rich people do this is because selling a lot of stock by a major owner (like Musk in his own Tesla) makes the shareholders suspect something might be wrong with the company, so they might sell as well, which could cause the overall stock price to go down. If your entire salary is based on the stock price, you really don’t want it going down. All it does is allow them to sell the stock at a much steadier pace
Love your channel, I’ve learned so much over the months. Keep it coming ! You have my sincere appreciation.
In islamic zakat or tax, you are taxed on net current assets, instead of income
To pay back the loan eventually, wouldn't he have to sell a portion of the stock and incur capital gains tax?
Thing is, they could theoretically pay back the current loan with yet another loan, thus resulting in a chain where there is no need to exercise stock options. Although, capital gains tax is usually lower than ordinary tax rates anyways, somewhere between 15-20% usually.
Nope, just keep taking out loans, borrowing against your assets. This is how large landlords do it, they simply refinance their properties (release equity) and live on that money which is tax free.
Yes Elon actually did this before he winded up paying the most taxes in US History
@@Bacrenfencing and then the market turns and the banks call the loans in as the valuation ratios are wrong, resulting in the sale of property and payment of tax, generally at the worst time in the property cycle
Please do part 2 or a full videos of how they avoid paying taxes please🙏
Yeah but I don’t have Billions of dollars😅
You don’t have billions of dollars IN Tesla stock
Thanks to that system, the rich gets richer, the poor gets poorer. That's why, zekat system is good for humanity. I give my zekat and other charity which is called sadaka regularly. It makes a difference in poor people's lives and also makes me happy.
And this is why we should tax assets including stocks at the point of it being used as collateral for a loan. The gains have effectively been realized and turned into usable cash.
The answer is less tax, not more. Bye now IRS
@@angelo41299the nation runs on taxes
The rich have f a r more money than the working class
Tax the rich
@@angelo41299 just tax your rich. ah nah it's communist i guess.In France , 500 People owns 45% ofthe gdp. Never seen such a misery in the street.
Why is the answer more taxes? So the government can waste them?
@@pasdidees9351 the French are miserable even with $10 million in the bank. That was a really bad example...
Finally finally finally.
Someone who's truly honest about how the wealthy pay not tax.
Finally
Thank you so much for letting people know how it works.
But they still have to repay the loan? If he takes no salary, then he must sell the stock at some point to repay the bank, sold stock is taxed. And no, it’s not possible to avoid repaying the bank because they will take ownership of the stock that was put up as collateral for the loan, you must agree to that condition before you receive the money
@@Swatotastic same question I've asked
@@Swatotastic maybe you borrow a million from the bank and pay that back from the money you borrowed, , so you only need 500k but borrow 1 mill, that gives you 500k to pay the loan back then when you think oh I have almost ran out of the 500k to pay it back you do the same.....its funny that all these channels like this say easy to make the money, how billionaire don't pay tax, but they never tell the viewers how it is paid back and the question gets asked by loads of people but does not get an answer
@@stehume while i’m sure that some banks wouldn’t be against providing an ultra high net worth client with multiple concurrent loans since the likelihood of the client going bankrupt is so tiny, i’d suppose that, in general, the bank wouldn’t let someone take out another loan until the previous one was repaid in full
@@Swatotastic I had the same thoughts tbh as I was writing it, but then did think well it in in Amarica so maybe thy do things different to here in the uk
well when I have made my billions and not paying tax then I will make a RUclips video lol
World best youtuber
Edit: thank you so much you are my inspiration 😊
Mark you are amazing! You make it so easy to understand
How do you payback the loan? No one ever says anything about that? That money doesn’t fall from the sky
And how about if the value of your stocks crash? That means you're fucked right
I really want an answer to this question. Glad someone asked before I could
You take out another loan.
Sell some stock....
This is really important question
That's pretty clever. If you can't avoid using money for personal use then use something that cannot be taxed not being money or valuables. I was exactly asking myself how can the holder of a big company get a ton of money out of it for personal use if he cannot pay himself that much. I thought of stocks but you'd have to sell them, but this is new to me. Good stuff.
You still need to pay back the loan, from an income on which you had to pay taxes... but now you also have to pay interest
No. You can just take out a new, bigger loan and pay off the old loan with some of the new loan. When you have that much in shares, the bank will never deny another loan. They have their security, so why should they not approve another loan?
Just get a new bigger loan
Hi
They just take out a bigger loan to pay that one. they will do this until they die😂
They just take a bigger loan, and banks allow them as they run on interest and are sure that the money will be paid
I just watched The Platform, and the concept of that film is exactly how reality works between the rich and poor. The rich get to eat all the lovely prepped food first, leave scrape for the working class, and then the poor get absolutely nothing. Great film, I highly recommend it.
Taxes goes around 45% and interest up to 15% .
Until you need to pay back the loan no one can seems to explain that
Yeah, i never understood that part. I guess id you invest the money you loan then you can pay back the interest with the gains? That's still taxed, but it's less tax than taking out a salary.
Business loan interest and payments are tax deductible, so one option is selling stock dividends to pay the loan payments, then basically having no taxes on your dividends because you had to spend them.
You can also have some salary or income and essentially reduce or eliminate your taxable income by deducting the loan.
Also when you exercise your stock options you pay income tax
@johnsmith9784 they are only deductible if you are pay8ng expense the acquisition of assets is a taxable event.
You don’t pay back the loan. You just pay the interest
Question....where do they get the money to pay the loan back if they cant cash in stock?
Dividends which in my country are tax free but I’m sure about the tax on dividends in USA .
And if the stock price drops, the banks call in their loans.
Can you make another video with hypothetical dollar amounts and interest rates for how exactly this works
How do they repay the loans? Like if your paid in stocks and don’t get a salary. So you take a loan which will have a monthly payment attached to it. Wouldn’t you need to sell the sticks to pay the loan? So you paying taxes when you sell the stocks and your paying interest on the loan. The bank won’t just give you an infinite loan with no structured repayments.
The only way this makes sense is if it’s used to gather capital for another profit producing asset. Like instead of selling the stocks and building an apartment complex. You get a collateralized loan against your stock value. Then pay the loan back with the rent from the apartment. But you’re still going to now have to pay taxes on the rent created. You’re just using one asset to pay for another. There is no way to just live if a loan and not pay taxes. You are saving the taxes it would have taken to liquidate the stocks to fund the project yourself. But literally anyone can get a loan like this. Lid you have equity in your house you can take a loan against it. and access the money without paying capital gains tax and selling your house. This is something anyone with any equity or ownership in any asset can do. But the loan has to be paid back, and taxes have to be paid when you liquidate assets to pay them. This could even happen to cover a settlement. Say you owe 10 million to someone and want to avoid having sheriffs come start taking all your stuff. And you have a business worth 30 million. You don’t want to sell your captial investments, or business entirely, and you don’t want them to come start stripping equipment and machines from your building or taking your building. You can go get a loan and pay the 10 million, then pay back the loan.
Great until the lender calls in the loan.
Doesn’t make any difference then you draw down from the company and pay the loan… literally the simplest logic
The better argument is if the capital gains when you pay off your loan is worth it. You have to pay back the loan somehow and for that you would liquidate your position.
You will incur capital gains which may or not be equal to income tax in your country. But you will be paying interest plus capital gains to settle the transaction eventually.
Capital gains and real estate have left the chat
I like your videos. But how to make it in Europe? In Netherlands, we have box 3 property tax for any shares or cash we process. Tax authority decides an average earning every year and charge 36% tax over it. How do European people get rich then? Other European countries have similar mechanisms, if not Box 3, there are some other wealth taxes.
It’s basically a loop hole
Not a loophole! It's by design.
@@rodnee2340 kinda, i don't think the new-dealers thought having politics and economy mixing together would lead to this, even though every one told them so
@@AliResool-k8z Ayn Rand understood this. The separation of the economy and state is the only way you get a truly free society. I'm not a complete Liberian. And Rand it definitely not my favourite author. But she definitely had some good points that are starting to make me rethink her work. Like her idea that monopolies are only possible because of state intervention and funding. All this is called socialism BTW. Ronald Reagan said 'the worst thing anyone can hear are words "I'm here from the government, I'm here to help."'
@@rodnee2340 wait what? You dont have monoplies in socialism, except for the state. On the other hand, in capitalism you very quickly get monopolies, and its only because of state intervention and social policies, that they are prevented. Without that, with a few decades, you get a handful (or just one), and they'll never lose their power
@fetB I think you misunderstood me. Yes monopolies or corporations are socialist. Like I said the only way monopolies are possible is with state funding and involvement. Was that more clear?
Am I the only one who thinks that it would actually be stupid not to abuse such a flaw? XD
But elon paid 10 billion on tax 😅
If he didn't he would lost the options, and then have much less to borrow against, he paid a 10% tax rate. I would take 10% tax rate in a second.
@dannelson6980 yeah because why would anyone pay tax on networth
@dannelson6980 let's say if your net worth is 1 million right now ,and you made 100k last year how much would you pay 10% of a million or what ?
@@aashishkc4078 The tax rate for a single person making 100k a year is 22%, married would be 12%. Your net worth doesn't matter. I''m not sure what you are asking.
Could you explain how it’s paid back? Because to pay back the principle and interest, he would have to get cash somehow, ie a taxable event, therefore ultimately not avoiding the tax on that amount of money. Or would he just borrow it from elsewhere and have an endless cycle of debt? Thanks!
They pay it back with the next loan they take out, it's a system where you just keep taking out endless loans.
I don't know if I understand, where do they get the money to pay the bank interest?
keep borrowing man
by buying more stock options and calling the bank to take out more money! Infinite money glitch!
Oh yes I love to hear that there are tons of loopholes built into the system for the 1% of us that need them the least but that are literally designed to be inaccessible unless you already have tons of money. I think we need a new system that is actually built for the majority of people
these are the things schools should be teaching us, not that we NEED to study unnecessary subjects that 99% of the people wont use ever again and get a job not knowing how there are people living life at 30y old
This is exactly the thing only 1% can use.
You think 99% of people will be able to use this? The amount of wealth you need to have to be able to pull this off would put you in the 0.1 or 0.01% of the population.
Honestly? This metod mentioned in the video only works in the USA with important milionaires. The bank will surely recgognize that you are trying to evade paying taxes.
@@MrMartinSchou to be fair only about 200k+ a year is enough to start doing it on small loans like 10k
This can be done by anyone self employed but the catch is you have to be ready to manage debt for the rest of your life because as soon as you start earning to pay the debt back your paying tax and interest
Great Mentor ❤
Mark do more videos on testing side hustles and a full demo on how to do it plz
If you wanna be successful, you most take responsibility for your emotions, not place the blame on others. In addition to make you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life.
The first step to successful investing is figuring out your goals and risk tolerance either on your own or with the help of a financial professional but is very advisable you make use of a professional like I did. If you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.
Safe to say not everybody has the skill to pursue investing. But it's always easy to follow the advice of someone who knows how to i.e a financial mentor. You could anywhere between 10--40k with the right ones. Online businesses are a good bet too if you are savvy.
In fact, I had no prior experience or understanding when I began investing in 2020, but by the end of 2023, I had made a profit of almost $850k. All I had been doing was going by what my financial mentor had told me. This demonstrates that all you truly need is a professional to assist you; you don't even need to be a great investor or put in a lot of work.
@@mariaguerrero08Hope you don't mind if I ask you to recommend this particular professional you use their service?
“Izella Annette Anderson” is who i work with and she is a hot topic even among financial elitist in California. Just browse, you’d find her, thank me later.
What would you recommend to a 14 year old with musical talent, and about $500 start up money? I am eager to obtain financial freedom, but don’t know how to get started
But what about capital gains tax when they sell the shares to pay off the loans? That's 20 percent for them.
They don't sell them, they take another loan it's crazy, that's why they are in crazy amounts of debt
Isn't that like a ponzi scheme? @@blackmanta66
The more your assets are worth, the more you can borrow , so they can borrow basically a stupid amount of money so they'll never need to cash out and let their investments continue to grow endlessly
take a loan for £1 this year. take another loan next year for £2 to pay back last and use the £1 left. Continue next year. Of course you have to have a large asset value to ensure what you borrow is large enough for you to live on.
@@blackmanta66 ah, I see. I don't have near enough collateral to think like that, lol. I could see landlords who have you know a couple million in property. They might be able to take some HELOC loans at a percentage interest lower or about the same as the house interest. And then get a bigger one each time they run out of liquid capital to pay the old loan back. But there is a fuse on that bomb that will eventually run out. Guess when you have a fuse several billion long you don't have to worry about it.
Protect this man at all cost
I’m proud to pay tax. Most people don’t have as much money as me, & my tax goes to things like the NHS. Not all millionaires are greedy
And immigrants who don't wanna move a muscle, lile the infestation in Europe.
maybe if you have tesla shares worth bilions you would also pay interest jnstead of tax ?
There’s a difference between paying your fair share versus being discriminated against because you earn more due to your hard work and/or brilliance, or those of your ancestors.
@@itzefzyand the waste of space racists
I actually manage start to saving money because of you, sir. You gave lots of life changing advice.
Saving $s..? Stpd
So how do they pay the loans then?
By taking another loan. And they repeat the cycle til they die.
They don't. Due to inflation your stocks and homes went up further so you just take out more loans without ever paying off your old loans. Debt is money and miney is debt. Now you know why government debts are also exploding.
I always have the question how do they pay the interest? More loan from a different bank? When does the cycle end?
Thanks for sharing XAI68Y and SUI. 💯
Then does the bank take payment shares? How do you repay the loan without taking profits somewhere else?
I think if you own a company like Elon, you can just take the money from your company to cover up the loan. You don't need to sell shares.
What i do is run a non profit for a cause i believe in. I can use the account to pay for housing, utilities and work from home gadgets, along with giving myself a salary that is tax exempt. Now idk how that works for you in USA but maybe go that route.😢
Admitting to tax fraud online is wild
It's a tax loop, not fraud.
@rotation-y2n if I told you the earth was round, I'm sure you'd come up with a reason as to why its flat.
@sjlcanada yeah because the only reason I'd respond to you admitting to tax fraud is to start an argument for arguments sake riggght 😂 there can be no other possible reason someone would disagree with you for breaking the law 😂
@@rotation-y2n it takes a stand up person to admit they were wrong. Thank you
Can you please make an illustrated video on this?
Smart
There also comes a point where luxury items are essentially 'free'. You take out a loan using your assets as collateral, then use passive income to pay it off.
Your yacht is also owned by a shady shell company you're totally not connected with and know nothing about, but they lease it to you exclusively, often for a peppercorn. Surprise surprise - you're renting it from yourself, but you don't own it therefore it cannot be taken from you.
To be completely fair, leasing is often better than owning if you use a commodity sparsely. Applies to middle class as well as rich dudes.
Sir i am from India and your videos are very very helpful for me.. I have learnt a lot from you..pls keep sharing more😇😇👍
Don’t they eventually have to withdraw those shares to pay for the loan, those shares are taxed once they are cashed?
Exactly the taxes do need to get paid eventually
Share are just collateral in case they fail to pay the loan, but they use the company's funds to pay up the debt.
yeah this short is an oversimplification and an inaccurate one at that
The bank: will you come to my birthday son?
This works only with billionaires as if you do that with a normal salary the bank does not make interest money but on huge debts the banks are more interested in doing business. In europe this fortun̈ately cannot happen as only switzerland has good tax terms for rich people, elsewhere they are heavily taxed
Thank you for your knowledge. Many people may call you a boomer , but for me you are a angel who helps people ❤.
I tried your share thing up to £100, it didn’t work, I think it was because I wasn’t a new user but I hadn’t invested anything yet, is there anything I can do because I need anything to get back on my feet
And the point is, how do they get the money to pay the loans back? Or do they just leave the stocks to the bank?
I can't believe I didn't see that simple point before:
Interest is far cheaper than tax.
So how can you pay those debt and interest? Where is the money to pay for it
I've always wondered tho. How do they pay the interest and loan itself? From another loan from another bank?
Meanwhile he asks folks to work 80 hours a week and be paid for 40😂
How do you then make repayments on the loan if you have no income?
What do they use to pay back the interest in the loan ?
When they take a loan on their stocks, how do they earn money to payback the loan and interest if they are not drawing a salary?
Surely you still need to cystalise assets in order to pay the interest and at that point you'll be looking at paying CGT on realised funds before paying the interest? quite possibly I'm missing something. 🙂
YOU TAKE A BIGGER LOAN
THE STOCK GROWS FASTER
Nah, I think you are right, interest plus CGT (20%) better than 40% income tax…
I bought a property for 70k and it's almost paid off in 3 years. Im 35 now but once it is paid off I was contemplating buying a let house with a 15k deposit to rent out. Do you have any advice?
I don't have a great income 😕
But in the end, how does he pay the loan? From what I understand, he uses the stocks as a guarantee to the bank that he’s good to pay. But if he never takes out dividends to not pay tax, how does he pay the loan and the interest back to the bank?
I apologize for my ignorance, what does “borrow against them” mean?
How does he pay on the loan if he doesn't sell the stock? Paying with the dividends?
How do they pay the loan back? With stock options?
But you have to pay back the loan right? Where would you get that money from
Where the money to pay the monthly loan comes from? Honest question
you still pay taxes when you exercise a stock option, so eventually he has to have a taxable event otherwise his options would expire. he paid about 11 mil in tax in 2022 when he exercised expiring options
This may be a dumb question but if you borrow a million dollars from a bank, to pay it back wouldn’t Elon have to sell his shares when he spends that million dollars, hence he will have to pay taxes once he sells it to repay the loan.
How do he repay the borrowed money if not with a salary, dividends or selling stock?
Yes but you have to code PayPal first and sell it
Hes so tall and his attitude is so attractive
So if you don't sell your stock and realize your gains how do you pay the loan?
Lol I know this comes as arrogant but I get very non genuine. Type of guy to agree on anything with anyone is saying to get more exposure for his channel. Cold blooded business man.
Thanks for the advice! Got XAI68Y, feeling bullish! 🚀
How can you pay interest if you are not receiving an income?
A BIGGER LOAN
The STOCK GROWS FASTER
ok but how do they pay back the money to the bank, or the intrest if they never get money from their company
So how do they pay for their personal food and fuel, rent, car payments etc?
How do you pay back the loan? With another loan?
I don't understand can you explain further as if the rich borrow against stock what are they paying intrest back with? Thanks 😊
This is my best guess:
It's not that they don't get any income at all.
But they make their salary just enough to make their monthly payments.
They get taxed as someone earning $12 an hour instead of someone making thousands a minute.
How do they pay the additional interest if they don’t sell their shares?
You don't spend all the money, you use the left over loan money to pay the interest till you get a new bigger loan. Say I get million dollar loan out on my house, I go buy another house for 750K, I use the remaining 250K to live off and make payment for next year. I rent out the second house. Then a year later I go get another loan for 1.5 million pay off the first, buy another property. Notice I how no income to tax, the rents are barely paying the interest. On paper I'm losing money. Houses go up 20% I an get a bigger loans, keep going till you die. Oh no rents are barely covering the costs, this whole business is losing money no tax due. But the kids now have 50 million in property, paying some of debt by selling a property that has doubled in value wipes out the capital gains tax.
So how do they end up paying more money than they borrowed (interest plus principal) on the scheme? I understand how it works for the first iteration but how do you continue to do this after the first loan must be repaid?
TELL us about Premium bonds MT; are they still worth investing in?
How can they pay the interest if they don't take a salary? Wouldn't they have to sell their shares and pay capital gains?
It amazes me at how many people (christians and muslims specifically) try to earn money through interest even though its not allowed
Jesus despised the anarchy of business, and nowadays he would 100% be called a filthy commie by most of his zealous followers. Ironic