How billionaires pay little to no taxes in the US 👇

Step 1: Know the tax rules

Tax 101: Income is taxed at the time of receipt. Wealth is not taxed at the time of receipt. It gets taxed only when you sell.

Income = Wages
Wealth = Appreciated stocks, crypto & assets

Step 2: Own significantly appreciated assets.

Ex:- stocks in the company you are building, crypto, real estate & other assets

(This is the most diff step. Not many people can do this successfully)

Step 3: Get paid a small amount of salary from your company

For ex, Jeff Bezo get paid 80K in salary


Step 4:

-Borrow money against appreciated assets.

-Borrowing is not a taxable event.

-Cash proceeds can be used to live a good life and make other investments that make you wealthier.

- In some cases, loan interest expenses can be a tax write-off as well.

Step 5: Die

- At death, heirs get the appreciated assets you left with a stepped-up basis.

- Ex:- You paid 1M for a piece of land. At the time of death, it's worth 100M. Heirs get it at a 100M cost basis and don't have to pay capital gain taxes on 99M.

Step 6 :

- Heirs to repeat the same steps and compound on the wealth from the last generation.

Disclaimer: this is a *simplified* version of how the Buy, Borrow & Die strategy works in the US today.