Decoding the secrets of the wealthy: Tax Hacks 101

Buy, borrow, die. This is the strategy the rich use to never pay taxes. And here's how it works. Real estate investors will buy a property and the value goes up slowly over time. Let's say this particular property went up by $100,000. The rich go to the bank and get a loan for 70 to $80,000. And sometimes that's more cash than they even put into the house when they first bought it. And even more importantly, that's not taxable income because it's a loan. Now they can use the cash to make a down payment on another property and their wealth grows and grows. And they don't have to pay taxes unless they sell. But that's not even the best part. Because what if they never sell? The rich can set up a trust so that when they die, the property will be passed on to their children at a stepped up basis. Meaning if they bought it for 500,000 and died while it was worth 750,000 dollars, the children will only pay taxes on anything above seven hundred and fifty thousand dollars. That's a stepped up basis. Buy, borrow, die. Follow if you want to learn more. Generational wealth hacks.