How to Avoid Taxes Like a Billionaire

[@all4fitz]

The first and biggest question should be what about the interest on the loan? So I found another commenter who asked this question and Root responded with "well said", but didn't answer the question.

[@verbdeux]

Well said, additionally… what’s a realistic net worth threshold that makes this feasible?… also, r the billionaires using this tactic doing this yearly?… making it somewhat analogous to a yearly wage 🤔

[@mychalrogers4253]

It would be nice if you used an example that could be more relatable to regular investors as far as borrowing against one’s equities. Maybe give an example for people with maybe 3 to 5 million dollars in equities. Is this still a viable option?? Thanks in advance. I enjoy your videos.

[@charliehargrave7458]

All you have to do is own index mutual funds and get the low tax rates.

[@ralphdanielray3963]

Thank you for the great advice & presentation.

[@RootFP]

You're welcome!

[@sharpie510]

Great video. I have a question about paying back the loan with the Buy Borrow Die strategy. You mention that there is a step up in cost basis when you die that your heirs take advantage of. But what happens to the loan or any other debts? Can those also get paid back by selling some of the assets using the new cost basis or do you use the original (pre-death) cost basis? Not sure how debts are handled here so if you have an insight into this, I'd really appreciate your answer. Thanks!

[@4403323]

I didn’t know about the borrowing against stock holdings option. Where can I borrow funds like that? This is very informative BTW.

[@RootFP]

You're welcome!

[@eoinprendergast9096]

@@RootFP I'm not following this: the loan has to be paid back, so I would still need to sell some assets? Can you give an example, using numbers? Thanks

[@larryjones9773]

@@eoinprendergast9096 You'd get another, larger loan, to repay your first loan.

[@HaiTran-uv4en]

Good tips which I have never known. Thanks so much !

[@RootFP]

Glad it was helpful!

[@onlywenilaugh6589]

But, don't you pay interest on the loan you took against stock?

[@skyman3]

Yes, I have wondered about this as well. Borrowing money today and not paying it back for 20+ years is a lot of interest. It seems like it would ultimately cost much more than just paying the taxes today.

[@RootFP]

Well said.

[@sandylamba2546]

Excellent video!

[@RootFP]

Thank you!

[@darlythomas3295]

Excellent

[@RootFP]

Thanks

[@davidfolts5893]

Thanks for the great video, James! I Imagine Jeff Bezos gets a pretty good rate on the money he borrows, much like an expense ratio for a Vanguard Index Fund. 😀

[@RootFP]

Glad it was helpful!

[@Enmanuel_V6]

Do these capital gains tax brackets also apply to crypto?

[@RootFP]

Yes!

[@Simonjose7258]

1:35 That's not true though. You're only paying 0.35 cents on the dollar on any money you earn over $539,900. We have a progressive Tax system where you pay a higher rate on any money that crosses over into the next Tax Bracket, NOT the whole amount.

[@johngill2853]

Contributing to a Roth doesn't guarantee you'll pay less taxes. The better choice is to do your homework to which account is better. Most of us will have lower effective tax rate in retirement than are marginal tax rate working. I don't want to follow what a billionaire does but make the best decision I can make based on my personal situation

[@djdust12]

Contributing to a Roth guarantees you'll pay less taxes in retirement because with a Roth you're not paying taxes in retirement 😉 Also, if you ever read a book about Roth, you'll learn there's a lot more to it than just tax brackets.

[@johngill2853]

@@djdust12 but I didn't say you'll pay less taxes in retirement I said you'll pay less taxes in total if you choose the correct ira for your situation. Yes for some people in some situations it is more than tax brackets or effective tax rate compared to marginal tax rate. For example rmds and Medicare taxes. The key you have to realize here is I said most people. And if you simply Google the median retirement Savings in the US and you think about it you'll see I'm right for most people. I'm guessing you're not most people and you've actually put some thought into this and saved. I actually hope you realize that people who save heavy and have these large portfolios are by no means the majority of the population in this country.

[@johngill2853]

@@djdust12 I just Googled it for you somebody in their 70s has a median retirement Savings of $145,000

[@RootFP]

Glad it was helpful!

[@pensacola321]

Give me the billion. They I'll figure it out...

[@RootFP]

Glad it was helpful!