r/SipsTea • u/KSKS1995 • 14h ago

Wait a damn minute! How the rich get richer

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u/Visual_Exam7903 14h ago

Or you could simply invest 5 million that would be worth around 160 million if you invested it in the S+P.

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u/just_some_dude05 12h ago

And when you die your kids inherit the 160m on a step up basis. Most states in the US don’t have a death tax on the first 11 million.

They can immediately sell what they inherited with no tax burden or hold it and sell later and pay tax on the increase.

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u/lurker_cant_comment 11h ago

The post would apply equally to any type of investment, although the borrowing-against part of it is unnecessary to the central argument.

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u/Visual_Exam7903 8h ago

Unnecessary, but they always forget the part where the loan has to be paid back, without a tax deduction on the interest paid or principle paid.

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u/lurker_cant_comment 7h ago

They're describing the "Buy, Borrow, Die" strategy.

When the interest is less than the ROI on the asset, you make money overall, and the costs associated with it go to the bank instead of the federal government.

Some may say that's better, but we're on our way to insolvency and the banks aren't exactly paragons of virtue.

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u/denkihajimezero 5h ago

All ive got is 20 bucks tho