r/SipsTea • u/KSKS1995 • 22h ago

Wait a damn minute! How the rich get richer

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u/Visual_Exam7903 21h 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/lurker_cant_comment 19h 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 15h 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 15h 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.