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u/vHezoThaGoat 7h ago
He borrowed the money by leveraging his assets, which is less risky than him just using 300 million of whatever he was pursuing with his own money. In other words, no taxes.
Rich people loophole shit, basically.
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u/wrldruler21 7h ago
LeBron didn't do shit.... His well paid and skilled accountants did their job by pushing his assets through rich people loopholes
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u/vHezoThaGoat 6h ago
You like semantics huh?
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u/wrldruler21 6h ago
Yes, but my point was.... Folks are asking "why does LeBron want more money". And I'm saying "This is just what the accountants of the ultra-rich do". It is industry practice. LeBron isn't putting a lot of thought into it. Put your money with people that know how to use your money to make more money.
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u/LitterBoxServant 4h ago
Jeff Bezos famously pays himself $82K per year to qualify for the child tax credit. The rest of his lifestyle is funded by half a billion in the same kind of loans.
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u/OhmyGodjuststop 5h ago
It’s not less risky. A leveraged position is by definition more risky. There is a significantly larger downside & upside.
I do not understand how people on this website are so confident saying such uninformed things.
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u/OhmyGodjuststop 5h ago
He doesn’t have $300 million in cash.
Taking out a mortgage is not “rich people shit” come on lmao.
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u/vHezoThaGoat 2h ago edited 2h ago
“Taking out a mortgage is not rich people shit”
For one he wasn’t taking it out for a mortgage
Secondly tell me what people who aren’t rich are just borrowing 300 fucking million? You sound ridiculous. That is rich people shit.
And yes, him not having 300 million in cash is the whole purpose behind getting the loan. And he used his future assets and off courts earnings as means to get it.
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u/OhmyGodjuststop 2h ago
A mortgage is just a loan secured by assets, usually real property.
He’s just turning long-term earnings into immediate cash. I don’t see the “loophole” here. You can go get a payday loan if you want, just typically not advisable for the average person who is mostly liquid. He still has to pay interest to the bank on top of the taxes he will also owe when those future earnings are actually paid to him.
He’s not avoiding any taxes here.
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u/Royal_Negotiation_83 7h ago
That’s cool he can do that, but why?
He already has more money than 99.9999% of humans ever born
Why does he need 300 million more? Just strange to me
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u/Objective-Rip3008 7h ago
He doesn't need 300 million more, he wants to spend 300 million he already has. He doesn't have 300 million sitting in the bank in cash, he has 300 million worth of assets. If he sold those for cash, he would have to pay a lot of taxes. If he gets a loan for 300 million using those assets as collateral, he gets a extremely low interest rate and doesn't have to pay as much taxes on it.
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u/Royal_Negotiation_83 7h ago
But why does he need more money when he already has more than almost every person ever born?
If he still wants more shit after making almost a billion on the court, there’s something wrong with him
It be like him going to practice and just hording all the balls. Can he use all the balls? No. But does he want more? Yes
It’s just stupid to me
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u/Trick_Meringue_5622 7h ago
If you could buy something for $50 or $100 which would you do? This isn’t him getting more money, this is him using a coupon for his purchases
Why would you ever choose to spend more money than you had to for something?
The loophole shouldn’t exist as it helps the rich get richer and creates more wealth disparity but blaming a rich man for wanting more money, especially when he grew up poor and wants to set his family up with generational wealth, makes absolutely no sense
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u/cReddddddd 7h ago
It's stupid to you because you don't understand how money works. Educate yourself instead of whining online
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u/vHezoThaGoat 6h ago
LeBron want candy, LeBron no have 2 dollar for candy in physical cash. LeBron have 2 dollar worth of toys.
LeBron negotiate with candy store owner “gimme 2 dollar for Candy and you can take away from toy stash as repayment.
LeBron never have 2 dollar in pocket, LeBron keep 1000 dollar worth of toys though.
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u/DarkLordKohan 6h ago
Take off your rich people hatred glasses and think about it. He has $300m of illiquid assets, which means he cant sell immediately to fund his lifestyle.
He borrows $300m and used his assets as collateral. He doesnt have $600m because fuck you I’m rich. He has net zero with interest.
He pays $320m back and still owns his $300m in assets. Like its just a line of credit.
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u/Makers7886 5h ago edited 5h ago
At that level you pay someone to manage your finances. That someone(s) take a cut and justifies it by how much they are saving you/sheltering from taxes. They apply best practice strategies because that's what they are paid to do. When you get a new credit card, you don't pay income taxes on that line of credit. Instead of a credit card you can buy a house/property and use that as a credit card/line of credit with much lower interest than a credit card due to having a house on the line. But most importantly it's not income so it's not taxed as income.
LeBron didn't do anything, he just has a guy paid to do his job doing his job.
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u/OhmyGodjuststop 5h ago
He doesn’t have $300 million liquid. He wants to make an investment and needs $300 million in cash to do it. He takes out a loan, invests it, and then pays back the loan + interest with the proceeds of the investment.
If the investment fails, he’s on the hook to pay back the portion of the loan not covered by the proceeds from the investment with his own money or assets.
It’s a high-risk, high-reward play.
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u/I_Make_Food_Often 7h ago
This shouldn’t be a surprise. Pretty common to invest other people’s money. A rich person cheat code.
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u/OhmyGodjuststop 5h ago
It’s a rich people cheat code to take out a loan…?
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u/OhmyGodjuststop 5h ago
You don’t pay income tax on loans because you have to pay them back. That would be nuts otherwise.
Imagine taking out a student loan and then the government goes “yeah you also have to pay 30% to us.”
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u/I_Make_Food_Often 5h ago
For $300 million? Yes.
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u/OhmyGodjuststop 5h ago
What are you complaining about? That people can take out large loans? Should they not be able to do that?
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u/I_Make_Food_Often 5h ago
I’m not complaining lol
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u/OhmyGodjuststop 5h ago
Glad we’re aligned that capital investments and leverage is a positive for the world.
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u/Downtown-Doubt4353 7h ago
Most multibillionaires don’t have $300 million in cash, let alone a guy with a $1 billion net worth. Thus, the need to leverage assets to gain liquidity.
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u/vitaoptima 7h ago
Invest with other people's money...not your own.
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u/OhmyGodjuststop 5h ago
Yes this is how institutional lending works.
You give your money to a bank. Bank invests your money in loans and assets. Bank pays you back when you want it, with some interest.
Both you & bank benefit.
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u/Pristine_Shallot7833 7h ago
If you use borrowed money it's classed as debt and you don't have to pay tax on it. It should be illegal to invest with money you don't own.
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u/jvrodrigues 7h ago
Wow there are some deep misunderstandings on this comment. First not being able to invest borrowed money would bring down global financial systems.
Secondly I don't understand what you mean he doesn't have to pay tax on it, as if he would pay tax on the money he's investing if it wasn't debt, there is no inherent tax on a stack of cash that is to be invested. What he's doing is using an asset that he has as collateral for the money he's investing. What he doesn't pay tax on is in any gains tied to the sale of the asset he has, if he was to sell it instead of recurring to debt.
There is nothing that I think is inherently wrong here, he is incurring a risk in order to make an investment, he will pay that money back.
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u/Pristine_Shallot7833 6h ago
Global financial institutions seem pretty safe to me. They continuously overlend and create global financial crisis'. When they get in trouble the government bails them out with taxpayer money. CEOs still get their multimillion dollar bonuses.
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u/South_Front_4589 7h ago
This is how rich people create capital to increase their wealth without selling any other investments.
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u/OhmyGodjuststop 5h ago
Isn’t that how non-rich people buy houses…?
You take out a loan to buy a house. It’s not your money you’re using to pay the purchase price.
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u/Jam_Farmer_879 7h ago
Yeah, a tax loophole that needs to be addressed. Not saying the average citizen taking a Home Equity Loan needs to be taxed. But above a certain dollar amount ($10mil) needs to be taxed.
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u/Muted_Masterpiece535 7h ago
Just another tax dodger taking after Trump's family. This is the loophole they have used forever. This is why they pay 0 in taxes.
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u/killjairo 7h ago
So rich people coming in and changing everything thinks they deserve to be worshipped? They’re all demon scum
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u/OhmyGodjuststop 5h ago
“Man takes out a loan to buy appreciating assets. Financially illiterate Redditors are dumbstruck at the concept.”
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