0:01 You are sitting at your kitchen table
0:04 during tax season staring at a W2 form
0:06 and realizing that the government just
0:08 took a massive bite out of your year.
0:09 You worked late nights and missed
0:11 weekends and dealt with stress for 12
0:13 months only to find out that for three
0:15 or four of those months you were
0:16 essentially working for free just to pay
0:19 Uncle Sam. You probably feel a mix of
0:21 frustration and resignation because you
0:23 have been told your whole life that
0:25 paying taxes is just the price of living
0:27 in a civilized society. But then you
0:29 open your phone and see a headline about
0:31 a billionaire paying a tax rate that is
0:33 actually lower than what you pay. You
0:35 see tech moguls and real estate tycoons
0:38 living lavish lifestyles while reporting
0:40 almost zero income to the IRS. It feels
0:43 unfair. It feels like the system is
0:45 rigged. And here is the uncomfortable
0:48 truth that nobody wants to admit. The
0:50 system is rigged, but not in the way you
0:52 think. It isn't rigged because they are
0:54 breaking the laws. It is rigged because
0:56 they are playing a completely different
0:57 game with a completely different
0:59 rulebook than the one you were taught in
1:01 school. Most people think the path to
1:03 wealth is to work hard to earn a high
1:05 salary and then save what is left after
1:08 taxes. But the wealthy know that earned
1:10 income is the most heavily taxed money
1:12 on the planet. They know that trying to
1:13 get rich through a salary is like trying
1:15 to run a marathon while wearing a
1:17 backpack full of bricks. Today we are
1:19 going to break down the exact mechanism
1:22 the top 1% use to opt out of the tax
1:25 system entirely. It is a strategy called
1:27 buy, borrow, die. By the end of this
1:28 video, you are going to understand why
1:30 your high salary might actually be a
1:32 trap and how you can start applying
1:34 these billionaire strategies even if you
1:36 don't have a billion dollars yet. We are
1:38 going to deconstruct the three phases of
1:39 this strategy and show you how to move
1:41 from being a tax victim to a tax
1:44 strategist. To understand why the rich
1:46 don't pay taxes, you first have to
1:47 understand the fundamental difference
1:49 between how you get paid and how they
1:52 get paid. When you earn a salary, that
1:54 money is taxed immediately before it
1:56 even hits your bank account. The federal
1:58 government takes a cut, the state
2:00 government takes a cut, and social
2:02 security takes a cut. You are left with
2:04 what remains to pay your bills and try
2:07 to build a life. This is what financial
2:10 experts call the W2 trap. You are
2:11 trading your time for money and that
2:13 money is being taxed at the highest
2:16 possible rates. Wealthy people do not
2:18 trade time for money. They trade money
2:20 for assets. And this brings us to the
2:22 first phase of the strategy which is
2:25 buy. The wealthy do not focus on income.
2:27 They focus on net worth. They take their
2:29 capital and they buy appreciating assets
2:32 like stocks, real estate or businesses.
2:34 Here is the critical distinction that
2:36 most people miss. When you buy a stock
2:39 or a piece of real estate and it goes up
2:41 in value, you do not owe a single penny
2:43 in taxes on that growth until you
2:45 actually sell it. This is called an
2:48 unrealized gain. If you buy a share of
2:50 Amazon for $100 and it goes up to
2:54 $1,000, you have made $900 in paper. The
2:58 IRS cannot touch that $900. It sits
3:00 there compounding and growing year after
3:03 year completely tax-free. This is why
3:05 you see headlines about billionaires
3:08 whose net worth jumped by $10 billion in
3:10 a single year yet they paid zero income
3:12 tax. It is because that wealth is locked
3:15 inside assets not sitting in a checking
3:17 account as cash. The wealthy understand
3:19 that the moment you sell an asset you
3:21 trigger a taxable event so they simply
3:24 never sell. They let the snowball roll
3:26 and grow bigger and bigger. But this
3:28 leads to a very obvious question that
3:29 probably has you scratching your head
3:32 right now. If all their money is tied up
3:34 in stocks and buildings and they never
3:36 sell anything, how do they actually pay
3:38 for their lifestyle? How do they buy the
3:40 yachts and the mansions and the
3:42 groceries? If their wealth is just
3:44 numbers on a screen, this is where we
3:46 enter the second and most genius phase
3:48 of the strategy, which is borrow. This
3:50 is the part that rewires your brain
3:52 because we have been taught that debt is
3:54 bad. We have been taught that debt is
3:57 slavery. But for the wealthy, debt is
3:59 not a burden. It is a tool. It is a
4:01 tax-free way to access their wealth.
4:03 Instead of selling their stock to get
4:05 cash, which would trigger a massive tax
4:07 bill, they go to the bank and they ask
4:08 for a loan using their assets as
4:10 collateral. This is often called a
4:13 securitiesbacked line of credit. The
4:15 bank looks at their $10 million
4:17 portfolio and says, "Sure, we will lend
4:20 you $5 million cash at a very low
4:21 interest rate because we know you have
4:24 the assets to back it up." Now, here is
4:26 the magic trick. Loan proceeds are not
4:29 taxable income. When the bank wires that
4:31 $5 million send to their account, the
4:35 IRS sees zero income. That is $5 million
4:37 SV spending power that is completely
4:40 tax-free. They can use that money to
4:42 live a lifestyle that you can only dream
4:44 of. And on paper, they look like they
4:46 have no income at all. But you might be
4:48 thinking, what about the interest? Don't
4:51 they have to pay interest on that loan?
4:52 Yes, they do. But the math is
4:55 overwhelmingly in their favor. Let's say
4:58 they pay 3% or 4% interest on the loan,
5:00 but their investment portfolio continues
5:03 to grow 8% or 10% a year. They are
5:05 making a profit on the borrowed money.
5:07 They are using the bank's money to live
5:09 while their own money stays invested and
5:12 continues to compound. This is called
5:14 positive arbitrage. They are essentially
5:16 getting paid to borrow money to live
5:18 their life. Compare that to your
5:20 situation where you sell your labor, pay
5:24 30% or 40% in taxes, and then try to
5:26 invest what is left. They are skipping
5:28 the tax step entirely and keeping their
5:31 wealth working for them 24 hours a day,
5:33 7 days a week. This brings us to the
5:35 third and final phase of the strategy,
5:37 which is die. Now, I know that sounds
5:39 morbid, but estate planning is where the
5:42 ultimate tax loophole exists. You might
5:43 be wondering what happens to all that
5:46 debt they accumulated if they keep
5:48 borrowing and borrowing won't the bill
5:51 eventually come due? Well, yes and no.
5:54 When the wealthy individual passes away,
5:56 their heirs inherit the assets. And
5:58 under current tax law, something
6:00 incredible happens called the step up in
6:03 basis. This is the holy grail of tax
6:06 avoidance. Let me explain how this works
6:08 with a simple example. Let's say your
6:10 grandmother bought some stock 50 years
6:13 ago for $10 a share. Today, that stock
6:16 is worth $500 a share. If she had sold
6:18 it the day before she died, she would
6:20 have had to pay capital gains tax on
6:23 that $490 saw profit. But when she dies
6:25 and leaves it to you, the cost basis of
6:27 that stock is reset to the current
6:30 market value. The IRS treats it as if
6:33 you bought it for $500. All that capital
6:36 gains tax liability that built up over
6:39 50 years just evaporates. It disappears
6:41 into thin air. You can sell that stock
6:44 the next day for $500 and pay zero
6:47 capital gains tax. So here's how the
6:49 cycle closes. The heirs inherit the
6:52 assets tax-free thanks to the step up in
6:54 basis. They sell a small portion of
6:56 those assets to pay off the loans that
6:58 were taken out to fund the lifestyle.
7:00 Because the basis was stepped up, they
7:03 pay no tax on that sale. The debt is
7:04 wiped clean and the family keeps the
7:06 vast majority of the wealth ready to
7:09 start the cycle all over again by assets
7:11 borrow against them to live and die to
7:14 wipe out the tax bill. It is a perpetual
7:16 motion machine of wealth creation that
7:18 completely bypasses the tax system that
7:20 you and I are forced to participate in.
7:23 This explains why wealth inequality is
7:25 exploding. It explains why the middle
7:26 class feels like they are running on a
7:28 hamster wheel while the rich seem to be
7:31 taking an elevator to the top. The tax
7:33 code was written by the wealthy for the
7:35 wealthy. It rewards capital and it
7:38 penalizes labor. If you work for money,
7:41 you lose. If your money works for you,
7:43 you win. It is that simple. And getting
7:45 angry about it won't change your bank
7:47 account. What will change your bank
7:49 account is understanding these rules and
7:51 figuring out how to apply them to your
7:52 own life, even if you aren't a
7:54 billionaire. Now, you might be thinking
7:56 that this sounds great for Jeff Bezos,
7:58 but I can't walk into Chase Bank and ask
8:00 for a million-doll loan against my
8:02 savings account. And you are right. You
8:05 probably can't do it at that scale yet.
8:07 But the principles of buy, borrow, die
8:09 can be applied by anyone who shifts
8:12 their mindset from consumer to investor.
8:14 The first step is to stop prioritizing
8:16 paying off lowinterest debt and start
8:19 prioritizing accumulating appreciating
8:21 assets. Most people are obsessed with
8:23 being debtree. They take every extra
8:25 dollar they earn and they throw it at
8:27 their mortgage or their lowinterest car
8:29 loan. They think this is the path to
8:31 freedom, but by doing that they are
8:33 trapping their equity in an asset that
8:36 they can't eat and can't spend. They are
8:38 killing their liquidity. The wealthy
8:41 person would never pay off a 3% mortgage
8:43 early. They would take that extra cash
8:45 and buy more assets. They would put it
8:48 into an index fund or a rental property.
8:50 They want their money growing at 8% or
8:54 10%, not saving 3%. They understand the
8:56 concept of opportunity cost. Every
8:59 dollar you use to pay down cheap debt is
9:00 a dollar that is not out there working
9:02 for you in the market. Let's look at
9:04 home ownership through this lens. For
9:06 the average American, their home is
9:08 their biggest asset, but most people
9:10 treat it like a piggy bank that they are
9:12 trying to fill up. The smart strategy is
9:14 to treat it like a bank that you can
9:16 borrow from. As your home increases in
9:18 value, you can use a home equity line of
9:21 credit or HOC to access that cash
9:24 tax-free without selling the house. You
9:26 can then use that borrowed money to buy
9:28 another rental property or to fund a
9:30 business venture. You are borrowing
9:33 against your asset to buy more assets.
9:35 You are creating your own mini version
9:37 of the buy, borrow, die strategy. You
9:39 are using debt to expand your wealth
9:41 rather than using your income to pay off
9:43 debt. This requires a massive
9:45 psychological shift. You have to stop
9:47 being afraid of debt and start
9:49 respecting it as a tool. There is good
9:51 debt and there is bad debt. Bad debt is
9:53 borrowing money to buy things that go
9:56 down in value like cars or clothes or
9:58 vacations. That is consumer debt and it
10:01 will keep you poor forever. Good debt is
10:03 borrowing money to buy assets that go up
10:06 in value or generate income. Good debt
10:08 makes you rich. The wealthy have almost
10:10 no consumer debt, but they have massive
10:12 amounts of investment debt. They are
10:15 leveraged. They control huge amounts of
10:17 assets with relatively little of their
10:19 own cash. Another way to apply this is
10:21 through your investment portfolio. If
10:23 you have a taxable brokerage account,
10:26 you can apply for margin privileges.
10:27 This allows you to borrow against the
10:30 value of your stocks. Now, this comes
10:32 with risks and you have to be careful
10:34 about margin calls where the bank forces
10:36 you to sell if the market drops. But
10:38 used conservatively, it is a way to
10:39 access liquidity without triggering
10:42 taxes. Instead of selling stocks to pay
10:44 for a down payment on a house or to
10:46 cover an emergency, you can borrow
10:48 against your portfolio. You keep your
10:50 stocks, you keep your growth, and you
10:52 avoid the capital gains tax. The trap
10:55 that most people fall into is the trap
10:57 of liquidity. They keep their money in
10:58 cash because they want to be able to get
11:02 to it. But cash is a terrible asset. It
11:04 loses value to inflation every single
11:07 year. The wealthy hold almost no cash.
11:09 They hold assets. And because they
11:11 understand how to borrow against those
11:13 assets, they have plenty of liquidity
11:15 without holding cash. They have realized
11:17 that in a modern financial system,
11:19 access to credit is just as good as
11:21 having cash in the bank. But it allows
11:23 your net worth to grow much faster. This
11:25 brings us to the concept of phantom
11:28 income versus phantom debt. When you
11:30 work a job, you have real income and
11:32 real taxes. But when you own assets, you
11:34 have phantom income, which is
11:36 appreciation that you don't pay taxes
11:39 on. The wealthy maximize phantom income.
11:41 On the flip side, most middle class
11:43 people have phantom debt. They have
11:45 liabilities like car leases and
11:46 subscriptions that drain their wealth
11:48 but don't show up on a balance sheet as
11:50 traditional debt. You need to flip this
11:53 equation. You want to accumulate assets
11:55 that generate invisible tax-free growth
11:57 and eliminate the lifestyle liabilities
11:59 that drain your cash flow. We also need
12:01 to talk about the role of inflation in
12:03 this strategy. The buy borrow die
12:05 strategy is actually a massive bet
12:07 against the currency. When you borrow
12:09 money, you are shorting the dollar. You
12:11 are borrowing dollars today that are
12:12 worth a certain amount and you are
12:14 paying them back years later with
12:15 dollars that are worth less due to
12:18 inflation. If inflation is 3% a year and
12:21 your loan interest rate is 3% a year,
12:24 the real cost of that loan is zero, you
12:26 are getting free money. The wealthy use
12:28 inflation to erode the value of their
12:30 debts while their assets rise in price
12:32 with inflation. They are winning on both
12:34 sides of the equation. The middle class
12:37 saver is losing on both sides. Their
12:38 cash savings are being eaten by
12:40 inflation and they aren't carrying the
12:42 kind of good debt that gets cheaper over
12:44 time. They are swimming upstream while
12:47 the wealthy are floating downstream. You
12:49 have to stop trying to save your way to
12:51 wealth. You cannot save your way to
12:53 wealth in a fiat currency system that is
12:56 designed to inflate. You have to invest
12:57 your way to wealth and you have to use
13:00 leverage to amplify those returns. Now I
13:03 know this sounds risky and it is risky
13:05 if you don't know what you are doing.
13:07 Leverage cuts both ways. If you borrow
13:10 money to buy assets and those assets
13:12 drop in value, you can get wiped out.
13:14 This is why the wealthy also focus
13:16 heavily on risk management. They
13:19 diversify. They have cash reserves. They
13:21 don't overleverage. They use debt
13:24 strategically, not recklessly. You need
13:26 to build a solid foundation before you
13:28 start layering on leverage. You need
13:31 that emergency fund. You need that
13:33 steady income stream. But once you have
13:35 the foundation, you have to stop playing
13:38 it safe and start playing it smart. One
13:40 of the most practical steps you can take
13:41 immediately is to look at your
13:44 retirement accounts. While 400 onx and
13:47 IAS are great, they have limitations.
13:49 You can't easily borrow against them.
13:52 The wealthy often build massive taxable
13:54 brokerage accounts specifically because
13:57 of the flexibility they offer. A taxable
13:58 account allows you to use the buy borrow
14:00 dice strategy much more effectively than
14:02 a retirement account where the
14:04 government sets all the rules. If you
14:06 are maxing out your 4001 but have zero
14:08 liquidity in a brokerage account, you
14:10 might be locking yourself into a rigid
14:13 system that limits your options. Think
14:15 about the concept of the tax drag. Every
14:18 time you pay tax, you are losing part of
14:20 your compounding engine. If you lose 30%
14:23 of your gains to taxes every year over
14:25 40 years, that doesn't just reduce your
14:27 wealth by 30%. It can reduce your final
14:31 net worth by 50% or 60% because of the
14:33 loss compounding on that tax money. The
14:35 by borrow dice strategy is ultimately
14:38 about eliminating tax drag. It is about
14:41 keeping 100% of your capital working for
14:44 you 100% of the time. It is the most
14:46 efficient way to build wealth that
14:48 exists. You have to change your
14:50 identity. You have to stop seeing
14:52 yourself as a worker and start seeing
14:54 yourself as a capital allocator. A
14:57 worker tries to increase their salary. A
14:59 capital allocator tries to increase
15:01 their assets. A worker tries to pay off
15:04 debt. A capital allocator tries to
15:06 manage debt. A worker is afraid of the
15:09 IRS. A capital allocator uses the tax
15:11 code as a road map. The system isn't
15:14 going to change. The government isn't
15:16 going to fix this for you. If you wait
15:18 for the laws to become fair, you will be
15:20 waiting forever. You have to learn the
15:22 rules of the game as it is played right
15:24 now and play it to win. The beauty of
15:26 this is that it doesn't require you to
15:28 be a genius. It requires you to be
15:31 disciplined and it requires you to be
15:33 patient. It takes time to build the
15:35 asset base required to make this work.
15:37 You won't be able to borrow against your
15:39 portfolio tomorrow if you have $500 in
15:42 it. But if you spend the next 10 years
15:44 aggressively buying assets instead of
15:46 buying liabilities, you will eventually
15:48 reach a crossover point. You will reach
15:50 a point where your assets can support
15:52 your lifestyle. And when you reach that
15:54 point, you never have to sell. You never
15:57 have to pay the tax man. You have
15:59 achieved true financial freedom. Don't
16:01 let the fear of debt keep you poor.
16:03 Don't let the obsession with income
16:06 blind you to the power of assets. Start
16:09 small. Buy your first index fund. Buy
16:12 your first rental property. Keep buying.
16:14 Never sell. And when you need cash,
16:16 learn how to access it without
16:18 triggering a tax bill. This is the
16:20 blueprint. This is how the dynastic
16:22 families have kept their wealth for
16:25 generations. It is not a secret. It is
16:27 just math. And now that you know the
16:29 math, you have no excuse to keep playing
16:31 the game the old way. Your future self
16:33 is counting on you to stop working for
16:35 money and start making money work for
16:38 you. The tax code is a series of
16:40 incentives. If you do what the
16:41 government wants, which is invest and
16:44 build businesses, you get rewarded. If
16:45 you do what the government doesn't
16:47 prioritize, which is just working a job,
16:49 you get taxed. Align your financial
16:51 behavior with the incentives of the
16:54 system. Stop trying to swim upstream.
16:56 Build your ark of assets and let the
16:58 current of compound interest carry you
