I’ve seen in a few places that the super-rich can unlock their wealth ‘tax free’ by taking out a loan secured against their shareholdings or other assets, then use the cash from the loan to buy real stuff.
But how do they pay back the loan?
In: 196
Let’s say you’re worth 10 billion, you take out a loan worth 1% of that on a 10 year term and use your 10 billion as collateral. Make the lowest payments and then in 5 years you are now worth at least 12.5 billion at a modest return rate. Take out a new loan of 1% and use that to pay off your previous loan. Rinse and repeat forever. Never psh taxes because it’s not income, it’s a loan. In fact what income you do have is going towards loan repayments so it can be written off.
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