Key Takeaways:
- The "Buy, Borrow, Die" strategy involves acquiring appreciable assets, borrowing against them, and ultimately leaving them to heirs—typically with favorable tax implications.
- To leverage this strategy effectively, one must carefully select assets that are anticipated to appreciate in value over time.
- Utilizing loans strategically against assets is a non-taxable event that can fund further investments without incurring capital gains taxes.
- Implementing the "Buy, Borrow, Die" strategy requires a substantial initial wealth base and should not be undertaken without professional financial advice.
- The technique offers the duality of creating stable income streams from assets like rental properties while also ensuring future wealth for heirs, often at an increased market value but without the tax bite of capital gains.
Chapters:
Timestamp Summary
0:00:05 Introduction and disclaimer about investment strategies
0:00:37 Discussion begins on the “buy, borrow, die” strategy
0:01:59 Importance of having sufficient funds and a financial advisor
0:02:20 Explanation of buying various types of assets, including real estate and stocks
0:03:43 Benefits of leaving assets to family members at fair market value
0:06:20 Tax benefits of the strategy, including minimizing capital gains
0:07:21 Using borrowed funds for investments as a non-taxable event
0:08:48 Mention of life insurance as part of the strategy
0:09:06 Conclusion and contact information for Allison Reif Martin
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Phillip Washington, Jr. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
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