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Hey tell me Historian, part part of the IRS code deals with taxing wealth.. Please educate me.. I'm anxiously waiting to learn about this phantom parts of the law I missed.
If I meant investment club, I would have said club, I clearly didnt.. Another thing you've displayed ignorance about.. How many things can you be wrong about before you become embarassed?
Oh but it will generate $9 billion in NEW revenue to the government over the next 10 years.
Do they think people will just roll over and pay taxes now ?
NO..they will seek alternate methods of deferred investment.
Oh but it will generate $9 billion in NEW revenue to the government over the next 10 years.
Do they think people will just roll over and pay taxes now ?
NO..they will seek alternate methods of deferred investment.
Ahh, so earlier when I said they were going after chump change, I was completely correct.. $900M a year.. haha
Ahh see, thats the beauty after about 10 years of doing it.. You can have money to also live, without paying taxes..
here, lets do a nice round $1M transaction to show you how it works.
You buy a $1M property for about $100K down, borrow $900K, that pays you about $80,000 a year in income. But because you financed most of that property, you give every single dime to the bank, meaning you make no profit from it, and becuase you make no profit, you pay no taxes.
It would take about 15 years to pay this property off, so lets assume you held it out for 15 years just to make the figures even.. By that time, the income on the property grows to about $100K a year, meaning the property has grown from $1M, to about $1.5M.. (round figure just to give you the idea)..
You now turned $100K, into $1.5M, and didnt pay a dime in taxes on the profit, thus far..
Now in 15 years, when teh property is paid for, and you start to get $100K a year in income, you have to determine, do you want to then start paying taxes on the $100K a year income, well I say hell no.. So you go to the bank and borrow $1M from the bank, you roll $750,000 into a $7.5M property, thus growing your wealth from $100K, to $9M (i.e. the original $1.5M property + $7.5M new one), you also pocketed $250,000, which you use to help live off of, (and since its borrowed money, its not taxed), or you sell the property for $1.5M,, putting the $1M, into a $10M property tax free, and then you just grew your livable assets from the $100K you put down on the property, to $500K, the difference between what you sold the property for, and what you put into a new property, and the tax liability is about $150K on it. If you dont need the money, you can roll the $1.5M into a $15M property, and you just turned $100K, into $15M, without paying a dime in taxes..
15 years ago I was homeless, didnt even have a place to sleep, 10 years ago, I literally "retired" in my early 30's.. While I do "work", I dont receive income, and I spend every single dime of my "profits".. Last year I had to spend $50K before the end of the year, so my company went out and spent $50K on a computer system.. I've got a beast, and its now a tax write off..
Ok, obviously onto your question, well how the hell do I live.. Well I've got a home in Ohio, 1 in PA, 1 in Florida, 1 in Illinois, and 3 of them are paid for by borrowing against the assets I've paid down.. Remember, borrowed money isnt taxed..
So while I continue to grow my debt, I do so by growing my assets 10x as fast.
Of course the next and final part of the equation, is estate managment.. One would think that fine, the government will nail me when I die, but of course, thats not true either..
I simply begin to slowly turn over ownership of corporations with "net worth", to my children, and make sure that their newly obtained ownership is below the taxed threshold.. And as they grow and become majority shareholders, these trusts buy up the other trusts that my kids dont own, (of course at a loss, for example, it will buy up that $1M property from me at $999,999.99 thus giving me $1M tax free and cash in the bank), and no taxes owed, while allowing my kids to acquire all of the assets and income, and still not pay taxes.
Of course one might think about management headaches of owning so many properties, but finally, you need to look at who the tenants are. They are major corporations, USPS, McDonalds, Walgreens etc, corporations that will sign 30 year contracts, manage the buildings, manage the properties, pay the property taxes, etc.. All you do is sit back and allow them to send the checks right to the mortgage company, thereby paying down your debt for you, and you obtain wealth.
I am in PA. Ok, thank you for taking the time to write the example. You're example makes sense. I do have another question but I want to be careful how I write it because there is nothing worse than someone who always answer "but I can't do that".
It took me a long time an alot of stress getting here so yes I am late in the game. Anyone who thinks it is easy to even get this far let along as far as people further than me can ... Anyway, since I am late in the game, I do understand the difference as Kiyosaki says, good debt, bad debt but if initial investment is not a problem then at 54, I have to wonder about time. Then again, 64 is not that old these days.
I have also researched another question I had, again, coming from having bad debt, again thinking middle class my goal was to have no debt including a mortgage on my house. Almost there in a very short time, would have been if (well do not feel like repeating). Anyway, the wealthy own assets to pay for their liabilities. So do the rich typically have mortgage debt on their own home. From what you are saying I would think that does not really matter as long as they have the assets to support it.
If I meant investment club, I would have said club, I clearly didnt..
Of course you didn't.
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