Buy, Borrow, and Die Strategy

The "Buy, Borrow, and Die" strategy is a wealth-building and tax minimization technique used by the wealthy to accumulate and pass on assets with minimal tax liability. It involves three key steps:

1. Buy Assets

Investors purchase appreciating assets such as stocks, real estate, cryptocurrency, or whole life insurance policies.

Examples:

• Stocks: Buying shares in companies like Apple, Tesla, or ETFs on platforms like Robinhood.
• Crypto: Investing in Bitcoin or Ethereum and holding for long-term appreciation.
• Real Estate: Purchasing rental properties that generate passive income.
• Whole Life Insurance: Buying a whole life policy that accumulates cash value over time.

2. Borrow Against Assets

Rather than selling assets and triggering capital gains taxes, individuals borrow against their assets at low interest rates.

Examples:

• Margin Loans: Borrowing against a stock portfolio on Robinhood without selling investments.
• Crypto Loans: Using Bitcoin as collateral to get cash from platforms like Nexo.
• Home Equity Loans: Borrowing against real estate value via HELOCs.
• Policy Loans: Taking loans from whole life insurance cash value.

3. Die and Transfer Wealth Tax-Free

Upon death, assets pass to heirs with a "step-up in basis," meaning capital gains taxes are eliminated.

Examples:

• Stock Portfolio: Heirs receive stocks at their current value, avoiding capital gains tax.
• Crypto Holdings: Bitcoin held long-term is transferred with no tax liability.
• Real Estate: Properties are inherited at market value, avoiding taxes on past appreciation.
• Life Insurance Payouts: Heirs receive tax-free death benefits.

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