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Buy, Borrow, Die – Explained

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Re: Buy, Borrow, Die – Explained

#301

Post by johnnyanmac »

danpad wrote: post #109
TrackerFF wrote: post #85

It always puzzled me how tax-adverse some wealthy people are. I'm not talking about the wealthy people that have 100% of their wealth tied up to company (stock) that they operate - but the wealthy people that are just asset-rich, with zero operational duties. Their wealth is handled by wealth managers, they probably don't even know what they own. But minimizing taxes and hoarding wealth is priority number 1.

I don't think it's that unfathomable when you look at how governments spend the money. E.g. a public Czech university spent 80k euros to change their logo from this: https://cdn.xsd.cz/resize/21404adf37a83977870fe87fe0eb4ea6_r... to this: https://www.em.muni.cz/cache-thumbs/logo_muni_web-1580x790-2... Why does a public university, one of the most popular in the country, need a new logo? And if it needs a new logo, wh…

Thats dreadful, but 80k is a blip in terms of the billions collected per year. As mentioned, this would barely be 2 full time salaries, and more likely it's a small team spending part of their time redesigning it.

Sad part is the US would have spent millions on a "consultant" who would barely do any work and instead be a yes man to accept accountability for some admin who just wanted to play political theater for a promotion in another campus. That's where Atlus shrugs.

Re: Buy, Borrow, Die – Explained

#302

Post by johnnyanmac »

mturmon wrote: post #173
danpad wrote: post #109

Earlier quoted context omitted.

I don't think it's that unfathomable when you look at how governments spend the money. E.g. a public Czech university spent 80k euros to change their logo from this: https://cdn.xsd.cz/resize/21404adf37a83977870fe87fe0eb4ea6_r... to this: https://www.em.muni.cz/cache-thumbs/logo_muni_web-1580x790-2... Why does a public university, one of the most popular in the country, need a new logo? And if it needs a new logo, wh…

We rest easy knowing the wealthy are using their money more wisely: https://sfstandard.com/2024/08/18/zuckerberg-sculpture-prisc...

I personally despise it, but at least it's a cute gesture of love (I hope...) for a billionaire living in SF. Probably one of the more human gestures from Zuck.

Re: Buy, Borrow, Die – Explained

#303

Post by benjaminwootton »

throwawaymaths wrote: post #197
TrackerFF wrote: post #85

It always puzzled me how tax-adverse some wealthy people are. I'm not talking about the wealthy people that have 100% of their wealth tied up to company (stock) that they operate - but the wealthy people that are just asset-rich, with zero operational duties. Their wealth is handled by wealth managers, they probably don't even know what they own. But minimizing taxes and hoarding wealth is priority number 1.

If I were a billionaire I would avoid as much tax as possible and invest an equivalent amount in things like food banks and natural space conservation because the government is absolute shit at those things.

You can do that to a degree as charitable contributions are a tax write off.

Re: Buy, Borrow, Die – Explained

#304

Post by forgetfreeman »

barbazoo wrote: post #251
treyd wrote: post #217

Earlier quoted context omitted.

> otherwise it will just gradually get worse. The austerity policies of the neoliberal turn has already caused standards of living among the less fortunate to drop over the last few decades already. The 2008 crisis is when it started to impact the middle class and we're still feeling the impacts 16+ years later.

Now factor in the effects of climate change on many communities over the next decades. Maintaining our infrastructure i.e. lifestyle is going to be much much more expensive.

Minor correction: maintaining the lifestyle of billionaire coastal developers and their clientele will be much much more expensive. The poors will continue to be encouraged to eat shit and die as per usual.

Re: Buy, Borrow, Die – Explained

#305

Post by johnnyanmac »

throwaway22032 wrote: post #143
TrackerFF wrote: post #85

It always puzzled me how tax-adverse some wealthy people are. I'm not talking about the wealthy people that have 100% of their wealth tied up to company (stock) that they operate - but the wealthy people that are just asset-rich, with zero operational duties. Their wealth is handled by wealth managers, they probably don't even know what they own. But minimizing taxes and hoarding wealth is priority number 1.

I think that categorising it as hoarding is a bit of a loaded stance. I own a home and I have assets that I use to pay my daily expenses. I am, by your definition, asset rich. I don't need to "do" anything other than maintain the investments. (I also do work, but that's besides the point). On an intellectual level I realise that if we are to have a public sector it needs to be paid for, and that I'm never going to be…

>and it feels more like theft than a "trade for civilization" as some like to put it, because I know that it doesn't cost that much.

And ironically enough, it costs money to figure out how to optimize budgets and labor. So your tax minimization is just ensuring that the government always performs the greedy algorithm instead of focusing on a proper traversal of the problem. It's a death spiral.

Also, we can never really say how much something costs. Most funds for taxes go to welfare. Guess what the classic conservative economic administration always targets...

Re: Buy, Borrow, Die – Explained

#306

Post by charlie0 »

diggan wrote: post #26
jandrewrogers wrote: post #22

Earlier quoted context omitted.

As far as I have ever been able to determine, it only makes sense as a strategy under a specific set of circumstances. It is not the general-purpose infinite money glitch many people make it out to be. There are many scenarios under which it is a suboptimal financial strategy.

If we take the post at face value, one of the requirements for this strategy to work to have your "net worth exceeding around $300M". Already there it becomes pretty specific, how many in the US has that? As far as I remember, you're already in the 1% with $10M.

Here's a startup SaaS idea. Take that knowledge and SaaSify it so my broke-a$$ can also use these loopholes.

Re: Buy, Borrow, Die – Explained

#307

Post by johnnyanmac »

brigadier132 wrote: post #170
TrackerFF wrote: post #85

It always puzzled me how tax-adverse some wealthy people are. I'm not talking about the wealthy people that have 100% of their wealth tied up to company (stock) that they operate - but the wealthy people that are just asset-rich, with zero operational duties. Their wealth is handled by wealth managers, they probably don't even know what they own. But minimizing taxes and hoarding wealth is priority number 1.

Owning productive assets is a tortured use of the word hoarding. edit: Hoarding is buying assets that could be used productively and storing them somewhere instead of using them. People with a political axe to grind like taking words with negative connotations and applying them to things that don't make sense to manipulate you. If you think about it for more than two seconds you will understand we already have a word…

I mean, some people do in fact do that.

https://www.pbs.org/newshour/amp/economy/houses-are-getting-...

>If you think about it for more than two seconds you will understand we already have a word that describes someone with a lot of assets, "wealthy" or "rich".

Semantics? I think your first metaphor for productivity was better. Are you simply buying a yatch you use twice in your life ever, or are you living your dreams of sailing the deep blue in a flashy way? Or in the gray area; do you turn it into a business to have other rich people pay to ride?

How you use your assets or liquidity matters a lot more than what medium you store it as. =

Re: Buy, Borrow, Die – Explained

#308

Post by freddie_mercury »

pmichaud wrote: post #74
bhauer wrote: post #51

Earlier quoted context omitted.

The step-up in cost basis on death is the original sin that underpins the entire debate over unrealized gains. It's disheartening to see so much thought and deliberation going into an obviously toxic idea (taxing unrealized gains) when the obvious solution (removing the cost basis step-up when assets change hands) is being ignored. Inherited wealth is the least earned, so it should be politically palatable to change…

Maybe there's just no good solution here, but I think the original inspiration for this sort of law was about family homes. It's one thing to inherit stocks and have to sell some of them off, but it's much more complex to try to pass down a property that can't be arbitrarily subdivided. There are various options obviously, but I think enough people had to sell their beloved childhood home because of the tax obligatio…

Nah, the original inspiration wasn't about family homes. It was introduced in 1921, 5 years after income taxes became a thing, and was an attempt by Congress to remove a kind of double taxation that could (at that time) happen with estate taxes.

You would pay an estate tax (on the total value of something, regardless of its cost). And then you'd still (when you eventually sold it) owe capital gains tax.

Regardless of whether you think that particular reasoning makes sense, it definitely doesn't make sense if there's no estate tax (which there effectively isn't for most due to the multi-million dollar exclusion) since there's no risk of double taxation.

Step up basis was actually repealed in 1976. But there was immense pushback at the time around record keeping and Congress eventually agreed and retroactively cancelled the new law.

Whether the answer would be different today in this age of computerised record keeping .... ?

Re: Buy, Borrow, Die – Explained

#309

Post by forgetfreeman »

gruez wrote: post #147
lokar wrote: post #132

Earlier quoted context omitted.

It’s more than tax minimization. It’s buying politicians and distorting society so they pay less.

> It’s buying politicians and distorting society so they pay less. If you had the time and resources, wouldn't you try to affect change in government? It's not fundamentally any different than showing up to your city council meeting to get housing developments approved/blocked, for instance. Moreover, most people don't think of themselves as bad people, so they probably legitimately think they're doing the Right Thin…

whether you intentionally or accidentally put a kink in my garden hose the end result is I can't water my lawn until the kink's out.

Re: Buy, Borrow, Die – Explained

#310

Post by omgwtfbyobbq »

>Generally, in exchange for such favorable terms (i.e., interest-only, matures on death), the bank will ask for a share of the collateral’s appreciation (essentially, "stock appreciation rights"), and this obligation will be settled upon the borrower’s death along with the loan.

It sounds like someone is just trading taxation for paying the lender some portion of their stock appreciation.

Presumably that's lower than what they would pay in taxes, but I wonder if that's always the case. The investment bank has a unambiguous motivation to maximize the amount of money they can make.

It seems like the most frugal approach is to minimize costs and periodically sell small amounts of your asset to cover your costs.

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