StrongHome

Buy. Borrow. Die.: How the Rich Stay Rich

Building a StrongHome Foundation requires not being “average” in any area of your life

Your foundation must be built with four equally important pillars: Family, Faith, Fitness and Finances. It also requires that you build them with Focus.

Each day you must do your best to strengthen your pillars:

– Spend quality time with your Family.

– Eat healthy food and exercise.

– Spend time developing your Faith.

– And to increase your finances in a way that is less stressful and more effective, I encourage the following:

Raise your financial IQ a little bit every single day. To help you raise your financial IQ today,

I want to challenge your thinking.

To do so, I must ask you a question you have never been asked before:

“To fund your Financial Foundation, would you like to build it using your money (which is highly taxed) or use your money plus Other People’s Money (OPM), which is 100% tax-free?”

Which one sounds better to you?

I can’t give you a full understanding in this short article of the topic of how all wealthy families used “OPM” to build their fortunes, but I’m certain that it is not a new concept, and I have several resources that can help you on this journey. I first read about using OPM 18+ years ago, when reading the book Rich Dad Poor Dad, by Robert Kiyosaki.

Today, the richest Americans have a name for this wealth-building strategy: It is called “Buy, Borrow, Die,” and the good news is that you don’t have to be wealthy to apply it. You can also Google, “How Average Americans can also Buy, Borrow, Die without paying taxes” for even more information on this topic.

The rich follow a simple system:

1) They BUY stocks and Exchange Traded Funds (ETFs) in brokerage accounts, and they purchase real estate.

2) They grow their stocks and real estate portfolios, and then they borrow against them to purchase more stocks and real estate. They understand that borrowing is 100% tax-free and avoids the 30-50% in taxes that they would have to pay from working to earn their money. As long as they never sell, they never pay taxes on the gains!

3) When they Die, their assets are passed to their family, generally 100% tax-free. Then, their family repeats this same strategy, building generational tax-free wealth.

Am I encouraging you to not pay taxes? Nope! Not at all.

This is simply to teach you a strategy to reduce your taxes and help you fight inflation. Less taxes mean more money for your family. More money means more time to strengthen your other StrongHome foundational pillars.

Let’s give you a basic example using some real numbers when donating to a church and/or charity:

Let’s assume you wanted to invest $10,000 in your brokerage account, and wanted to donate $2,500 to your church.

You would First invest the full $10,000 into a brokerage account (Buy).

You would take a loan (Borrow, secured by your investments) for $2,500 and donate it to your church, receiving a tax-deduction. On average, you would get $500 back on your taxes which you could then invest back into your brokerage account.

You would now have $10,500 invested, and donated $2500 to your church, but only started with $10,000.

How does that sound?

I believe in “teaching people to fish.”

I was once asked: “If you are not financially free, are you really free?”

I remember what my answer was… and decided I needed to help others become financially free.

Understanding this helps plant a simple seed in your financial journey that you can continue to nurture and grow, so you can learn a better way to secure your financial future, and ultimately help build your StrongHome foundation.

(Note: While I don’t usually recommend companies or products in any of my books or articles, I do believe that if you want to start building your Buy, Borrow, Die strategy, M1Finance (a company you can find online) is the best platform to start.)

Author

Leave a Comment