The Frightening Power of Compound Growth
The Buy part of Buy, Borrow, Die
Have you ever wondered how do the wealthy 1% generate income while paying little taxes? Turns out anyone of reasonable net worth can use the buy, borrow, die strategy. This article covers my version for the buy part.
Disclaimer: I’m not a financial advisor. These are just my opinions. Do your own homework, blah blah blah.
What BBD isn’t
A few weeks ago I asked a friend of mine if he’s ever heard of the “buy, borrow, die” financial strategy. He answered “you mean like the middle class?” I almost spit out my coffee!
What I found funny was that, he guessed it meant the middle class borrowing money to buy random things, then die with little to no assets.
The wealthy version of BBD is much better. Intrigued? Read on.
When you were in high school, you probably learned about compound interest rate in a savings account. We were taught early to save money, earn interest, and then rainbows and unicorns.
While there are some truths to that lesson, but realistically, what’s the current interest rate on a savings account? 0.1%? Money sitting in a savings account is literally losing value to inflation.