'Invest, Borrow Against It, and Die': Scott Galloway Reveals Tax Strategies of the Wealthy

Saturday, 24 August 2024, 04:44

'Invest, borrow against it, and die' is a strategy employed by the wealthy to sidestep long-term capital gains taxes. According to Scott Galloway, utilizing securities-based lines of credit (SBLOCs) is a common method among affluent individuals when they wish to acquire assets without triggering capital gains tax. This post elucidates the mechanisms through which the rich leverage their capital to maintain wealth.
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'Invest, Borrow Against It, and Die': Scott Galloway Reveals Tax Strategies of the Wealthy

An Overview of Wealthy Tax Strategies

'Invest, borrow against it, and die' is a phrase coined by Scott Galloway to describe a tactic used by the affluent to minimize their tax liabilities. Securities-based lines of credit (SBLOCs) allow high-net-worth individuals to borrow against their investments, thus avoiding immediate taxation on their gains.

Understanding Securities-Based Lines of Credit

SBLOCs provide a way for the rich to access liquidity without selling assets and triggering capital gains taxes. Here's how it works:

  • Wealthy individuals invest in various securities.
  • Instead of liquidating their investments, they take out a loan using these assets as collateral.
  • This method enables them to finance purchases or investments without receiving taxable income.

Benefits of the Strategy

  1. Tax Deferral: Capital gains taxes are deferred until the assets are sold.
  2. Liquidity Access: Provides cash flow for investments while preserving asset ownership.
  3. Financial Growth: Allows continued investment growth without immediate tax implications.

Conclusion: The Wealth Gap

As Scott Galloway points out, understanding how the rich utilize SBLOCs illustrates a significant wealth management strategy that creates and perpetuates the wealth gap. The tax code heavily favors those with substantial assets, raising questions about equity.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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