I've been hearing a lot lately about how the rich don't pay themselves an income, but instead borrow against their assets and use that debt to finance their lifestyles. So long as their assets continue appreciating in value, they can continue borrowing against them and avoiding a huge tax burden.
It makes sense to me for tax mitigation purposes, but getting into debt and hoping that your assets continue growing in value seems like a gamble to me.
Is this "debt as income" narrative a financially sound strategy?
What would @MJ DeMarco do? (WWMJD)
I understand how letting money sit in a bank is a guaranteed loss due to inflation, but going to the other extreme (debt) seems sort of risky to me.
Is there a better way? Or is using debt "the" way?
From what I can tell by reading all of MJ's books, it seems like he advocates having little to no debt and having an FU sum of money invested and earning you a healthy income. I don't recall ever reading anything about using debt in the way I've described above.
Thoughts?
It makes sense to me for tax mitigation purposes, but getting into debt and hoping that your assets continue growing in value seems like a gamble to me.
Is this "debt as income" narrative a financially sound strategy?
What would @MJ DeMarco do? (WWMJD)
I understand how letting money sit in a bank is a guaranteed loss due to inflation, but going to the other extreme (debt) seems sort of risky to me.
Is there a better way? Or is using debt "the" way?
From what I can tell by reading all of MJ's books, it seems like he advocates having little to no debt and having an FU sum of money invested and earning you a healthy income. I don't recall ever reading anything about using debt in the way I've described above.
Thoughts?
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