this post was submitted on 24 Aug 2025
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Memes! A way of describing cultural information being shared. An element of a culture or system of behavior that may be considered to be passed from one individual to another by nongenetic means, especially imitation.
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They pay very low interest on the loans, and they only pay taxes on the stock if they sell (and realize the gains). If they die, their heirs don't pay taxes because of the step up basis rule.
I'm sure it gets more complicated than that. "Buy borrow die" is a common strategy
I'm not rich enough to know the details. You can probably find answers online since it's not like a secret. I think if the amounts are large enough, the rates can be lower so the bank still makes money. Also the collateral is worth more than a house, I think. Usually. More liquid.
The interest is very low, since it's guaranteed by assets. The cost of the interest is less than taxes. So, as soon as one loan expires you take out another. You keep taking them out until you die, then your estate pays the loans back out of the estate and then the rest passes on to your offspring. If you want to know more, there isn't more to know really but you can Google it. This buy-borrow-die scheme wasn't made public until the last few years and details are still scant.