How Rich People 💰 Don't ❌ Pay Taxes

How I got here…

21: Graduated Vanderbilt in 3 years Magna Cum Laude, and took a fancy consulting job.
23 yrs old: Left my fancy consulting job to start a business (a gym).
24 yrs old: Opened 5 gym locations.
26 yrs old: Closed down 6th gym. Lost everything.
26 yrs old: Got back to launching gyms (launched 33). Then, lost everything for a 2nd time.
26 yrs old: In desperation, started licensing model as a hail mary. It worked.
27 yrs old: "Gym Launch" does $3M profit the next 6 months. Then $17M profit next 12 months.
28 yrs old: Started Prestige Labs. $20M the first year.
29 yrs old: Launched ALAN, a software company for agencies to work leads for customers. Scaled to $1.7mmo within 6 months.
31 yrs old: Sold 75% of UseAlan to a strategic buyer in an all stock deal.
31 yrs old: Sold 66% of Gym Launch & Prestige Labs at $46.2M valuation in all-cash deal to American Pacific Group. (you can google it)
32 yrs old: Started making free content showing how we grow companies to make real business education accessible to everyone (and) to attract business owners to invest or scale their businesses.

Today: Our portfolio now does $200M/yr between 10 companies. The largest doing $100M/yr the smallest doing $5M per year. Our ownership varies between 20% and 100% ownership of the companies. Many of them we invested in early and helped grow (which is how we make our money - not youtube videos).

To all the gladiators in the arena, we’re all in the middle of writing our own stories. The worse the monsters, the more epic the story.

You either get an epic outcome or an epic story. Both mean you win.

Keep crushing. May your desires be greater than your obstacles.

Never quit,

Alex

*FULL DISCLOSURE*
I make content to make money - just - on a longer time horizon than most. I want to build trust with business owners so we can find the best ones and help them scale. And if they’re awesome, write them a check and go all the way as partners.

[TheMaleRoleModel]

this is what a lot of big companies do. it sounds simple.
the key is the assets have to appreciate and generate more than repayments. that's the hard part

[SrJackquito]

Alright thanks. Now I know how to spend my money once I become ultra wealthy.
Now for the hard part…

[JakeInvest]

Dave Ramsey is the only person that thinks wealthy people dont do this

[rockymarcianotherd]

Great! That works until it doesn't.

[davypig]

I wish I understood things like this. When I try to listen my mind F'ks off somewhere.

[Abraxastrust]

Great, now all I need is some money and assets

[thehoov]

The issue with this is cash flow. You need cash flow to maintain the repayments on those loans. So this has actually been proven to not work long term. Especially with market corrections.

[BatMan-cqgq]

"IF they grow" "IF they cash flow positively"

[kyledupree]

Biggest draw back is if your investments dont make enough to pay back the debt. There is always a risk factor and its a good high risk high reward stratedgey

[yankeedyehard]

Loans are not taxable income, because they have to be payed back at a given interest rate. The contention that loans are “never” treated as income is correct, with one exception, if debt is canceled when a lender allows a borrower to not pay back part or all of the loan.
Once a debt is forgiven, it is considered income. Borrowers should receive a 1099-C tax form.

[MexicanWorkEthic]

Essentially he’s talking about a margin account regarding stocks and a mortgage/HELOC for RE. The biggest issue is risk. If you can’t service the debt due to a number of unknown future circumstances, you’re fucked.

To add: be wary with all these financial gurus in their late 20s/early 30s. Most have only experienced bull markets. Most have no concept of a bear or recessionary economy. They only know “everything goes up.”

[CDE]

finding asset that's appreciating and cash flow is the most hardest thing

[Harileeon]

How do you pay the first load ? Of dividends ? Or take another loan to pay the previous loan ?

[TuanNguyen-hwob]

So what do you pay back the loans with??

[walterski]

IF, IF, IF they continue to grow... When that growth music stops someone isn't going to have a chair.

[maiseygray]

As long as the profit is higher than the interest..

[Mogardie]

This is why the tax code is messed up for billionaires. No problems with them taking out loans. I have a problem with them never paying taxes on the money they eventually pass to their kids. Let’s say they were paid $5m a year and bought company stock they would still be taxed at one point but most of them never pay taxes then pass the billions to children or charities at a stepped up basis.

[LetondAtreides]

Which raises the question of whether or not it should be taxed since technically it's still debt, and you will still be paying your debt and interest in the future.

There's also a question of where else the government is managing to extract money as a result of your actions.

Like, if you pay a salary, obviously that gets taxed. Most purchases get taxed.

So how much are you really paying on net?

[colinlpeace]

Big companies are “too big to fail”. Individuals are not. This is risky advice for anyone with something to lose.

[allureesthetics]

Loans have interest which is a percentage, a tax is a percentage too