How the ULTRA WEALTHY get loans to buy cool stuff…

Summary

• I'm sharing insights into how the ultra-wealthy use margin loans to save on taxes and secure low-interest loans.
• Margin loans allow you to borrow against your stock portfolio at typically 1-2% interest, which is much lower than most other loan types.
• Established banks may offer 50-60% of your stock value as a margin loan, and there are usually no fees or closing costs, just interest.
• The process is simple: apply for margin through your banking or wealth management institution, or through platforms like Fidelity or Robinhood Gold.
• By taking loans against stocks rather than selling them, you can avoid immediate income taxes, a strategy often used by the wealthy after an IPO.
• Beware of the risks: if your stock value drops significantly, you may face a margin call, requiring you to pay back the loan immediately or have your stocks sold off.
• I sometimes use margin loans for short-term investments, such as private lending for six to twelve months, ensuring my loans are backed by other assets.
• Personally, I prefer little to no debt in my life as it provides a sense of freedom and peace; the potential financial upside of leverage doesn't outweigh the risk for me.
• Echoing Dave Ramsey, I agree that debt introduces risk, and over a long enough timeline, it can lead to the possibility of total loss.
• My strategy has been to increase the value of the assets I have rather than seek to amplify growth through debt, which has allowed me to build a nine-figure net worth.
• If you decide to use margin loans, borrow well below the maximum limit to avoid a margin call and the unfortunate need to sell assets at their lowest value during market crashes.
• I encourage smart financial practices, not following the herd, to achieve what few others have.

Video

How To Take Action

I would suggest looking into margin loans if you want to make smart financial moves like the ultra-wealthy do. Remember, margin loans are where you can get super low-interest loans by borrowing against your stock portfolio. Here’s how to start:

• Step 1: Check if you can apply for margin loans on platforms you use like Fidelity or Robinhood Gold, or through your bank.

• Step 2: Borrow way less than the max your portfolio allows. This way, if there’s a market crash, you won’t face a margin call.

Now, avoiding taxes by taking loans instead of selling stocks sounds smart, but watch out—it’s risky. If your stock value goes down, you might have to pay back the loan fast, or worse, your stocks could be sold at a low price.

Even though you can get loans at rates like 1-2%, don’t rush into debt. I’m all about little to no debt. It gives you peace and keeps you safe from risky money moves. Always think before you borrow.

To grow wealth, here's what you can do:

• Step 3: Grow your assets' value without relying on debt. This means focusing on what you have and making it better, instead of going big on loans.

• Step 4: Only take short-term loans for things you know you can pay back quickly. Like me, I sometimes do it for private lending against another asset.

Remember, the goal isn’t just more money, but real freedom. Don’t just follow everyone else. Build your wealth your way, stay smart, and keep risks low to save your sleep at night!

Quotes by Alex Hormozi

"I make these videos because a lot of people are broke and I don't want you one of them"

– Alex Hormozi

"For me, the objective of money was freedom not more money"

– Alex Hormozi

"Why risk something that I don't want to lose for something that I don't need"

– Alex Hormozi

"It's nice as a revolving credit line for stuff that you want to make a quick purchase and then give it back"

– Alex Hormozi

"I have been not a big leverage proponent in general"

– Alex Hormozi

Full Transcript

in this video i'm going to talk to you about the number one strategy of the ultra wealthy to avoid taxes and get the lowest interest rate loans humanly possible or even imaginable or fathomable to humans if you don't know hi my name is austrian moses i own acquisitions.com it's a portfolio of companies over 100 million dollars a year i make these videos because i'm insane and i like being in wife beaters in a closet i'm kidding i make these because a lot of people are broke and i don't want you one of them i too was broke for a very long period of time and it sucked and so i hope that we can at least attenuate that situation so that you can then ask the larger questions of what is even worth it to begin with and you can come to those conclusions on your own that being said how do i get one to two percent loans or as they call them margin right loans on margin uh to buy right or buy more assets or whatever all right so quick overview of what this topic is you've heard me maybe talk about this in other videos which is like if you have let's say 100 000 in stocks okay you have 100 000 in stocks depending on who you work with if you work with a more established bank and you have a longer relationship with them let's say you you know bank or you do wealth management with merrill lynch you will have a banker and they will tell you how to do this but i'm guessing that if you ask the question you're curious you click on this video you don't have that all right so those banks will typically give 50 60 sometimes 65 of the total assets in your portfolio as a asset-backed loan which is a margin-based loan right and so that means that if i had a hundred thousand dollars and i had 65 that i could take as a loan then i could get an additional 65 000 at one to two percent which is crazy mind you the interest rates can change over time but for the you know for a very long period of time it's been one to two percent all right which is very very very very low and the nice thing about this is that there's no closing costs there's no fees there's no startups there's no nothing you just pay the interest while you hold the money and all you have to do is pay back and then your interest payments stop all right so it's nice as a revolving credit line for stuff that you want to make a quick purchase and then give it back right that is how it's you do buying on margin right that's that's where the term comes from many of you guys have asked how do i actually do this great question so what we're going to do is we're going to travel together through the the realms of time and we're going to use this new mystical mystical thing and i want to i want to teach this process to you because i think that it's very very valuable it'll also serve you for answering any of the questions that you have in your life google alright so take loans against stocks let's see here oh look it looks like there's a lot of people who are willing to do this for us let's see if alex did something ahead of time he sure did we clicked this guy and let's see what it says they explain a little bit more how useful and if i wanted to borrow on margin apply for margin that's all you have to do and if you're like well i don't bank with fidelity well i'll bet you that wherever you bank they do this now let's say uh robinhood margin margin oops margin loans there we go let's look here what is margin investing let's click they give us an answer unless it deposits blah blah blah you can upgrade to robin hood gold that's how we have to do it and that will allow you to then borrow on margin and so all you have to do is sign up upgrade to robinhood gold let's see what it does all right and so the reason i do this is because sometimes i get questions that have answers that are googleable and so please for the love of god one of the best ways to stay poor is to have a question and then not google the answer post a comment in something and then say well i guess i scratched my itch i asked the question no find the answer right and so the reason that this by margin-based loans and things like that are useful is that they are tax-free all right so if you wanted to pay for stuff and this is what the ultra wealthy do when they go ipo and they've got a billion dollars worth of stock in something they just take loans against those stocks they don't have to pay income tax they take loans against the stock they buy stuff and the amount that the stock goes up year every year exceeds what they borrow they can borrow more and then keep doing that until they die and never pay taxes all right that's how this works now the risks so the risks of doing this are that let's say for some reason you borrowed at and i think uh there's other ones there's like m1 finance i think is one that i that i heard of that does up to 35 and the percentages will vary based on the size of your portfolio how long you've been doing business blah blah blah right and so it's usually 30 to 60 ish all right and so let's say that you took out a 60 you maxed this puppy out right on your hundred thousand dollars let's say that your portfolio because of a crash in the marketplace drops to 50 000 so you took 60 right and now your portfolio is worth 50. well to to to be in accordance with the the risk tolerance that they have you need to be 60 of the new 50 000 value which means that's 30 000 is what you're allowed to borrow which means you have to pay back the 30 of the 60 that you borrowed originally and if you don't have the money they sell your crazy i know it sucks that being said that is the risk and that is why people lose their asses on margin now as a quick transition to this the reason um and you might ask alex do you borrow a margin i have in the past i have also repaid it back quickly i tend to use margin for very short-term type things so like six months 12 months transaction stuff so like if i do like private lending for hard money loans things like that that's a perfect thing for me so it's like if i'm making 12 or 15 or 20 on the money from a hard money loan i can borrow at one to two and i know i'm gonna get paid back and the money that i'm lending out i'm securing against another asset so if they don't pay me back i get the asset and then i can sell the asset and pay back right that's how i do it that being said i am not a huge like at this current moment this current juncture in time i have zero debt not even a mortgage and you may be like alex you're crazy probably probably but for me i sleep really well at night knowing that i just don't own anyone anything and for me the objective of money was freedom not more money just a side note now i do subscribe to something dave ramsey said that really resonates with me he said i'm paraphrasing that debt is a version of risk and risk if extended over a long enough time horizon exposes you to zero meaning you could lose it all and since life is long that means that there is a high possibility between now and the time you die that you do have one of these situations where you could get exposed to zero and for me i would rather not sacrifice what i do have and that i do want and need for more of something that i don't want or necessarily don't need because me doubling my money makes no difference in my life but me losing all my money makes a very big difference and so for me why risk something that i don't want to lose for something that i don't need and so for that reason i have been not a big leverage proponent in general i am very very under levered in general alright and so i have run my life that way and i focused my life on increasing the value of the assets that i have i mean just continuing to do that rather than juice everything through debt and that's just not my game personally and we still built a nine-figure net worth without any of that and so i think you can do it and maybe i'm selling which is very possible and maybe when i'm 60 i'll think that i was an absolute idiot for thinking that way it's very possible because you know what we learn things and we grow but as current state alex in 2022 uh april i uh i don't think that so anyways keep being awesome keep crushing mozination i hope they give you some illumination to like how do you do margin loans um my recommendation to you as a final parting words and disclaimer around this is that if you were going to partake in this in this risk okay because it is risk borrow significantly less than the limit all right so if you want to use the your you know borrow on margin probably 10 bar 20 tops keep it way underneath so that there's literally no way that a margin call would come up where you'd actually have to sell some of your stuff because the thing is is the moment when they get you to sell it is the moment when it's worth the least all right so you get double hosed all right so you lose the power of the money that you had and then you have to sell stuff at a massive loss all right so that's when you want to be buying and instead you're selling and that's what crashes markets a lot of people borrow that way and that's when they ride the bull and bear cycles and we want to be a little smarter and try not to do what everyone else is doing so that we can have what no one else has all right so mozy nation keep being awesome i make these videos because i enjoy it apparently and uh i do this because you know maybe some of you guys will crush it and cross 3 million or 10 million and uh want to work with us at acquisition.com so we can get you to 50 and beyond so keeping awesome love you all see you next vid bye