Alex Hormozi: How the rich avoid paying taxes...MY strategy - Part 1

The video discusses tax strategies of the ultra-wealthy, including living in lower tax states, considering global taxation, buying and holding investments for the long term, and thinking in longer time horizons for generational wealth.

This video by Alex Hormozi was published on Jun 18, 2021.
Video length: 09:08.

In this video, Alex Hormozi discusses tax strategies of the ultra-wealthy and shares his conclusions after spending $750,000 on different tax advisors and strategies.

He emphasizes the importance of shifting one's perspective around taxes and living in a lower tax state or country. He also talks about the significance of growth in net worth and the importance of buying and holding investments for the long term.

The ultra-wealthy think in longer time horizons and focus on generational wealth rather than short-term gains.

• Alex Hormozi spent $750,000 on tax advisors and strategies to minimize tax drag.
• Living in a lower tax state or Puerto Rico for six months can reduce federal tax.
• Buying and holding investments can be more tax-efficient than buying and selling frequently.
• The tax rate only matters if you choose to sell and pay capital gains.
• Thinking in longer time horizons can help you build generational wealth.

How the rich avoid paying taxes...MY strategy - Part 1 - YouTube

Introduction

• Alex Hormozi discusses tax strategies of the ultra-wealthy.
• He spent $750,000 on different tax advisors and strategies to minimize tax drag.
• He paid $18 million in taxes to the US government in the last three years.
• He wants to shift our perspective around tax strategies.

Where You Live

• Living in a lower tax state can make a big difference in your taxes.
• Global taxation applies to US residents, regardless of where they live.
• Living in Puerto Rico for six months of the year and exporting services from there can reduce federal tax to 4%.
• Expatriating and becoming a citizen by investment is another way to avoid federal tax.
• Living on as little as possible for as long as possible can help you take advantage of compounding interest.

How You Buy

• Buying something for less than its value can help you avoid paying taxes on the gain.
• Buying and holding investments can be more tax-efficient than buying and selling frequently.
• Warren Buffet holds investments for decades to take advantage of tax treatment.
• Buying safe and long-term investments can lead to disproportionate returns.
• Thinking in longer time horizons can help you build generational wealth.

How the rich avoid paying taxes...MY strategy - Part 1 - YouTube

How You Sell

• The tax rate only matters if you choose to sell and pay capital gains.
• Buying and holding investments can be more tax-efficient than buying and selling frequently.
• Thinking in longer time horizons can help you build generational wealth.
• Buying safe and long-term investments can lead to disproportionate returns.
• Warren Buffet holds investments for decades to take advantage of tax treatment.

Strategies of the Ultra-Wealthy

• Loans are never treated as income but they are spendable money that you can consume and use.
• Plow all of your money into assets that earn while you sleep which is the definition of wealth.
• Growth that is tax-free can be realized by taking loans against those things and can be used to live your life.
• As long as the loans that you're taking are less than the growth of your assets, you can use all of that growth.
• Continue to let it compound tax-free for the rest of your life and live off the loans.
• Conservation easements which is basically you donate land and you get the full value of the land even though you didn't pay the full value.

Aligning with the Rules that Exist

• Long term, if you don't sell anything, you're not going to get taxed on it.
• Live for less than you possibly can.
• Money only has value in so far as it allows you to do things that you want to do.
• Forgetting that makes it more reasonable to live in Texas versus California.
• Living in Puerto Rico means relinquishing a lot of freedoms and having to be there six plus months of the year.
• It makes sense if you were smaller and you were starting out and you're trying to develop your net worth.

Watch the video on YouTube:
How the rich avoid paying taxes...MY strategy - Part 1 - YouTube