Alex Hormozi: How the ULTRA WEALTHY get loans to buy cool stuff...

Last updated: Jun 18, 2023

The video discusses how the ultra wealthy get loans to buy assets and avoid taxes through margin-based loans, and explains the risks and benefits of using this strategy.

This video by Alex Hormozi was published on Apr 28, 2022.
Video length: 07:30.

In this video, Alex Hormozi discusses how the ultra-wealthy avoid taxes and get low-interest loans by taking out margin-based loans against their assets.

He explains that banks will typically give 50-65% of the total assets in a portfolio as a loan, which can be as low as 1-2% interest. Hormozi also explains the risks involved in taking out these loans, such as the potential for losing assets if the portfolio value drops.

He also shares his personal experience with using margin-based loans for short-term transactions.

  • Alex Hormozi explains the strategy of the ultra-wealthy to avoid taxes and get low-interest loans.
  • Banks offer margin-based loans, which allow borrowers to get up to 65% of their portfolio's assets at a low-interest rate.
  • Margin-based loans are tax-free and have no closing costs or fees, but they come with risks, such as losing assets if the portfolio drops in value.
  • Margin-based loans can be obtained through banks, wealth management companies, or online platforms like Fidelity or Robinhood Gold.
  • It's important to understand the risks and use margin-based loans wisely for short-term transactions and quick repayment.

How the ULTRA WEALTHY get loans to buy cool stuff... - YouTube

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Introduction

  • Alex Hormozi is an entrepreneur, investor, and CEO of Acquisition.com.
  • He talks about the number one strategy of the ultra-wealthy to avoid taxes and get the lowest interest rate loans possible.
  • He explains how to get one to two percent loans or margin-based loans to buy assets.
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Margin-Based Loans

  • Banks will typically give 50-65% of the total assets in your portfolio as an asset-backed loan, which is a margin-based loan.
  • For example, if you have $100,000 in stocks, you could get an additional $65,000 at one to two percent interest rate.
  • There are no closing costs, fees, or startups, and you just pay the interest while you hold the money.
  • It's a revolving credit line for quick purchases that you can pay back and stop interest payments.
  • You can take loans against stocks by working with a bank or doing wealth management with companies like Merrill Lynch.
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How to Get Margin-Based Loans

  • You can sign up for margin-based loans with companies like Fidelity or Robinhood Gold.
  • The interest rates and percentages will vary based on the size of your portfolio and how long you've been doing business.
  • It's important to do your research and understand the risks before taking out a margin-based loan.
  • If your portfolio drops in value, you may have to pay back the loan or risk losing your assets.
  • Margin-based loans are useful because they are tax-free, and the ultra-wealthy use them to avoid paying income tax.
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How the ULTRA WEALTHY get loans to buy cool stuff... - YouTube

Risks of Margin-Based Loans

  • The risks of margin-based loans are that if your portfolio drops in value, you may have to pay back the loan or risk losing your assets.
  • You need to be in accordance with the risk tolerance of the bank or company you're working with.
  • If you don't have the money to pay back the loan, they may sell your assets.
  • People can lose their assets and money on margin-based loans if they don't understand the risks.
  • Alex Hormozi uses margin-based loans for short-term transactions and repays them quickly.
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Conclusion

  • Margin-based loans are a useful tool for the ultra-wealthy to avoid taxes and get low-interest loans.
  • It's important to do your research and understand the risks before taking out a margin-based loan.
  • Alex Hormozi uses margin-based loans for short-term transactions and repays them quickly.
  • Margin-based loans can be a valuable tool for those who understand the risks and use them wisely.
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Why Alex Hormozi is not a big leverage proponent

  • Debt is a version of risk and exposes you to zero over a long enough time horizon.
  • He would rather not sacrifice what he has for more of something he doesn't want or necessarily need.
  • He is very under levered in general and focused on increasing the value of his assets.
  • He recommends borrowing significantly less than the limit if you want to use margin loans.
  • 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.
  • He wants to be a little smarter and try not to do what everyone else is doing so that he can have what no one else has.

Watch the video on YouTube:
How the ULTRA WEALTHY get loans to buy cool stuff... - YouTube

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