“Oh, he doesn’t actually have all that money; it’s vested in other stuff.”

MoneyScout: How the Wealthy hide their money - Buy Borrow Die and SBLOC

Yeah, but the bank that writes the loans for him to use to avoid ever paying taxes doesn’t care.

Buy, borrow, die. Putting loans on unrealized gains is so fucking stupid. (Like the fact it’s allowed is stupid, I mean financial strategies it’s brilliant, but very very corrupt).

Thing is, so long as your return on investment is greater than your interest charges, you can use the cash you borrowed to buy more stocks. They aren’t getting regular market loans like you and me when we need a loan for a car or something; they're often getting loans down to 5-6% for hundreds of thousands of dollars. As a matter of fact, the rates actually are at 6.5% with smaller balance loans at upwards of 10% - meaning they want you to borrow more and be even more wealthy just to get lower interest. For context, the average credit card interest rate is 20%.

Back in 2010 and early 2020, rates were cut and they were getting loans for 1-2%. Even at a credit union, a credit card lowest I’ve ever seen is 8% and that’s on a loyal customer with excellent credit and financing. This would be why there is so much pressure to get a loyalist in the Federal Reserve to artificially slash interest rates. Artificially cheap money doesn't crash the market, it supercharges it for the wealthy while driving up inflation for everyone else. It allows the elites to borrow at practically zero percent and use that ultra-cheap debt to buy up real estate, swallow smaller competition, and consolidate individual assets.

You have to work and sweat and scrape by to earn what, $60,000 a year? A billionaire calls his personal banker to take out an SBLOC (Securities-Backed Line of Credit) and, in 15 minutes, has cash for more than you will earn in 10 years from a loan he’s just taken out.

Note: Most lenders for SBLOCs require a minimum portfolio of $143k-$250k, with an initial line of credit starting at $100k.

[Source: Amerisbank]

And if you can keep taking out loans against your portfolio until you die, the underlying stock accounts holding that wealth completely bypass the estate process, so long as you've named beneficiaries. Then the step-up cost basis kicks in and says that whatever those stocks are currently valued at is now assumed to be the price the beneficiaries "bought" (inherited) them at.

So if your grandpa bought a stock for $1 and it went up to $100, and he sold it, he would be taxed on the $99 difference.

Note: when a stock is purchased it is considered “unrealized” meaning its value is subject to change based on market valuation. When a stock is sold, it is considered “realized” and becomes a taxable event, counting the realized gains (or realized losses) towards your income. Yes, the same kind of income that you get taxed on when you file your W-2.

But if he doesn’t sell and you inherit it, step-up cost basis kicks in. If it grows from $100 to $150 and you decide to sell, you’re only taxed on $50 of realized gains, not what the stock was when it was first bought for $1.

Buy, borrow, die, step-up cost basis, and being allowed to borrow on unrealized gains is the problem. It’s just a few of the big loopholes that allow the wealthy to avoid paying taxes.

You want to know the real fucked part?

The Probate (the legal court process of distributing assets) process as I mentioned earlier gets skipped because they have designated beneficiaries. Normally when someone dies, the probate process kicks in, collects the assets, taxes them (if more than $15 million in assets, $30 million for married couples, thanks to the Big Beautiful Bill passed in 2025), and then disperses the remaining assets to the beneficiaries. 

But this is a lengthy process that everyday working-class people have to deal with before they even see a dime of inheritance, all because the tools to writing a trust and will and deed, and the knowledge about these systems, are kept out of the hands of the working class.

To form a will and a simple trust often costs thousands of dollars. Nowadays you can probably get it done for about $500, but you still have to file the paperwork yourself and hope you set it up correctly, something that most families, who can’t even cover a sudden $500 expense, do not put as a priority.

Note: Assigning beneficiaries is normally free to do on your assets including your checking account, investments, and property. For the love of god, go assign beneficiaries. The state will likely assume your wife and then next of kin, but it’s a lengthy process

If a billionaire dies, the IRS still counts assets with named beneficiaries. To avoid the 40% Estate Tax, billionaires don't just use simple trusts; they use highly complex Irrevocable Trusts (with names like GRATs, SLATs, and Dynasty Trusts). These specialized legal structures effectively freeze the value of their assets and move them completely out of their legal ownership before they die, starving the IRS of estate tax revenue. 

So the simple trust doesn’t get done. Marriages fight, divorces split assets, kids leave the nest, and no one wants grandma's house when she dies. So it gets sold and split off to the middle generation who has been so squeezed that there’s a good chance their only hope of retirement is what their parents leave them, like some form of stump to rest at in the end of the giving tree.

But even that stump is being uprooted.

There is a massive, quiet theft happening right now where privatized nursing homes and Medicaid estate recovery swoop in at the end of life, squeezing residents for every dime until every ounce of middle-class wealth has been exsanguinated back to the bloodthirsty elites.

The wealthy elite do not care about destroying the dam that floods the valley of the working class, for they sit on the top of the mountain of money and will never get wet. And when the flood passes, they will buy up all the land and rent it back to us, further extracting more and more wealth. Welcome to the Gilded Age 2.0.

(But more on exactly how the healthcare and nursing home industry aids in that wealth extraction in my next post).