‘Buy, Borrow, Die’ Strategy Works for the Super-Wealthy, Despite Bezos Saying It Isn’t Real

     

     What is the ‘buy, borrow, die’ strategy to optimize wealth? According to an article in Moneywise:

“The aptly named “buy, borrow, die” strategy was developed by Professor Edward J. McCaffery in the 1990s to describe how rich people get — and stay — rich by paying less in taxes.”

“Buy, borrow, die” is a strategy in which wealthy people accumulate appreciating assets, borrow against them and use the estate to pay off the debt after they die. It works because of how taxes are assessed: Not every financial move is a taxable event.”

“Buy a car? Generally, you’ll pay taxes. Earn money? Pay taxes. Sell $62 billion in stocks? That’s a taxable event. But if you borrow money against those stocks — as Elon Musk did to buy Twitter in 2022 — that’s debt, not income and it isn’t taxed.”

“In addition to avoiding taxable events, the “buy, borrow, die” strategy also allows whatever assets you borrow against to continue to appreciate, making you even more money. And while you’ll obviously pay interest on the loan, for the uber-wealthy, the math can still work out in their favor.”

     Jeff Bezos has claimed the strategy is not real and not used by the wealthy, despite evidence to the contrary. Elon Musk and Larry Ellison are thought to use the strategy.

“The highest income tax bracket, for those earning over $640,601, is 37% (4) but interest rates on loans are typically much lower. In Musk’s case, he would likely have paid capital gains tax had he sold his stocks, which are typically taxed at around 20% (5) — still higher than most interest rates.”

     What irks me about this is that only the wealthy, and specifically the super-wealthy, can and often do benefit from this. The strategy is not available to most investors. The super-wealthy can easily provide collateral for any kind of loan and often provide it in stock. They are already significantly undertaxed, and this strategy allows them to avoid even more taxes. The strategy works best when interest rates are lower since it is interest that is paid instead of taxes. New policies, such as taxing certain loans or loan amounts, could limit the strategy, but no such policies are currently under consideration. The practice also irks me because the world’s wealthiest humans are able to increase their own wealth through this loophole and increase overall wealth inequality, which is already beyond absurd levels. It is effectively a wealth preservation strategy available exclusively to the super-wealthy. 

     Below is a Microsoft CoPilot summary of the practice:

 

References:

 

What is this 'buy, borrow, die' strategy that everyone keeps talking about — and that billionaires like Jeff Bezos deny? Aditi Ganguly. Moneywise. June 10, 2026. What is this 'buy, borrow, die' strategy that everyone keeps talking about — and that billionaires like Jeff Bezos deny?