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Well, let's imagine I own say $3 billion in stock, which is not unheard of, but I'd call that mega wealthy.  Let's say I need $20 million a year in cash to live. Anything spent over that is buying assets, like another Gulfstream.  So, how many years can I borrow $20 million, pay the interest, and not run out?  This presumes the $3 billion doesn't appreciate, which generally it does.

And maybe every so often I sell some stock and pay it all back and taxes too.  Maybe every ten years I have an enormous tax bill.  Or not.

A feller can live pretty well on $20 million a year.  It's been done.

If you have $3 billion dollars you can just spend $20 million a year for 150 years and not take out a loan

there is no tax savings there


taking out $20 million a year from a loan is not avoiding taxes

would be better of investing in tax free bonds etc

[img width=499.988 height=499.988]https://i.imgur.com/V9m1U2E.png[/img]

How one might define "best" obviously is variable.  I personally would list something like Kansas or one of the Academies as "best".  If you could coacj, where would you like most to coach?  Stanford would make my list.  Washington?  UCSD?  Eastern Michigan?

This list just ebbs and flows with who is good.  20 years ago, Georgia, A&M, Clemson, and Alabama wouldn't be on it.  Some schools stay on it, but half of it is cyclical.  

If you want to spend your $3 billion, you have to sell stock and then pay taxes on that gain.

If you want to pay off your numerous $20M loans against the value of your holdings, you're going to have to sell stock and pay taxes anyway.

If you want to spend your $3 billion, you have to sell stock and then pay taxes on that gain.

how do these loans get paid back

do you really thing this guy would just pop by the bank and get another $20 million year after year and never have to pay it off

all Im saying rather then taking on a liability why not just cut out the middle man and draw down your funds

how do these loans get paid back

do you really thing this guy would just pop by the bank and get another $20 million year after year and never have to pay it off

all Im saying rather then taking on a liability why not just cut out the middle man and draw down your funds

Drawing down your funds involves selling assets which incurs taxes.  Loan income is non-taxable because it's not actually income, you have to pay interest.  When interest rates are at historical lows, and markets like real estate and some tech companies are at all time highs, then the interest is lower than the taxes you'd pay in liquidating.

But it's only a deferment strategy.  And in fact, taxes are still being paid because there has to be some income to pay off the interest.  The taxes simply aren't as high as they would be for capital gains.

It's a choice between paying some interest, which has been quite low on loans, and paying the tax man.  And yeah, these folks get loans easily because they have collateral which has a clear market value.  Here is the difference:

Sell $20 million in stock, pay capital gains taxes of nearly $7 million Federal lon LT cap gains, plus whatever the state charges.

Borrow $20 million at 1% interest, pay $200,000 a year to carry the loan.

It's called margin borrowing, it's pretty easy to do.  Very easy in fact, though I would be paying more like 6% at my loan size.

Meanwhile, you still own the stock which may well appreciate over time.

A margin loan need never be paid back barring a margin call.