13 Everyday Money Deals Rich People Take Advantage Of

Cindy Lamothe   Tue, November 7, 2023

There are many ways to grow your wealth — and the rich know exactly how to do just that. They understand how to get the most out of their buck by taking advantage of everyday money deals we might overlook.

“These strategies, while more pronounced among the wealthy, can offer insights for individuals at all wealth levels to make informed financial decisions,” said Howard F. Goldman, finance specialist at Money4Loans.

Here’s a look at some of the ways they go about it.

Taking Advantage of Roth IRAs

“When you have a Roth IRA, you put in after tax dollars and don’t have to pay tax when you take the money out after you retire,” said Mark Chen, founder and CEO of BillSmart.

He notes that while most people can only put just a couple thousand a year in Roth IRAs, the wealthy can supercharge their contribution by putting in venture capital assets that have a low basis now but could be worth millions in a couple of years. “Especially if they know this will be the case.”

Borrowing Against Their Stock

Eventually, most people become rich because they own businesses and not from salaries and bonuses, said Chen.

 “One way that rich people unlock their business wealth is by borrowing against their stock. By doing so, they avoid selling their stock and having to pay capital gains and ordinary income.”

The interest rates charged by bankers for borrowing against their stock is usually quite low, Chen explains, and once the business owner dies, their stock is valued at the price at their death and the tax rate becomes a lot lower.

Infinite Credit Card Points

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/13-everyday-money-deals-rich-120023626.html