ilmscore | Prediction Details
"The Elon method, which is now where you don't take out an income from your business, but rather you use debt to finance your lifestyle. So one of the things that Elon made really popular was the fact that he doesn't earn an income, a salary income from Tesla. He gets paid in stock options. What that means is he owns a lot of Tesla stock, billions and billions of dollars worth of Tesla stock, but this isn't cash in his bank account. So now if he wanted to actually receive any cash, he had two options: he could one, go out and sell this Tesla stock, but as soon as he sold this Tesla stock, he'd have a huge taxable income because he created Tesla. So his basis in the Tesla stock is very low. So if he sold his Tesla stock for a huge profit, which is what he'd be doing, he'd have a big taxable income. Option number two is he can refinance out of his Tesla stock. He can use debt against the value of his Tesla stock stock and use his debt to pay for his lifestyle because debt isn't taxable."
By Minority Mindset | November 12, 2023 | Pending
From video
How The Wealthy Pay No Taxes (And How You Can Too) | Jaspreet Singh 00:10:33 - 00:11:33
Interpreted Prediction
Instead of taking a salary, individuals can leverage the value of their business or assets (like stock) to take out debt, which can then be used to finance their lifestyle tax-free. This is exemplified by Elon Musk's strategy of borrowing against his Tesla stock instead of selling it to avoid immediate taxable income.

Prediction Details

Topic
Leveraging Debt Against Business Value

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