Comment on Title
TigerAce@lemmy.dbzer0.com 1 week agoI would just lock it all up in a vault. Why would I need to liquidate it? I can take loans from the bank indefinitely, as I have the gold as insurance. That’s what billionaires do as well, to avoid taxes. They use their wealth in stock as insurance to take out loans, because on loads you don’t pay taxes. But in my case I would pay taxes for the value of the gold, like a decent person.
Ok, but… what if the bank asks where you got the gold? If you have proof you came by it legally, and then the IRS notices you have a bunch of outstanding loans collateralized with an asset they have no record of you obtaining or paying taxes on the income used to obtain it.
Like… with the cash, you just… spend it on stuff. If you need to pay for something not in cash, then just open a cash based business and overstate your sales.
Where would you use all that cash? In my country you’re not allowed to make purchases over 3k. Payments bigger than that are rejected and authorities are notified.
I was assuming the prize was legit, which would also mean you’d have to pay taxes over it. Than you have it legally and you can use it to take out loans.
TranscendentalEmpire@lemmy.today 1 week ago
There is such a thing as a gold loan, but it’s not really a good deal compared to even something like a HELOC loan. The interest rates are much higher, and they’ll usually only loan out 50% of the value of the gold, and you’ll have to hand it over to the bank for storage.
The main problem with this is that you don’t have an income or a way to make more gold like billionaires can with stock. So you would have to eventually sell some of the gold to pay the loan. Which would entail not only paying interest on the loan, but a 28% tax on the gold. You don’t have a skeem like capital gains to lower your tax burden with a physical commodity.
TigerAce@lemmy.dbzer0.com 1 week ago
Take out the loan. Invest it into stock. Get another loan to pay off the previous loan and living money. Continue indefinitely. Problem solved. Make more money, without touching the gold. Invest everything extra you make into more stock.
TranscendentalEmpire@lemmy.today 1 week ago
Right, but for the loan amount you are going to lose 50% more than you borrow in gold. So if you want a million dollar loan, you’ll have to give the bank 2 million in gold to hold as collateral. You’re also going to be paying 10-30% apy on your short term loan.
If you start with let’s say 80 million in gold, you will only have enough collateral to secure 40 million in loans in total. Which at a 10% apy would occur 4 million in interest a year without accounting for any compounding interest.
If you did this perfectly and did not spend any of the money you borrowed for anything other than paying loans, you would only be able to do this for 10 years…not indefinitely. And that is giving you the lowest interest rate available.
Even if you invested in stock that you made money on, that earnings would be taxed at 20-30% depending on how long you had it for. So you are paying 10- 30 percent in interest to invest in a profit that gets taxed an addition 20-30%… It would be better to just have the cash.
TigerAce@lemmy.dbzer0.com 1 week ago
Ok fine, keep the gold. Too complicated for me.