Ever wondered how some billionaires fund such lavish lifestyles while paying little to no tax? It comes down to strategic borrowing: the use of leverage to fund spending and investing. Billionaires derive most of their income from asset appreciation rather than salaries or bonuses. Unlike ordinary income, asset appreciation isn’t taxed until a gain is realized through the sale of an asset. Borrowing to meet expenses, rather than selling off invested assets, has helped some wealthy individuals increase their overall net worth, especially in an environment of historically low interest rates and relatively strong equity markets. In this episode of Your Active Wealth, Rick Calero, head of banking and lending at BNY Wealth, explains this wealth building technique and more.For additional insights on the subjects that matter most to you, visit bny.com/wealth. Follow us on: Twitter | LinkedIn | Instagram

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