When a ProPublica investigation revealed tax data from some of the richest men in the United States in 2021, millions of people asked themselves the same question. How was it possible that fortunes such as those of Jeff Bezos, Elon Musk and Warren Buffett had grown by tens of billions of dollars while their tax bills appeared to be far lower than the pace of their wealth accumulation?

The controversy was immediate. Some interpreted it as proof that the tax system favours the wealthy. Others argued that it simply exposed a reality that most people are unaware of: great fortunes do not operate in the same way as household finances.

The answer to this apparent contradiction can be summed up in a well-known Wall Street expression: Buy, Borrow, Die. Three words that describe one of the most effective wealth-preservation strategies ever devised.

This is neither an illegal mechanism nor a hidden loophole. It is a direct consequence of how assets, credit and taxation work in modern economies.

Fortunes do not live on money, but on assets

When we think about a billionaire, we often imagine vast amounts of cash sitting in bank accounts. The reality, however, is very different. Most great fortunes are not made up of cash, but of assets.

Jeff Bezos built his fortune through the value of Amazon shares. Elon Musk concentrates much of his wealth in his stakes in Tesla and SpaceX. Warren Buffett accumulated his fortune through Berkshire Hathaway. In all of these cases, wealth is not primarily liquid cash, but assets that increase in value over time.

This distinction is crucial because assets are treated differently from salaries for tax purposes. When someone receives a salary, they generate income that is taxed almost immediately. By contrast, when a stock, a company or a property appreciates in value, that increase does not usually generate taxes until a sale takes place.

This is where the logic of Buy, Borrow, Die begins to make sense. Great fortunes do not need to constantly sell their assets in order to feel wealthy. Precisely because these assets continue to increase in value, selling them is often the least attractive option.

Why selling is the last resort

Imagine a founder who owns shares worth one billion euros. If those shares have multiplied in value over many years, selling even a portion of them would trigger taxes on the accumulated gains.

For most people, this is perfectly normal. But for a large fortune, selling comes with a double cost. On the one hand, it generates a significant tax bill. On the other, it reduces the very assets that continue to produce wealth.

For this reason, many wealthy individuals try to avoid selling whenever possible. Their objective is not only to preserve the wealth they have already accumulated, but also to continue benefiting from the future appreciation of their assets.

The question is inevitable: if they do not sell, how do they obtain the money they need to invest, buy property or maintain an extraordinarily high standard of living?

The answer lies in the second word of the formula.

When debt becomes a tool

For many families, going into debt is a necessity. Loans are taken out because there are not enough resources available to purchase a home, a vehicle or cover a major expense. For large fortunes, however, debt can become a strategic tool.

Banks are willing to lend enormous amounts of money to people who control assets worth hundreds or even thousands of millions of euros. Company shares, investment portfolios and other assets can be used as collateral for these loans. This makes it possible to obtain liquidity without selling anything.

The billionaire remains the owner of their shares, continues to benefit from their appreciation and, at the same time, has access to the money needed to finance new investments or personal expenses.

The key difference is that a loan is not considered income. It is debt. And that distinction is crucial from a tax perspective. As long as the value of the assets continues to grow at a rate that exceeds the cost of the interest, the strategy works. It is a logic that may seem counterintuitive to many people, but it explains why debt does not carry the same meaning for an ordinary household as it does for a great fortune.

The third piece: inheritance

The least understood part of the strategy comes at the end of the process.

In the United States there is a tax mechanism known as step-up in basis. Without going into excessive technical detail, this system allows inherited assets to update their tax value at the time they are transferred to heirs.

In practice, this means that a significant portion of the capital gains accumulated during the owner’s lifetime may not be taxed in the same way they would have been if the assets had been sold while the owner was alive.

This is where the Buy, Borrow, Die model reveals its full power. First, assets are accumulated. Then, they are used as collateral to obtain liquidity. Finally, those assets are transferred to the next generation under tax conditions that can be far more favourable than a traditional sale.

It is no coincidence that this strategy is often associated with large family fortunes, technology company founders, Wall Street investors and wealth-management structures specifically designed to preserve assets over decades.

A debate that divides economists and politicians

As might be expected, Buy, Borrow, Die generates intense debate.

Its supporters argue that unrealised gains should not be taxed and that these practices are a logical consequence of the way financial markets operate. They also point out that asset-backed lending is a perfectly legal tool used by companies and investors around the world.

Critics, on the other hand, argue that this model allows large fortunes to pay proportionally less tax than many people who depend exclusively on income from their work. From their perspective, the system encourages wealth concentration and makes it easier for large fortunes to pass from one generation to the next with a relatively low tax burden.

Beyond ideology, the debate highlights an uncomfortable reality: money does not behave in the same way when it comes from labour as when it comes from wealth.

What it teaches us about money

The most interesting thing about Buy, Borrow, Die is not that it exists. The most interesting thing is that most people have never heard of it. For decades, financial education has focused primarily on concepts such as saving, loans and household budgeting. All of these are important, but they explain only part of the system.

To understand how great fortunes are built and preserved, it is also necessary to understand the role of assets, capital gains, asset-backed lending and wealth transfer. It is in this territory that some of the greatest differences emerge between those who simply work for money and those who manage to make money work for them. The great lesson of Buy, Borrow, Die is not that there is a magical formula for becoming rich. The real lesson is that the rules governing money are far more complex than most people realise.

Financial knowledge is freedom

Buy, Borrow, Die is not a strategy that most people can apply in the same way as a billionaire. Yet understanding it is important because it reveals how the financial system truly works when wealth is built around assets rather than wages.

The most important lesson of this strategy is not that there is a way to pay less tax or preserve vast fortunes. The real lesson is that the rules governing money are often far more complex than we have been led to believe. While part of society learns how to use these rules to its advantage, most people are not even aware that they exist.

In this way, financial education should form part of every citizen’s general culture. Not to turn ourselves into billionaires or to replicate the strategies of large fortunes, but because understanding concepts such as debt, assets, taxation, inflation or money creation helps us better interpret the economic world around us and make more informed decisions about our future. Because, ultimately, economic freedom does not begin with wealth; rather, it begins with knowledge. And only when we understand the rules of the game can we aspire to make truly free decisions.

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