Happy Monday,

Angelo here! Welcome to New Money, where we go over weekly tips to help you build your wealth, one dollar at a time.

My accountant just told me I have to pay over $100,000+ in taxes….

Insane!

I probably only do a fraction of what I can do for my taxes to here is a part of the research I’ve done so that this never happens again.

Today’s edition:

• How the rich play a different money game

• Long-term ownership actually wins

• AI tariffs, billion-dollar deals and more…

Read time: 3 min 10 seconds

💰 Wealth Tip of the Week

The way money is usually explained is simple:

You work → you earn income → you get taxed → you live on what’s left.

But for the ultra-wealthy, income is actually the slowest way to build wealth.

For example, in the U.S., high earners can lose up to 37% of their income to federal taxes alone. Add state and payroll taxes, and a large portion of what you “earned” disappears before it ever has a chance to grow.

That’s why the wealthy approach money differently.

There’s a name for this framework: the Buy, Borrow, Die loop.

It sounds extreme but in simple terms, owning assets that grow and letting time do the work.

And I'll walk you through how this works simply, so you can use it in real life to build your wealth.

1. Why Income Is a Tax Trap

When you earn income, a large chunk disappears to taxes right away.

In fact, wages make up the majority of federal tax revenue, while capital income is taxed at much lower rates— and unrealized gains aren’t taxed until they’re sold.

But when wealth grows inside assets you own: stocks, real estate, businesses, that growth compounds 

quietly in the background without triggering taxes each year.

That’s why many wealthy individuals keep salaries relatively low and focus on equity instead.

2. Buy: Own Things That Grow

The first step of the framework is simple: own assets that tend to grow over time.

Stocks. Real estate. Businesses.

The goal is to hold them long enough for compounding to work.

For example, If you buy a house for $100,000 and it grows to $1 million over 20 years,

you don't owe taxes on that $900,000 gain until you sell.

It's an "unrealized gain," and the IRS doesn't care about it.

The same applies to stocks. If a portfolio grows from $10,000 to $100,000,

that $90,000 gain isn’t taxed while it remains invested.

This is how billionaires can make billions in a year and pay zero in taxes.

Their wealth is growing inside assets, not showing up as taxable income.

Here’s how you can do it:

• Start with low-cost index funds (S&P 500 averages ~10% annually)

• Hold investments long-term (over 1 year = lower tax rates when you do sell)

• Prioritize assets over lifestyle upgrades

If you want to see what this looks like in real life, I shared my investment portfolio results after 6 years! 👉 Watch the video here

3. Borrow: Get Cash Without Selling

Borrowing only makes sense when it helps expand or protect what you already own.

This is where ownership changes the rules.

Instead of selling assets to access cash, the wealthy borrow against what they own.

Imagine you own $50,000 in real estate or stocks.

You go to a bank and say, "I want cash, but I don't want to sell."

The bank lends you money based on what you own:

• 50% loan-to-value for stocks

• 60-70% for real estate

So $50,000 in real estate might give you access to roughly $30,000–$35,000, 

often at lower interest rates because the loan is backed by an asset.

Loan proceeds aren't taxable income. And the asset you borrowed against can continue to grow.

As long as assets grow faster than the interest cost, borrowing helps preserve — and sometimes expand wealth.

Here’s how to think about it when the time comes:

• If you own a home: Consider a HELOC (5-8% rates) for strategic investments

• If you have stocks: Research Securities-Backed Lines of Credit (3-5% rates)

• Only borrow if your assets grow faster than your interest rate

4. Die: Reset Everything

The final phase is about what happens when assets are held long enough.

When assets are passed down, the tax system often resets their value to current market prices. 

This is called a step-up in basis.

Decades of growth may never be taxed.

This applies to stocks, real estate, businesses, and other long-term assets.

Long-term ownership is rewarded far more than short-term effort.

Most people never benefit because they sell too early, panic too often, or never build ownership at all.

What this really comes down to is long-term thinking:

• Think in decades—the longer you hold assets, the more powerful step-up in basis becomes

• Consider trusts for estate planning (consult an attorney)

• If inheriting assets: Don't sell immediately unless necessary

The key is shifting from income-maximization to asset-ownership thinking.

If this changed how you think about wealth, hit reply.

I’d love to hear what part surprised you most.

📉 Market Recap

Check out some of the biggest stories shaking up money, markets, and momentum this week.

• JPMorgan topped earnings, with trading doing the heavy lifting

• Trump signed 25% cut of AI chip exports, protecting U.S. tech

• OpenAI signed a $10B computing deal with Cerebras to power future AI growth

• Oracle sued by bondholders over losses tied to AI expansion

👀 In Case You Missed It

I want to walk you through how I built a $700,000+ net worth by 24 and this might change how you see money.

See y’all next week 🫡

- Angelo Castillo

Disclaimer: This is not financial advice or investment recommendations. The content is for informational purposes only, and it should not be considered as legal, tax, investment, financial, or other advice.

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