Defer, Defer, Delete: The Sage Method for a $0 Tax Bill | Ep. 13

Taxes are the biggest destroyer of wealth, not because of how much Uncle Sam takes, but because of when he takes it. Not only do taxes reduce your returns, but they also interrupt compound, which over time can lead to millions of dollars in missed gains, and that’s money left on the table. In this podcast episode, I’m going to show you a simple principle with the top 1% of investors’ use to continually defer paying taxes, keeping more of their capital at work. Welcome back to the Sage Investor, I’m Brian Spear, and my mission is to help you generate cash flow and build legacy wealth in a tax-efficient manner, because that’s what I’m trying to do for my family, and I’m sharing all the secrets that I’m learning along the way. Today, we’re going to unpack that sequence, not as tax advice, but as a way of thinking about how long capital is allowed to compound before taxation interrupts that compounding. Taxes kill compounding, so Sage Investors defer, defer, delete. So in this episode, I’m going to show you how to defer taxes, and if you stick around to the very end, I’m going to show you how to delete your tax bill altogether. Charlie Munger had it right when he said, we don’t pay taxes, we defer them indefinitely. Here’s an example of how taxes can kill millions of dollars in gains. Imagine two different investors that make the same exact investment, both of them earn 10% per year, same deal, same return, same discipline. But there’s one difference. Investor A compounds uninterrupted. They defer taxes, and they pay them only once after 40 years. Investor B pays taxes every single year on their gains, and that annual tax drag knocks down their effective return to about 8% per year. Watch what happens. Both of them start with a million dollars, and if you compound $1 million at 10% for 40 years, you end up with roughly $45 million. But if taxes interrupt compounding, and you only compound at 8% on an annual basis, after 40 years, you end up with only $22 million. Same investment, same starting capital, but the investor who paid taxes every year ends up with about $23 million less, and here’s the lesson. Taxes don’t just reduce returns. They break the compounding engine. Taxes compound in reverse. Every time money leaves the system to pay taxes, the snowball shrinks. And over decades, that shrinking snowball can cost you tens of millions of dollars. Warren Buffett’s been running his playbook to great effect for literally 65 years. He’s never paid taxes for 65 years over at Berkshire Hathaway. And the reason is, he never makes an outbound distribution in the form of a dividend to his partners. Why? Once the capital ultimately transitions from his subsidiary businesses up to Berkshire Hathaway, he does not make distributions because he does not want to kill the compounding. If he were to send that cash out to partners, he would have a significantly smaller snowball and significantly lower amount of principle to allow the compound effect to take place. He’d much prefer to defer, defer, defer, never pay taxes, and he’s implemented that business model to great effect for 65 years, and the results take care of themselves. He’s built a business from $0 to $1 trillion in one lifetime, and a huge percentage of that is because he never kills the compounding. So we’ve taken those sage investment principles, deriving from Warren Buffett and Charlie Munger, the world’s greatest capital allocators, and we’ve ultimately implemented that strategy into our essential use real estate platform over at Sunrise. And we’ve coined it the sage principle, defer, defer, delete. The first step in the defer, defer, defer principle begins with depreciation. Depreciation might be the closest thing that investors have to a superpower because it allows you to actually show a loss on paper while the asset that you’ve purchased is producing real cold hard cash. The government created a tax code to ultimately encourage certain behaviors. The tax code is not just a rulebook, it is an incentive system, and you really have to think of the IRS as your silent partner. If you look at the IRS code, the first maybe 15-20 pages are really describing how much tax you have to ultimately pay, and the next several thousand pages inside of the tax code share ways in which you can avoid paying that tax by doing the behaviors that the government wants to incentivize. Everyone in this country knows that we’re in an affordable housing crisis, and they need significantly more affordable housing. They want people to invest to create housing in the marketplace. So they afford you the luxury of being able to appreciate a large percentage of any investment that you make in a real estate endeavor. So how does it work in the real world? Mobile home parks are typically about twice as tax-advantaged as traditional apartment buildings. And so when we go out and we buy a mobile home park, let’s say we bought a $1 million mobile home park. Typically about 20% of that purchase price is allocated to land. You can’t depreciate land, but the government knows that when you purchase anything, whether it’s an apartment building or an office building or a mobile home park, the tangible items that you’re purchasing ultimately depreciate and value over time. So when you purchase an apartment building by way of example, it’s depreciated over a 27 and a half year horizon. It’s an arbitrary number that the government put into the code. And so if you were going to use a straight line depreciation, whatever the total purchase price of your asset was, you would take one 27 and a half of that purchase price and depreciate it year over year until that depreciation schedule is completely exhausted. But in a mobile home park, when you’re buying a mobile home park, what are you actually purchasing? We like to say that we like to operate in a mobile home park like a parking lot. So we’re buying the land, but we don’t like to own the homes. So what are we actually purchasing in terms of tangible assets? We’re actually buying the infrastructure, the roads, the curbs, the gutters, the water lines, the sewer lines. All of those have a separate depreciation schedule than that which you would find in traditional commercial real estate. Commercial real estate is traditionally depreciated over the course of 39 years. So office buildings, big blocks of concrete and the like, depreciated over 39 years, industrial and so on and so forth. Residential is typically, you know, whether it’s a single family home or it’s an apartment complex, typically depreciated over 27 and a half years. But the infrastructure that we’re referring to here is known as capital improvements and those have a 15 year depreciation schedule. This is beneficial because you can depreciate it quicker and benefit from the time value of money. But what is even more unbelievably powerful and why depreciation is now a superpower is because of what occurred in 2017 when Trump ultimately put forward the Tax Cuts and Jobs Act which instituted 100% accelerated bonus depreciation. And then in 2025 with the passage of the Big Beautiful Bill, it’s solidified 100% accelerated bonus depreciation as a permanent part of the tax code. When you buy a $1 million mobile home park, 20% of it is allocated to land which you cannot depreciate. The other $800,000, the vast majority of that is allocated to capital improvements on a shorter live asset and per the Big Beautiful Bill, anything that has a 20 year depreciation schedule or less can be accelerated into the very first year via accelerated bonus depreciation. So on average across the board and all the mobile home parks that we buy on average, if we buy a million dollar mobile home park, typically about $700,000 of that mobile home park is depreciated in the very first year. That is magic. Why? Because that depreciation is not actually occurring in real life. The water lines and the sewer lines and the roads, they’re not all going to literally evaporate in your one. However, you get to act as if that is the case and you get to take this gigantic phantom loss, which allows you to basically shield any of the cash flows that the properties are throwing off and any of the additional gains those properties throw off for many, many, many, many, many, many, many years into the future. This is why when we’re making outbound distributions to any owners along the way, typically for the first numerous years of the investment, any of the outbound distributions to partners are completely tax-free because they’re offset by this massive passive loss. How does this play out with partners? We’ve got some really successful sophisticated folks that have ultimately allocated capital with us over time. The example that I like to share is we have a physician who’s invested with us for numerous years and he has a spouse that is a real estate professional, very intelligent, who ends up overseeing the entirety of their real estate portfolio. And it’s very, very beneficial. They’ve structured their family in an exceedingly tax-efficient manner. So they have a very tax-efficient structure. He as the physician earns seven figures, but he also owns multiple practices in the vicinity. So he actually earns multiple seven figures. And as such, he has a huge tax bill. Every single incremental dollar that he makes about half of that goes to Uncle Sam on an annual basis. It feels like you’re getting penalized for every single, you know, all the hard work that you’re putting in along the way. So he’s trying to find ways to ultimately minimize that tax bill. Basically, every single year for many years now, he’s invested around a million dollars inside of, you know, a current investment opportunity that we have. And on average across the board over the last seven years and, you know, one of our mobile home park funds, what has occurred is he’s received an average of passive loss of roughly 90% of his investment amount. So as you can imagine, when somebody invests a million dollars on their K one, they’re receiving a passive loss of $900,000 by virtue of investing that capital in affordable housing, which the, which the country so badly needs. Now he’s able to report to the government that in this investment, he’s losing $900,000 when in actuality. We’re actually throwing off real cold hard cash flow, the mobile home parks are increasing in value, but he’s able to report to the government that he’s losing $900,000. The reason this is so unbelievably powerful is because his wife is a real estate professional. And so she has the luxury of ultimately taking the losses because she’s making the investment she can take the losses from her real estate investment and offset his past passive income. So what does this mean for somebody who’s able to write off $900,000 of income and they’re in the 50% tax bracket, that is the equivalent of that family earning an after tax cash on cash return of $450,000 or 45% after tax yield in year one. And we haven’t even begun to send him outbound distributions from cash flow or from the equity growth in the properties over time. Depreciation is a superpower. You can see the unbelievable benefit that folks can utilize if they structure their family’s fares in a tax efficient manner. Now, not everyone has the luxury of benefiting from a real estate professional status. This is not the time to dig into that, but I would implore you to go check it out and see if that’s something that you might be able to benefit from. It is truly one of the most beneficial sections of the tax code in my humble opinion. Regardless, if you don’t have the luxury of using all those passive losses in year one and you don’t have the luxury of being a real estate professional and offsetting all of your other passive income, deriving from this investment or other passive investments that you have inside of your portfolio, what would occur is that all of the passive losses would ultimately carry forward is a net operating loss carry forward so that if and when the additional distributions and the profits would be generated from that mobile home park investment, you would eventually simply use those net operating loss carry forward passive losses to offset the additional income derived in year two, year three, year four, year five, et cetera for many, many years into the future. And that’s why these investments are so unbelievably tax efficient. Either way, you know, it’s kind of a heads eye when tails you lose, when you’re leveraging depreciation because depreciation is truly a superpower. And that’s the first step in defer, defer, delete. And the second step in defer, defer, delete, the principle is ultimately to defer again, you know, the next level of tax efficiency comes from understanding a simple truth. You don’t always need to sell an asset to access its value. When you’re buying a deal, you know, the goal is obviously to increase the revenue after after you close it to go ahead minimize expenses operate efficiently in doing so we’re driving the NOI. We’re trying to increase the value of the property. And if you do it correctly, a handful of years down the road, the value of the asset that you required is worth more. Congratulations, you’ve done a great job. Now the question becomes you’ve created some equity on the balance sheet, some sweat equity along the way. How do you access that equity? How do you access it? Because it’s great to get a good return on investment, but you also want to ensure that you’re generating a good return on equity. A lot of folks ultimately want to access that capital by virtue of selling. But if you do so, you stop the compounding. There’s so many reasons to avoid doing that like the play. Enter the cash out refinance. The best way to ultimately trap access that trap equity is to simply recycle the capital, simply go to another lender, do a cash out refinance, take the capital out in a non-taxable event in this manner, highlighting again, defer, you’re deferring the tax bill, you’re kicking the can, you’re keeping more of the principle working for you, which allows you to continue to compound over exceedingly long periods of time. And if you do this correctly, you drive enough value, you do a cash out refinance, if you’ve taken enough cash flow, you’ve taken enough cash out refinance proceeds along the way, you’ll eventually get all of your original capital back, get all the chips off the table and you’ll be playing with the house’s money. In this manner, you have the luxury of taking that original investment dollar, going and buying another investment and beginning to create a version of a snowball where you have multiple streams of income generated off of that original investment dollar. And in the second investment, you’ll eventually be able to do the same thing where you have the luxury of eventually getting all the chips off the table so long as you don’t sell that, do another cash out refinance, you have multiple streams of income, you’re now beginning to build a compounding engine, a tax efficient compounding engine over the long term. It’s the most efficient way to ultimately build wealth over time. We’re trying to generate cash flow and build legacy wealth in a tax efficient manner and implementing the principle of deferred deferred delete is an instrumental piece of that puzzle. So take a step and just think about your personal portfolio, take a step, take a breath and think about your personal portfolio. Do you have any assets, any investments that you’ve ultimately made over time that have increased in value significantly where you’ve got some unrealized games on the balance sheet? And is there any way that you could ultimately tap into that? Is there any way that you could redeploy that equity without interrupting the compounding along the way? Or do you actually need the liquidity, right? That ultimately puts you in a precarious situation. You don’t want to have forced selling events. Is there any way that you could ultimately redeploy that equity in a tax efficient manner? That’s what you should be thinking about so you can keep the compounding working. So far we’ve covered the first two dimensions of deferred. We’ve talked about first using depreciation to reduce taxes on income. And then secondarily, we talked about accessing equity through refinancing without having to sell the assets. But eventually every investor ends up facing the next decision, right? What happens when you hear an actual legitimate sell signal in the marketplace when a sell signal appears? You guessed it, you defer again. Again, defer, defer, defer, delete, you’re going to try to keep kicking the can as long as humanly possible. When you hear a legitimate sell signal, you still want to defer. You still want to kick the can on paying the tax man. And if you don’t know what I’m talking about when I say hear the three sell signals, you got to go check out episode 12 to understand that more deeply. But when you hear that, here’s what the deal is. When that happens, you hear a legitimate sell signal. The goal becomes exiting the investment as tax efficiently as possible. Why? Because selling is the enemy activity is the enemy selling introduces friction costs every time you sell an investment, your principle gets crushed by four different friction points. Why? One is taxes, okay? You’re going to get crushed by depreciation recapture. You’re going to get crushed by capital gains taxes along the way. Secondarily, you’re going to get crushed by transaction costs. There’s loan fees, broker fees. I can tell you if you sell a property for a million bucks, you’re not walking away with a million dollars in your pocket. There’s going to be a lot of people trying to get at that transaction. You’re not going to have a million dollars, a principle base at the end of the day. Third, there’s cash drag between when you sell deal A and when you buy deal B and monger would crush you for killing the compounding. But most importantly of all, there is reinvestment risk. When you sell an asset, you want to go invest in something else. You have to. You can’t put the capital under the mattress. So you got to go invest in something else, but there’s always massive reinvestment risk. You’re leaving an asset that feasibly you know you like your trust into something else that ultimately will have some semblance of risk. So we try to avoid that like the plague activity is the enemy selling introduces friction. So if and when you ever have to sell you need to sell because you’ve heard one of those three sell signals. Then you’ve got to find a way to exit as tax efficiently as possible. There’s a handful of ways to do this. I’ll go through a handful of them off the top. Everybody’s largely familiar with 1031 exchanges. If you’re familiar with real estate, you’re familiar with 1031 exchanges, which are very beneficial. If you could sell deal A, kick the can on the tax man, bring in a 1031 exchange custodian, go buy another asset. This is beneficial because you can kick the can on capital gains tax. You can avoid that piece from Uncle Sam. But there’s a couple of problems with it. One, you can’t avoid depreciation recapture tax. That’s a pretty fat flat tax, which are still going to have reduce your principal base. That’s not beneficial. Secondarily, there’s a timing crunch. So now you’ve got a lot of pressure on your investment, which amplifies the reinvestment risk. So it’s not optimal. But if you’re going to sell a 1031 is an option. I will say, however, one of the things that folks often end up doing throughout the course of their investment lifetime is that in order to build some wealth, they’ve taken a little bit more of an active position. But at the end of the rainbow, most folks realize they want to move away in the in the Robert Kiyosaki cash flow quadrant. They want to get over to the investor bucket. And when I say investment bucket investor bucket, I’m not talking about just owning real estate because owning real estate can be a job. That’s kind of active passive investing, right? If you own, I’ve got tons of guys that have ultimately, you know, had conversations with over time and ultimately have invested with us that own 10, 20, 30, 40 houses. Okay. Ask them if investing in real estate is passive. The amount of time that they’ve spent unclogging toilets driving around dealing with tenants, toilets, termites. Do they think that that’s passive? I can promise you that they don’t. So when you do a 10, 31 exchange, you’re typically having to go buy something that is an active investment. This is a downside if you’re trying to ultimately facilitate passive income, real passive income. So you have freedom of time, freedom of money, freedom of relationship, freedom of purpose. Rather, should you choose to go down that path? Another option is a DST, a Delaware statutory trust. It affords you the luxury of ultimately doing a version of a 10, 31 exchange into a DST where you take a more of a passive interest inside of an investment where you don’t have to be the individual actually doing the tenants toilets and termites work that everyone’s so familiar with and trying to avoid that that version of the golden handcuffs. Another option. Let’s say you’re going to sell an asset. Another one that we’ve used historically to try to help partners over time is a 721 exchange. This is a lesser known version within the tax code that allows you to sell a partnership interest into another partnership interest. You can sell a piece of real estate and in return receive a partnership interest in another business in this manner. It allows you to take more of a passive position. Do so in a tax efficient manner. There’s a lot of benefits associated with doing that. So these are just a handful of ways, right? I can promise you that we would rather buy and hold. We would prefer to buy and hold our favorite holding period is forever. But if you hear one of those three cell signals, you’ve got to try to find a way to ultimately mitigate that tax bill to the best of your ability by yet again deferring. So the truth is it’s actually defer, defer, defer, delete. You’re trying to continue the compounding without recognizing the gains along the way. Ask yourself, right? If you’re contemplating selling any given individual investment at this juncture, right? You’ve thought about it. Ask yourself, right? If I sell today, how much principle is ultimately going to disappear to friction costs? Is there a structure that I could possibly implement to help me keep the snowball rolling to help me keep more of that capital compounding? Am I simply exiting this individual investment or am I literally exiting the ability to compound wealth altogether? That’s a material difference. The truth is even when the investment ends and you sell an investment, sophisticated investors, they try to ensure that the compounding does not. Let me zoom out for a minute and just reset the conversation. I want to give you my personal belief. I believe that no one understands your family’s financial situation better than you do. Not a bureaucrat in Washington, not a massive federal agency, not some sort of distant policy maker trying to manage hundreds of millions of people from a thousand miles away. I would say that you know your goals. You know your risks. You know what your family needs. And because of that, I fundamentally believe that power, the power should stay with the individual exactly as the founders had originally envisioned. That philosophy aligns with the great Milton Friedman and the Chicago School of Economics. Milton wrote a famous book called Free to Choose and the idea is simple and I take it to heart. People should have the freedom to allocate their own capital in the way that they see fit for them and their families. Because when the individuals control their own individual resources, they tend to make better decisions for their families, for their communities and for their future than any centralized authority ever could. So if somebody wants to voluntarily send a huge check to the government, that’s perfectly fine. They’re absolutely free to do that, right? But you should have the freedom to choose to do that and that the default shouldn’t be thrust upon you, extracted from your wallet. The default should be choice. And that belief is exactly why I’m such a strong advocate for tax efficient investing. I’m working diligently to try to help you keep as much of your heart and money in your pocket, not because of taxes being bad, but because capital allocation matters. And I believe you know how to allocate that capital better than some bureaucrat that has no way shape a form of understanding you and your family better than you do. So the goal is simple. Structure your families affairs and your investments in a way that maximizes after tax free cash flow, after tax compounding and after tax wealth creation. Because at the end of the day, it’s not what you make. It is what you keep. And it’s how long you can ultimately compound that wealth. By now, we’ve talked about a handful of ways to defer right defer offsetting income through depreciation defer access liquidity through refinancing and defer sell while minimizing tax friction. Now we reach the final stage of the principle, the part that most people never talk about, which is delete. Remember the sequence that we’ve been talking about throughout the day. First, you defer taxes through depreciation. Then you defer again by accessing equity without selling. Then if you must sell, you defer again using tax efficient exit structure. But what happens if you simply keep compounding? What happens if you hold these assets for decades and decades? Something very interesting begins to occur. If you implement the capital strategy well, you slowly build a very large base of wealth over time. And that’s really what real estate is designed to do. Real estate is not a get rich quick style of business over a short period of time with a low probability of success. Real estate is a build massive amounts of wealth over a very long period of time with a high probability of success. But only if you keep the compounding running for a very long time. And along the way, something else is quietly happening in the background. Every time that you defer, you defer, you defer, your tax liability grows, $1,000, $10,000, $100,000, $1,000, $1,000,000, right? Over decades, the amount of tax you’ve deferred continues to accumulate. In many ways, it’s like you’re receiving an interest free loan from the government, allowing more of your capital to stay invested and compounding. Warren Buffett has literally done this for 65 years. He allowed Berkshire’s capital to compound while continually deferring taxation. But here’s where the story really gets interesting. When assets ultimately transfer through an estate, the tax code provides something called a step up in basis, which means the cost basis of the asset resets to current market value at the time of death. And that creates a powerful outcome. All of those deferred capital gains that built up over decades can effectively disappear. Because the tax liability belonged to you. It was your tax bill. But when the assets passed to your heirs, they inherit the assets, not the tax liability. Your $1,000,000 tax bill does not transfer to them. The basis resets and the taxes vanish. And the compounding, it continues, generation after generation after generation. Which means that if you defer long enough, that tax bill may never actually have to be paid at all. And that’s the final stage of the principle. Defer, defer again, defer again. And in some cases, delete. And when this strategy is implemented over decades, it has the power to do something extraordinary. It can change the financial trajectory of an entire family tree, not through speculation, not through luck, but through patient compounding, intelligent structure and time. Before anyone runs off thinking their entire game is simply deferring taxes forever, we need to apply Charlie Munger’s rule, which is invert, always invert. Because there are situations when this strategy absolutely should not be followed. The first is one of the most important rules in investing. You never let the tax consequences wag the investment dog. No tax strategy can rescue a bad investment. If the business is deteriorating, if the thesis is broken, if the fundamentals have changed, taxes should never be the reason you hold on. Because preserving capital is far more important than deferring taxes. The example I would say is Berkshire Hathaway. Literally, the name Berkshire Hathaway derives from a company that Buffett bought many, many moons ago, right? It’s counterintuitive. That business never exists. Berkshire Hathaway literally went to Fount because back in the day, he would implement the old philosophy of Benjamin Graham where you would buy fair businesses at wonderful prices. He was trying to buy businesses that were kind of bad businesses below book value. It was basically like the very first mobile home park we ever bought. The first mobile home park we bought for $200,000 is a bank repo, but the book value was $290,000 at least immediately out of the gate. Why? Because it was a 29 space community that had 29 homes in it that were vacant mobile homes. Those mobile homes were each valued at $10,000. And we bought the entire mobile home park plus all the homes for $200,000. So even if the real estate investment was horrific, we could have sold off each of the individual shell mobile homes for $10,000 and pocketed $290,000. Offsetting the $200,000 investment life is good. You’re buying below book value. That’s exactly what he was doing inside of Berkshire Hathaway. However, what he did not realize at the time that he bought it is that playbook has changed over time. The ability to do that is no longer near as readily available as it was when he got started when Benjamin Graham was implementing that business model. He was running that right after the Great Depression. It was much easier to buy businesses below book value at that time because stocks had plummeted to a ridiculous degree. But over time, he began to understand that you actually need to buy wonderful businesses at fair prices. It was a doomed textile mill that had horrific long-term macroeconomic talents. It was a downward spiral over the… It’s a slow, steady drain to zero. And the truth is, no matter how large your number is, if you know that eventually the business is going to go to zero, it is prudent to sell the business, take the chips off the table, pay the tax man, even if you’re going to have a smaller principal base after paying the tax man. Why? Because if you hold on, it’s going to zero. At that point, it becomes prudent to sell. You know, the lesson here is a bad business at a cheap price is still a bad business. You have to buy a terribly wonderful business, okay? You never let the tax consequences wag the investment dog. The second time you might contemplate ultimately being willing to sell and pay the tax man is if you find a vastly superior opportunity. It had better be a dramatically better return available in the marketplace. Not something where you’re compounding at 10%, and you have another potential opportunity to compound at maybe 12%. I understand the logic associated with that, but we just walk through the friction costs. You would have significantly less principal to invest in the next opportunity. And every single investment that you make has massive amounts of additional reinvestment risk. So the pure option is to buy and hold. However, if it is a vastly superior opportunity, then you can contemplate it. If you’re compounding at 10%, and you’ve got another one that’s more than double, it’s 20%, 25%, reasonable to begin exploring whether we prudent to end up selling and pay the tax man. And as I try to break my mind and contemplate with the old Charlie Munger philosophy of invert, always invert. When does this principle not ring true of deferred deferred delete? When does this principle not ring true? The final one that I can contemplate is ultimately if you have a unique macro environment where deflation ultimately comes to fruition. Obviously for many, many, many, many moons, we’ve been in inflationary environments. The government literally puts it into their business model where they’re stating overtly that they have a 2% inflation target. However, if we ever ran into an economic situation where deflation was likely, was the likely outcome over an extended period of time, then you can contemplate going ahead and paying the taxes today. Why? Because if you were going to pay the taxes today with less valuable dollars, and you would have a higher amount of purchasing power in the future, if we were in a deflationary environment, that would be something to explore. But while my crystal ball is broken, I am exceedingly confident that that will not be the case in the future. It is very simple to understand why that is the case. At this juncture, there’s nearly 40 trillion dollars of debt on the balance sheet of the government. It’s a state state of affairs. How did we get there? Because human beings to a large degree are irrational. Human beings are rationalizing, but we are very irrational in the way that we behave. Why? Because politicians promise the world to everybody, right? So imagine a scenario where no human being actually likes paying taxes and simultaneously all human beings really enjoy getting free stuff. So all politicians promise no taxes and a bunch of free stuff. And what happens is 40 trillion dollars later on the balance sheet, the United States governments in a pretty precarious situation. And who is going to pay for that 40 trillion dollars? Who is going to pay for that 40 trillion dollars? Right now at this juncture, every single individual taxpayer in this country has an allocated amount of about $925,000 attributable to them. That is the amount of debt attributable to you. That is the amount of the country’s debt attributable to you as a taxpayer. $25,000. Who is going to pay for that? Is it the tooth fairy? Who is going to pay for that? It can only happen in one of three ways. One is that the tax bills increase. Two is that spending increases in DC. Or three is the slide tax that nobody talks about the tax of inflation. It is why the government intentionally bakes in a 2% inflation target into their business model because they know that over time they’ll be able to inflate away that debt. But that slide tax adversely affects every human being here because you’re purchasing power slowly dwindles that tax you pay when you go to the grocery store and milk costs significantly more than it did the year prior that tax goes to your kid’s daycare when you have to pay an exorbitant amount on a monthly basis far more than you would have otherwise thought a handful of years ago. And that is the slide tax in the way in which they ultimately inflate away that respective debt. But it is for this reason when trying to implement the old invert always invert philosophy and when the principle of deferred deferred delete might be broken right in a deflationary environment. That might be the case. But as far as the eye can see, I cannot imagine a scenario where we are in a material deflationary environment. And it is more important and better to pay the tax today than it would be down the road. It is a far better option to defer indefinitely. As Munger said, we don’t pay taxes. We defer indefinitely because he sees the writing on the wall that I do too that there’s 40 trillion dollars of debt on the government’s balance sheet and inflation is going to be rampant for the foreseeable future. So we’d rather keep the dollars today compounding in a material way and pay those taxes far out into the future when the purchasing power of those dollars are materially lower benefiting from the time value of money. We’re going to have cash flow and build legacy wealth in a tax efficient manner because that’s what I’m trying to do for my family and I’m sharing all the secrets that I’ve learned along the way. As we progress in the coming episodes, we’re going to be bringing on a lot of specialists, vendors who serve my family and who serve folks not dissimilar to to myself and all the different folks who have been quote unquote successful in the eyes of society. We’re talking about tax strategists, individuals that can ultimately help with family planning, family offices and the like as well as a lot of different limited partners that have ultimately invested in passive syndications and allocated a lot of capital over time that I’ve experienced across 10, 20, 30, 40, 50 different syndications, tens of millions of dollars and cumulative networks literally sent to millionaires nine figures and above over time. What that’s going to do is provide additional sage investment wisdom for the entirety of the base. My mission is to help you generate cash flow and build legacy wealth and a tax efficient manner. We can’t wait to begin bringing some of those individuals on to share some of the best sage wisdom that they’ve learned along their journeys as well with that. We’ll get the heck out of here for today guys. Until next time, you’d be great.