Ray Madoff

But they are not like just foregoing salary.

Instead, they are being compensated through the enormous growth in value of their stock.

Enormous growth.

Buffett's wealth has grown by $50 billion over the past two to three years.

Zuckerberg's has grown by $100 billion.

Larry Ellison's has grown by more than $200 billion.

Okay, this is just over the past couple of years.

They don't sell.

It enables them to continue to control their companies, but it also enables them to avoid taxes because under our tax system, you do not pay any taxes unless you sell.

So these guys are worth a lot, but it's all just sort of hoarded.

Now, you might say, but yes, they must sell, though, because they want to support their lavish lifestyles.

How else is Larry Ellison going to buy his island of Lanai, which he owns all the businesses, all the real estate?

Here is how they own all their fancy stuff.

They borrow money.

The way that they do it is they borrow against those funds because there is always somebody available to lend them money at quite favorable rates.

And borrowing is entirely tax-free.

And as long as their wealth grows faster than that rate of interest that they're charged, which it does, then they just always end up ahead.

Yeah, or whoever first lent it to you is happy to keep lending it to you because they're carrying a loan for which they're being paid.

If somebody lends Larry Ellison $100 million and Larry Ellison is paying them whatever interest rate they want, they're happy.

These are people in the business of making loans, and they're happy to keep those loans outstanding.