The Tax Strategy Billionaires Use That Almost Nobody Talks About | Ep. 442 with George Dimov, CPA and President of Dimov Tax

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How do ultra‑wealthy individuals pay less tax than the working rich?

George Dimov 0:00

That's really how the the ultra high net worth really don't pay taxes because the value of their net worth is tied to the stock. Some of them borrow against it, effectively never actually paying tax.

Unknown 0:10

George Demoff built a nationwide CPA firm out of the 2008 crash, licensed in all 50 states, 20 years inside the tax code, and he's about to show you the playbook. What do you think is the single most expensive mistake that smart people make around taxes?

George Dimov 0:29

People that tend to overthink or be very nervous tend to overfed. The IRS has a profile on every industry. Somebody that owns real estate can effectively pay very little to no tax depending on how they

Unknown 0:52

There's something that I've always wanted to know about, and this is how do the ultra wealthy pay less taxes? What do rich people know that the rest of the people don't know?

George Dimov 1:05

Uh, that's a great question. And it's something that gets uh first of all, uh thank you for asking that. It's something that actually gets discussed quite a bit by politicians and there's always these laws being kicked around exactly on this topic. How do rich people continue to increase their wealth without actually paying tax? And one of the main ways is and we're talking about people that are ultra high net worth. I'm not talking about people Making a few hundred thousand or even a few million or even a few tens of million. Those are called the working rich. People that are working, they may own a string of uh uh medical offices, they may own a string of dentistry offices, they may own um a business that's generating income.

George Dimov 1:47

Those are working rich. Okay, those are people that are earning a lot of money, and many of them do get taxed quite a bit. Okay, there's some way Around that, and there's some different types of structures that could be implemented for those people. But if we're talking about people that are billionaires, most of the time their income, uh pardon me, their net worth is tied to their stocks. Okay, so what happens in situations like this is the reason why they're becoming richer and richer is because the underlying net worth that They have is tied to a security, a stock that they own. For instance, let's say somebody is the founder or co-founder of a large technology company, that stock may have gone from a par value of under one cent to worth hundreds of dollars.

George Dimov 2:36

And now all of a sudden they own millions of the stock and they're billionaires. And what happened during this time? The stock appreciated the value, but no Actual taxable transaction occurred. In other words, they're only taxed when they sell the stock. And there was an example of this. Elon Musk, a few years ago, it there was one of these people from Congress that criticized Elon Musk for not paying tax. And he said, Okay, I'll pay some tax. And he sold something like $10 billion worth of stock. Or I think his actual tax obligation was $10 billion. So he sold a lot more than that. That I don't remember what the exact figure was. He said, okay, I don't pay enough tax. Here's 10 billion. And I bet you're going to misspend this 10 billion anyway.

George Dimov 3:18

So he kind of made a joke out of it, but he actually did it. Right. So that's really how the ultra-high net worth really don't pay taxes because they're the value of their net worth is tied to the stock. Now, if they actually want to use it, they have to sell it and they can pay pay some tax. Or some of them borrow a Against it, effectively never actually paying tax, which is another strategy. Tell me about that. Well, there's this theory that if you have your net worth tied into and this this actually is a rich person strategy that anybody can take advantage of to some extent or another. Many 401k programs may allow you to borrow from them. So let's say that you've been contributing to your 401k for a 20 or 30 year career, and you have called a few million dollars in there.

George Dimov 4:00

Okay, depending on how it was invested and how that performed, there are some 401k uh programs that I've seen in the past allow you to borrow against that. So what happens is you take out a loan.

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Chapters

8 chapters

1 How do ultra‑wealthy individuals pay less tax than the working rich? 0:00–4:27 2 Why can billionaires grow net worth without triggering taxes? 4:27–8:36 3 How does borrowing against appreciated assets replace selling and avoid taxes? 8:36–12:16 4 What tax‑saving strategies can real‑estate owners use, like cost‑segregation? 12:16–16:40 5 Which employer‑provided retirement benefits do most employees overlook? 16:40–21:51 6 What retirement plan options (SEP IRA, Solo 401(k), defined benefit) are best for entrepreneurs? 21:51–26:24 7 How can business owners uncover hidden waste or fraud through bookkeeping audits? 26:24–30:54 8 Why is the CPA industry facing a shortage and how will AI impact complex tax planning? 30:54–34:52

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Topics in this episode

Elon Musk 1 OpenAI 2 Shopify 5 Congress 1 IRS 4 401k 4 Upwork 7 Huel 2 TurboTax 1 YPO 1 Vern Harnish 2 Coco Via 6

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Recorded07 Sep 2026

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Show notes

Daniel opens the episode with the question many people wonder but rarely ask directly: how do the ultra wealthy pay less taxes? George explains that there is a major difference between people earning high income through work and the ultra wealthy whose net worth is tied to appreciated stock or other assets. The “working rich” may earn a lot, but they often still pay significant taxes because their income is active and taxable. Billionaires, by contrast, may see their net worth grow without triggering taxes because appreciation is not taxed until the asset is sold.From there, George breaks down how wealthy people can borrow against assets instead of selling them, why real estate owners can reduce taxes through strategies like cost segregation, and why everyday employees often miss basic employer benefits like retirement contributions. For entrepreneurs, George highlights defined benefit plans, SEP IRAs, solo 401(k)s, bookkeeping reviews, and fraud prevention as major areas where business owners can save money or protect themselves.The episode also moves beyond tax tactics into the future of accounting. George discusses why the CPA industry is facing a major shortage, why many younger professionals are leaving the field, and why AI still struggles with real accounting complexity. He argues that while tools like TurboTax can work for simple situations, complicated tax planning still requires experienced professionals who understand the client, the details, and the consequences.Key Discussion PointsGeorge explains that ultra wealthy people often build net worth through appreciated stock, which does not create a taxable event until they sell, while the “working rich” still tend to pay significant taxes on active income. He breaks down the idea of borrowing against assets, where people may access liquidity through loans instead of selling appreciated securities and triggering taxes. George says smart people often miss basic tax opportunities, including maxing out employer retirement benefits, using cost segregation for real estate, and setting up retirement plans like SEP IRAs, solo 401(k)s, or defined benefit plans. For entrepreneurs and freelancers, George warns that fear of being audited can cause people to overpay, but he also cautions against reckless social media tax advice, especially extreme deductions like luxury vehicle write offs. The conversation explores the massive shortage of accountants, with George explaining that many baby boomers are leaving the industry while younger generations are choosing other career paths. George argues that AI and tax software can help in simple cases, but complex tax situations still require professional judgment, responsiveness, and a strong client experience. TakeawaysThe ultra wealthy often pay less tax because much of their wealth grows inside assets, not through ordinary income. Taxes are usually triggered when assets are sold, not simply when they appreciate.Business owners should regularly review their own bookkeeping. George says companies often find wasted subscriptions, unnecessary contractors, payroll issues, or even fraud when they actually audit their books.Freelancers and gig workers may overpay because they are afraid to deduct legitimate business expenses. George’s point is not to be reckless, but to understand what is normal, documented, and defensible for your industry.One person businesses need structure early. George discusses tools like entity setup, 83(b) elections, and tax advantaged planning that can dramatically affect outcomes if a company becomes valuable later.The coming generational wealth transfer could create major tax and planning consequences, especially for families that do not set up trusts, estate plans, or clear structures in advance.In professional services, customer experience is the real growth engine. George says the best marketing strategy is doing great work, being responsive, and creating the kind of experience that turns one engagement into a long term relationship.Closing ThoughtsGeorge Dimov’s Founder’s Story episode is a practical, revealing conversation about taxes, wealth, entrepreneurship, and the future of accounting. George makes clear that taxes are not just about what you earn, but how you earn it, how your assets are structured, what benefits you use, and whether you plan before the moment arrives. For founders, freelancers, investors, and families preparing for wealth transfer, the episode is a reminder that good tax strategy starts early, requires documentation, and depends on having the right experts around you. His biggest message is simple: do not rely on fear, social media advice, or AI alone when the stakes are high. Get the right structure, review the numbers, and build with strategy before the tax bill arrives.Today's Sponsor: Start with Upwork, the platform to find, hire, and pay expert freelancers across marketing, design, development, and operations. Visit https://www.upwork.com to post your job for free and get matched with top talent.Support longevity in business and life with CocoaVia, a daily cocoa flavanol supplement designed to support healthy blood flow, heart health, and brain function. Go to https://www.cocoavia.com/ and use code FOUNDERS for an extra 20% off, or find it at your local Sprouts.Limited Time Offer – Make healthy eating simple. Get Huel today with my exclusive offer of 15% OFF online with my code FOUNDER at https://www.huel.com/FOUNDER. New Customers Only. Thank you to Huel for partnering and supporting our show!Stop overthinking your first sale and launch with Shopify, the platform that helps you build, sell, and keep your business running from day one. Start your free trial today at https://www.shopify.com/foundersstory. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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