But Trump's tax reports left many people confused.

How on earth do you make hundreds of millions of dollars but pay nothing in taxes?

The answer is long and complicated, but we'll try to simplify it here in this video.

Just disclaimer.

I don't want to politicize this video.

You're not a political channel.

Regardless of which party you affiliate with or which candidate do you support.

Donald Trump is a pretty good example off someone who used debt toe build his multibillion dollar empire off course.

Some of his methods are quite controversial, to say the least, but we're not going to look into that.

If you make over $600,000 you probably pay over 37% in taxes.

And that number could drop if the Democrats passed their tax bill.

But as they say, the devil is in the details.

If you would have made that $600,000 using that, you could have lowered your tax rate toe 0% or even apply for a tax refund, as Jeff basis did with Amazon back in 2018, when Amazon received a federal tax refunds off 100 $29 million.

If you master debt and really stage, you can use other people's money to make millions of dollars on pay.

Absolutely no tax is a child.

Consider this.

Let's assume you're a hard working man who saves as much as you can.

After a few years of saving, you have $100,000 in your bank account and decide to invest in real estate.

Off course.

With $100,000 your options are limited.

But here's how you can use that to turn that $100,000 into a few million dollars in a matter off.

A few years, you find the property in a good neighborhood that cost $250,000 for example, you had to a bank and get a mortgage by making a 20% down payments.

Now you're left with the house that needs renovation, a mortgage and $50,000 in your bank account.

You spend another $25,000 to renovate the house so your total investment jumps to $75,000.

But the value of the house rises a swell, Let's say 2 $350,000 since you have renovated it and turned it from a place that no one wants to live into, a place that people are willing to pay to live.

You rented out to cover your mortgage insurance on other expenses and make sure that it generates some cash flow.

You had your bank again, but this time refinance your mortgage, since the value of the house is now $350,000.

If you would get an 80% mortgage like you did the first time you will receive $280,000.

You spend $200,000 off that money to cover your first mortgage, and you're left with an extra $80,000.

You can use that money to get another mortgage renovated it rented out and create a second source of income.

You can refinance your second house to get the third mortgage and so on and so forth.

And here's the best part.

With just $75,000 now you control assets that, worth millions of dollars, depends on how many properties you have bought and created multiple streams of income if you have done your research and bought into areas that the rising in demand the properties will appreciate and value, which means you will be able to increase the rent, but your mortgage will gradually get smaller as the tenants keep paying them off.

That's how most people get rich in real estate.

And we did not even talk about all kinds of deductions you get with real estate starting from depreciation to deducting your mortgage from your rental income.

Real estate isn't the only industry where you can use that to make a fortune that is used pretty much everywhere, including the stock market.

Let's say you have $50,000 in your bank account and you're looking to trade some stocks.

Based on your analysis, you believe that stock A will increase by 10% tomorrow.

You can use your $50,000 to buy stock A.

And let's assume that your predictions turn out to be correct.

Stock a rises by 10%.

You immediately sell your stocks for $55 and end up making $5000 in profit.

Great, but that's one way to do it.

Your second option is margin investing with a margin account.

Your broker would loan you an extra $50,000.

So now you can buy stocks worth ah, $100,000 if we use the exact same example and assume that you spend $100,000 buying stock A and sell it once it rises by 10% you end up making $10,000 instead of five.

Suddenly, out of nothing, you doubled your income on the exact same deal.

You don't have to make Ah lot of deals to build a fortune.

If you're going to be right just once and leverage it, that's enough to make a fortune.

That's probably the only shortcut to build wealth.

But not everything is sunshine and rainbows.

With leverage comes risk, ah, lot off risks If the stock price falls below a certain value, your broker has the right to liquidate your stocks and leave you with the loss.

So you have to be quite confident about your decision.

For those who are not as risk tolerant as some of the other investors, there is an option to leverage E T f E d EFS usually follow a particular index such as the S and P 500 or a certain industry or bones.

So instead of using debt to purchase a particular stock, you can try E T F off course.

The thieves don't usually rise this fastest individual stocks, but they neither full dramatically since they perform as good or as bad as the industry average.

But margin investing isn't as popular a short selling you probably have heard about this term alongside Tesla because these two awards go hand in hand.

Well, most beginner investors try to make money by P predicting which stocks would rise in value.

Some professional investors make money by predicting which talks with fall in value.

It's not as confusing as it might seem.

Stock prices job up and down for one reason or another.

Poor quarterly reports or any other negative news can drive the stock price down.

Let's say Apple stock prices, Ah, $100.

And tomorrow Apple is going to release its quarterly reports, and based on your analysis, it had a bad quarter so the stock might fold.

You borrow 1000 apple stocks from your broker and sell them for $100 each, or $100,000 in chattel.

Now you have $100,000 in your pocket, but you still all your broker?

1000 Apple stocks.

You use that $100,000 you earn yesterday on by 1000 apple stocks for $80,000 since the stock price fell on.

Return them back to your broker without using a single dime out of your money.

You have earned $20,000 on a fall off a stock.

Investors used this strategy or they trying, especially with stocks that are more volatile, such as Tesla.

That's why, whenever you heard the news that Tesla's stock has risen, there will always be an investor who will short it.

Although on the last occasion investors lost millions of dollars since Tesla's stock kept rising, short selling isn't just practiced in the stock market.

It's much more popular in the foreign exchange market, or forex, and short.

It works in the exact same way.

However, in this case, instead of borrowing stocks, investors borrow currencies.

The nature off currencies is that they fluctuate much more than stocks, especially due to geopolitical factors.

The man who mastered forex deals is George Soros.

We have already covered that in a previous video which link you will find in the description.

But here is what happened.

In short.

Back in the 19 nineties, Britain was suffering economically.

It had to devalue its currency, but it couldn't since it was artificially hedged against other European currencies.

But George sorrows to realize that sooner or later Britain will have to leave the E.

R M and devalued the pound and shorted over $10 billion worth of British pound.

When the British pound finally was devalued, so Rose netted $1.2 billion.

Leverage ratios could go as high as 1 to 100 forex, which means you can borrow $100 for every dollar you put in.

But the competition is fears, since you will be competing against huge financial institutions such as central banks.

There are endless numbers off ways to use debt to build wealth.

But you have to keep in mind that whenever you use that you are taking a huge risk.

If for one reason or another, things turn south, you can end up losing everything.

That's why leverage is often used by more professional on experienced investors.

And now it's time to give this video a thumbs up if you haven't done that yet, that really helps the video to get recommended much more often.

And if you have enjoyed this video, make sure to subscribe and turn on your notifications.

We make similar videos to help you understand how the world of finance works.

Thanks for watching and until next time.