Every so often, something happens in the business world that captures everyone’s imagination. Not because of the drama or the headlines, but because it reveals how money really moves in this country. When a certain tech billionaire bought one of the largest social media platforms in the world, people kept asking one question over and over: how do you buy a forty-plus-billion-dollar company when you don’t actually have forty-plus-billion dollars in cash?
That question matters for you far more than you may think. It matters because this strategy isn’t reserved for billionaires. Business owners you’ll never read about in the news use this playbook every single day. It matters because it proves something I’ve taught clients for years: people don’t build wealth by stacking cash. They build it by owning assets that create opportunities, produce income, and open doors that cash alone could never open.
I’ve spent my entire career as a tax strategist watching how entrepreneurs grow, how they borrow, how they invest, and how they scale. And I’ve learned something simple. Cash is helpful, but cash flow is power. Assets are leverage. And the tax code rewards people who build and use both.
If that sounds surprising, let me show you exactly how this works.
The Big Misunderstanding About Wealth
Every year I meet business owners who believe wealthy people sit on mountains of cash like a cartoon dragon hoarding gold. But in the real world, wealth is not measured by what sits in your checking account. It’s measured by the value of what you own. A business. Real estate. Equipment. Equity. Intellectual property. Even your brand.
The public gets confused because the government does not tax people on the full value of the assets they own if those assets haven’t been sold. This idea goes back to a 1955 Supreme Court case, Commissioner v. Glenshaw Glass, which clarified that taxable income must be something that is an undeniable increase in wealth, clearly realized, and fully under your control. If you haven’t sold the asset, you haven’t realized income. If you haven’t realized income, you don’t owe tax on it.
This isn’t a loophole. It is the foundation of how our tax system works. And thank goodness it does, because it protects business owners of all sizes. If you own a business worth several million dollars and you haven’t sold it, the IRS doesn’t tax its value. When a building you own appreciates, you still owe nothing until you sell. And when your company’s stock price climbs, that increase isn’t taxed until you actually sell the shares.
If the law worked any other way, entrepreneurship would collapse. You would be forced to sell assets every year just to pay taxes on growth you never actually put in your pocket. That’s why the same rule that protects billionaires also protects the landscaper, the dentist, the online retailer, the gym owner, and the real estate investor. It’s not written for the rich. It’s written for the entire economy.
But here’s where things get interesting. Once you understand that assets can grow without being taxed until you sell, you start to understand why so many wealthy people borrow instead of sell.
And this is where the real strategy begins.
How to Buy Something Huge Without Selling What You Own
When that tech billionaire went looking for cash to buy a giant social media platform, he didn’t want to sell his shares in his primary company. Selling them meant triggering capital gains taxes on tens of billions in appreciation. It meant losing control. It meant weakening the very asset that built his empire.
So he did what entrepreneurs all over America do every day. He used his assets as collateral for a loan.
Think of it this way. If you own a business worth ten million dollars, and you need two million dollars to expand, you don’t necessarily sell twenty percent of your company to fund the expansion. You go to a bank or a private lender and say, here is what I own, and here is the cash flow it produces. Can I borrow against it?
You give them a reason to trust you. They give you the money you need. You pay them back over time using the cash flow of the thing you bought or the thing you already own.
That is the entire playbook. It works at ten million dollars. It works at one million dollars. And yes, it works at forty billion dollars.
When you borrow against an asset, the loan is not taxable. You haven’t received income. You aren’t richer. You’ve taken on a liability that must be repaid. And because the tax code understands this, it treats borrowed money exactly as it should be treated. Not as a gain, but as a tool.
The Most Overlooked Strategy in Entrepreneurship
If you’re a small or medium-sized business owner, this strategy might feel far removed from your reality. I promise you, it isn’t. In fact, I’ve seen this play out more times in small businesses than I have in large corporations.
I once worked with a physician who owned her practice and wanted to open a second location. The expansion required equipment, staff, marketing, and a space that needed full renovation. She didn’t want to sell investments or drain her cash reserves. Instead, we took a close look at the equity in her existing practice. That equity, along with her consistent cash flow, was strong enough to secure financing. She opened the new location without selling a single asset.
And that wasn’t the most interesting part. The most interesting part was the tax strategy layered on top. The equipment she purchased qualified for accelerated depreciation. The expansion costs created deductions that lowered her taxable income. The growth of her practice increased the value of the entire business. And none of this required her to sell the original asset.
This is the playbook I want every entrepreneur to learn. Build assets. Produce cash flow. Both are used to create leverage. Said leverage creates massive opportunity. Use this opportunity to create additional cash flow. Leverage that cash flow to build more assets.
That cycle, repeated consistently, is the quiet formula behind wealth in America.
Why the Government Rewards This Behavior
There is a misconception floating around that the government should “tax the wealthy more” by taxing their unrealized gains. I understand the emotion behind the idea. What I always explain, however, is the incentive behind the current system.
The government rewards people who deploy assets into the economy because it creates jobs, innovation, progress, and growth. If business owners were taxed simply for owning something valuable, they would stop investing in things that grow. They would hoard cash, completely avoid risk, and ultimately shut down all opportunity — for everyone.
Congress knows this. That’s why the tax code offers bonus depreciation for business equipment, cost segregation for real estate, accelerated write-offs for investments in technology, and deductions for retirement contributions that help fund the market. It’s why borrowing against assets is not taxable. It’s why selling assets often comes with capital gains rates that are lower than ordinary income rates.
These aren’t mistakes. They are incentives.
When entrepreneurs take calculated risks, everyone benefits. Employees get paychecks. Communities grow. New products get created. More tax revenue is generated because the business expands.
The purpose of the tax code is not to punish success. It’s to encourage productivity.
What You Can Learn From the Playbook
You may not be purchasing a global social media platform, but you absolutely can use the blueprint behind the scenes.
If you own a profitable business, that business itself is an asset you can leverage. You don’t have to drain your bank account to expand. There is no need to sell equity to survive nor liquidate long-term investments to take advantage of opportunities.
The tax code is evidence that the government wants you to use what you’ve built to create more. It wants you to invest in your business, hire more people, purchase better equipment… simply, it wants you to continue your growth trajectory.
Your job as an entrepreneur is to understand that assets create flexibility. Flexibility creates growth. And growth, when paired with smart tax strategy, compounds in a way that working for a paycheck never will.
The Truth About Wealth That No One Teaches
People always assume wealth comes from saving mountains of money. In reality, I’ve watched business owners accumulate real wealth by doing something much simpler. They build things that appreciate in value. This should generate increased cash flow. Good for everyone — right?
They leverage what they own at the right moments. And they use the tax code as it was intended, not as a burden, but as a guide.
Borrowing against assets is not a cheat code. It is one of the oldest, most legitimate strategies in the world of finance. It allows you to keep what you own, grow what you have, and pursue opportunities without triggering unnecessary tax events.
And here’s the most important part. You don’t need to be a billionaire to do this. You only need to start thinking like one.
When you shift from a cash mentality to an asset mentality, your options expand. Your stress decreases. Your creativity increases. And your understanding of how wealth is actually built becomes clearer than ever.
I’ve watched everyday entrepreneurs use these principles to open new locations, acquire competitors, invest in real estate, launch new product lines, buy equipment, and scale their revenue far beyond what their cash reserves could support.
Once you see how this works, you never look at wealth the same way again.
Your Next Move
If you take nothing else from this, let it be this: owning assets and creating cash flow is one of the most tax-efficient strategies available to business owners at every level.
Remember that you are not taxed on unrealized growth. The IRS cannot levy taxes on you (or your business) when you borrow against something you own. Hence, you are not penalized for using leverage to create opportunity.
The reason billionaires (like Musk, Bezos, Gates, and Buffet) take advantage of these strategies is because they work. The reason entrepreneurs across the country use these strategies is because they scale. And the reason you should understand them is because they unlock a level of control over your business and your future that most people never experience.
The tax code rewards builders. It rewards innovators. It rewards people who use what they have to create something bigger.
You may never buy a platform worth billions, but the strategy behind that purchase can absolutely change the way you run your business.
Build assets. Create cash flow. Use both wisely. That is how you grow without draining your bank account. That is how you keep more of what you earn. And that is how you move from playing small to building real, lasting wealth.
Welcome to the New Age of Accounting. Let’s begin.
P.S. If you found this article helpful, you’ll love my new book S-Corp Mastery: How Smart Business Owners Maximize Tax Savings & Build a Lasting Legacy. It’s now live and available in a sleek, easy-to-read PDF version. Grab your copy here
Chris is the Managing Partner at Weston Tax Associates, a best-selling author, and a renowned tax strategist. With over 20 years of expertise in tax and corporate finance, he simplifies complex tax concepts into actionable strategies that drive business growth. Originally from Sweden, he now lives in Florida with his wife and two sons.
