Hi there! JP here, Co-founder of OPM Mastery.
Every now and again we get asked why we named our company OPM Mastery — and I LOVE explaining it.
OPM stands for “other people’s money” — so our company’s products and services are built to enable you to master the concept of using “other people’s money” in order to build wealth.
We consult and educate all of the clients we work with on this concept, but we go very in-depth.
I’ve decided to keep things simple, here we go…
That is the framework of building wealth using “OPM” that helps the rich stay rich and enables them to pay less in taxes (stick around, we’ll get to that).
So let’s dive into this simplified version of our concept..
When you get your paycheck, your hard earned dollars are already taxed and it might feel like not a whole lot is left over.
I’ve lost count of how many times I’ve seen everyday people take their money and try investing in the stock market themselves without a clear game plan…
They toss some money in there and buy and sell stocks too often.
Now you might ask: “Isn’t that a good thing?”
It’s a GREAT thing to buy appreciating assets in general. However, often times people also “sell” these assets way before reaping any sort of benefits from it.
Another thing that happens is people will be too quick to “sell” let’s say a stock.
They thought it was a good idea and for some reason they had second thoughts and sold it.
So imagine this…
You bought a stock using your hard earned dollars from your paycheck that has already been taxed.
You then used some of your already taxed dollars to buy a decent amount of stock.
For some reason you change your mind and you sell it.
The moment you “sell” you’ve now created another “taxable event”.
So whatever money you just took our from that asset is going to be taxed.
At this point you’ve been taxed twice, which leads us to the next phase of this framework.
When buying assets you want to make sure you’re going in with a long-term mindset.
I challenge you to shift your mindset to NEVER sell.
The more assets you buy, the more wealth you build.
As you continue to build a vast store of wealth, you can now morrow money from creditors / financial institutions using these assets are collateral.
“Why would I do that?” is a common question.
Because now that passive income you’ve been building through buying assets can be used for you to spend without triggering a taxable event.
Since you’re borrowing from your assets, it’s not considered income under the tax code.
So you can still access money from your assets without having to pay taxes simply by borrowing from it.
Oh and not to mention.. there are plenty of investment options that allow you to do this while your money still continues to grow while you’re borrowing from it!
So by doing this, you can keep spending and borrowing for the rest of your life for as long as your assets continue to grow in value.
So what happens when you die? Does the wealth you accumulated get taxed? Does your family have to pay a tax?
Not at all.
When you first buy an asset, the value is whatever you paid for the asset initially. Capital gains taxes are on any increase in value beyond what you purchased it for.
This means that when your assets are handed over to your heirs, beneficiaries, whatever you’d like to call them – whatever your assets are worth when you die now becomes the “new initial value” to your heirs / beneficiaries.
I purchased a home for $800,000
The value of that home increased to $1.8MM by the time I die.
My wealth gets handed over to my heirs / beneficiaries.
The new “initial value” of that home or my wealth is now $1.8MM.
If my heirs / beneficiaries decide to sell it at $1.8MM they aren’t paying for the gains from $800,000 – $1.8MM because the “initial value” has changed due to my death.
As I mentioned – this is as simple as I can put it.
Our Financial Freedom Academy covers this concept in a lot more detail with a direct roadmap on how to get starting on building wealth using “other people’s money”.
If this has sparked a fire in your mind or additional curiosity around creative yet proven ways to build wealth I highly encourage you to schedule a call with one of our growth consultants from the OPM Mastery team.
Here’s the link to book your free strategy session: https://calendly.com/opmmastery-jp/scaling-session
Hope you got some value from this!