Matt

If you learned something from this explanation, send it to a friend and give me a follow @mattthemoneyguy I think there is a huge financial education problem in the U.S., and I post daily about personal finance and investing to try to improve that problem. Just trying to help you learn about money one post at a time!

I see a lot of discourse around high-net-worth individuals cheating taxes, but what's often misunderstood is that they aren’t cheating taxes. The tax code is structured in a way where they legally don’t have to pay taxes. You can’t hope that billionaires won’t take advantage of these loopholes, law makers need to close these loopholes to stop it. The main reason that I explain this though is that I see too many people trying to sell this as a strategy for the everyday person. It’s not.

Ever wonder how billionaires spend their money without having to sell their stock AND avoid paying taxes in the process? Let me explain the “buy, borrow, die” strategy to you:

Social Security is a hot-button political topic due to the cost of the program. I’m not engaging in the politics of this here, just explaining how the program works. Regardless of your feelings about Social Security, it’s both a large tax you’re subject to and a large benefit that you will likely receive at some point, so you should understand how it works. If you find this breakdown helpful, give me a follow @mattthemoneguy. I post about personal finance and investing topics here every day!

Given the political pressure from widespread reliance on Social Security, it’s likely that there will be a reformulation to keep benefits fully funded (that is speculative, but a commonly held belief). For 1 in 5 retirees, Social Security makes up ~90% of their income. If payments were to be reduced, many would likely end up on the streets.

Social Security covers ~40% of expenses for the average retiree, yet most people still don’t understand the details of how the program works. I’ll explain 5 important things you need to know about the Social Security:

Fighting about money is a lot less likely when you have it. If personal finance is stressful for you, make the joint commitment to learning the basics and managing your money responsibly. You can get really deep on personal finance, but the basics aren’t as hard as you may think. Following me is a good start 🙂 And I’m serious about sending this to your partner… talk about it at dinner tonight and thank me in 20 years.

These are all starter questions, but you may have gotten this gist: You both need to be on the same page about your vision, lifestyle, risk tolerance, and values. If you don’t hammer these things out early, you’ll end up talking about them down the line when you’re forced to. Oh, and one more thing….

One third of all divorces occur because of money problems. This isn’t shocking in the slightest because many couples never have real conversations about money until it’s way too late. Send this to your partner and talk about these 5 questions at dinner tonight: