If you own stocks and you live in California and you want to borrow money

 We just learned something that really wealthy people have known all along.

For example, Elon Musk doesn't usually ever sell stock to live his life. Instead he borrows against some of his stocks. Why?

Because for example, if you live in California you have to be pay 10/% capital Gains tax in addition to the 20% Federal Capital Gains tax for a total of 30% Capital Gains taxes every time you sell stocks.

So, why not keep your stocks and don't sell them and separate out a stock or two to borrow against?

This way you likely will be paying 6% on a credit line instead of 30% in California with 10% to the State and 20% Capital Gains Tax to the Federal government.

Then not only are you not paying 30% capital Gains tax you are only paying 6% interest on your loan per year instead.

Not only that you can write off the 6% interest on your taxes too.