The strategy
What is Equity Cycling™?
Equity Cycling is a wealth strategy: you borrow against assets you already own, reinvest the cash into new income-producing assets, and repeat, so you can build more assets without selling the ones you have.
How is it different from Buy, Borrow, Die?
| Buy, Borrow, Die | Equity Cycling™ | |
|---|---|---|
| Core move | Borrow instead of sell | Borrow, then reinvest the cash |
| Shape | One-time, ends at death | A repeating loop |
| Goal | Skip income tax on the gain at death (basis step-up); estate tax can still apply | Keep building assets during your life |
The loop
- Own an appreciating asset. That’s an Equity Center.
- Borrow against it instead of selling. A loan isn’t a sale, so you keep the asset and its growth.
- Reinvest the cash into the next income-producing asset.
- Repeat. Each new asset becomes another Equity Center.
The honest tradeoffs. Borrowing costs interest, often at a variable rate. Leverage magnifies losses, and a price drop can force a sale at the worst time. Borrowing lets you skip a sale, not the tax on your gain: sell later, or get forced to sell by a lender, and that tax comes due. With one concentrated stock, borrowing adds risk to a position that’s already risky.
Who developed it?
Al (BiG Al) Darnell, Jr., EA, MBA developed Equity Cycling. Together, he and Terrence bring more than 20 years in tax and financial services. Meet the founders →
Questions
Frequently asked
- What is Equity Cycling?
- A wealth strategy where you borrow against assets you already own, reinvest the borrowed cash into new income-producing assets, and repeat, so you can build more assets without selling the ones you have.
- Is Equity Cycling the same as Buy, Borrow, Die?
- No. Buy, Borrow, Die is a one-time move: borrow instead of sell. Equity Cycling adds the reinvestment loop.
- Do you pay tax when you borrow against an asset?
- A loan isn’t a sale, so borrowing is generally not a taxable event. Rules depend on your situation.
- Is Equity Cycling risky?
- Yes, borrowing carries real risk, including forced sales if an asset drops. Run it with a qualified professional.
Next step
Where should your tax savings go?
Book a call. We’ll look at what you save and what each Equity Center option means for your taxes.