Why A Holding Company Builds Wealth

Any time you encounter an investment concept that you have never heard of before, you can be pretty sure that it exists for at least one of the three reasons: (1) tax minimization; (2) marketability; or (3) liability. The use of the holding company structure is no different. A holding company is an investment tool of the wealthy that is useful if you want to lower taxes, transfer assets easier, or avoid liability.

For instance, let us that over the course of your life, you become one of those secret millionaires in Quincy, Florida that makes a lifelong fortune by investing in Coca-Cola stock. By the time you are middle-aged, you find yourself owning 10,000 shares of KO that pays out $14,000 in dividends every year.

Rather than reinvest directly into more KO shares, you decide that you want to buy a duplex to diversify and start collecting rental … Read the rest of this article!