Private Equity: lowest threshold and how the rich escape taxes.

Hi all,

This week, I listened to an interesting Belgian Entrepreneurs podcast (episode 110) with Thomas Guenter from Finhouse in my car.

It was wonderful to experience Thomas's calm demeanor while driving. He can explain finance topics in a very clear, calm, and, most importantly, unhurried way. This immediately makes him come across as a very reliable figure. I don't know Thomas personally, but that was my first impression.

Towards the end of the podcast, it discusses private equity. At Finhouse, they capitalize on the fact that one can invest from as little as 100k euros. They pool everyone's contributions into large funds and then invest them in private equity funds, which typically require a million to often as much as 2.5 million euros.

These funds acquire or coach companies in which they hold stakes, only to then sell them for a significant capital gain or take them public and cash out. As a result, the money is tied up for a while. If your money is spread across different funds, it takes time until a certain contribution is realized before you get a portion of it back. However, a fantastic return is guaranteed.

Actually, I was also a little shocked. Thomas explains how companies can escape corporate tax and use the profits from such private equity investments to pay out profits to themselves as business leaders.

I'm also trying to get something off the ground myself, because I feel that I enjoy being creative and entrepreneurial. But the gap between rich and poor in our country — and throughout the world — deeply affects me. In reality, you can only make that 100k entry (which is the lowest in our country) if you can spare your money for a number of years; at least six, but usually up to 14 years. No one invests an amount like 100k if they don't have that 100k to spare. That is only for the lucky few.

And the Belgian government thinks it will hit the jackpot with the capital gains tax, but as Thomas himself explains, according to him, this removes the last fiscal bright spot for many entrepreneurs in our country. An ordinary employee is taxed around 50%, while someone who invests through such a fund — apart from some fund costs — only pays capital gains tax and sees 10% withheld on their profit. The reality and gap between the super-rich and everyone else is also widening as a result.

By listening to such podcasts, we become wiser. We see the world better as it truly is. A world in which a middle class, which thinks it is free, is stuck in jobs where time is exchanged for money (and which is also taxed at 50 percent). But it is also a world where everyone has to make their own way.

I hope to help less fortunate people with my channel as well. I want to do this by keeping my subscription cost deliberately low and offering as much value as possible to as many people as possible. I also want to clearly show where the least and most risky investment strategies lie, depending on your age and the risk profile you have.

In my ideal world, everyone realizes that economic knowledge is important to have a broad view of the world. Of what is coming your way and what the world will look like in ten years. The companies of today are, after all, building the reality of the future. Actively reading about investing gives you a crystal ball; it's Google Earth in glass.

Be safe in what you do in the investment world, but above all, be eager to learn.

The link to the YouTube episode of the Belgian Entrepreneurs podcast: https://youtu.be/HRUiYBxo7K8?si=Gyl8lHgXO3aI2USL

This is not affiliate marketing and it brings me nothing, but it will bring you something if you take the time for it.

If you have read this far: thank you very much! Enjoy gathering knowledge and benefit from it.

Best regards,

Team Fintube Digest