You don't even need a significant return on capital for the strategy to pay off, it just has to slightly beat the interest on the loan over a very long time horizon. Consider these numbers: $100 million subject to capital gains, $10 million in cash needed for expenses, a 2% interest rate, a 2.5% return on investment, a 20% capital gains tax, and a 10 year timeframe.
The borrowing strategy starts with $100 million and a $10 million loan, and ends up with $128 million and a $12.2 million loan, so net $115.6 million (and the interest is likely tax deductible).
The taxpaying strategy starts with $88 million and ends up with $112.65 million.
Tech stocks are down 50-75% now. You think it was smarter to borrow money against that equity rather than sell and pay taxes?
Like I said, it's all theoretical, yet no one has actually shown me numbers that makes sense.
Delay selling equity? Sure? Delay it until you are dead? No way (unless you're within a few years of dying).