Ben Mallah transformed from a “garbage man” into a multimillion-dollar real estate empire builder, and he credits one specific tax strategy as the cornerstone of his wealth accumulation. Speaking on the "Iced Coffee Hour Podcast," the outspoken investor revealed how the 1031 exchange became his financial game-changer and why he believes mindset trumps everything else in wealth building.
The $50 Million Tax Strategy
Mallah doesn’t mince words about his wealth-building secret: the 1031 exchange. This tax provision allows real estate investors to defer capital gains taxes by rolling proceeds from property sales into new investments.
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“The 1031 exchange made me who I was today,” Mallah told host Graham Stephan. “It forced me to never touch my money and instead roll it into the next deal.”
The numbers tell the story of his success. Mallah estimates he would owe approximately $50 million in taxes if he sold everything without utilizing 1031 exchanges. By continuously reinvesting rather than cashing out, he’s built an empire that generates consistent cash flow while deferring massive tax obligations.
“Without the 1031 and banks, I would have remained a garbage man,” he added, emphasizing how this strategy accelerated his growth trajectory.
Mindset Over Money: The Mental Game of Wealth
For Mallah, financial success starts in the mind. On the podcast, he explained that he has zero tolerance for what he calls “negative people” or those who aren’t actively working to improve their circumstances, even when they possess the ability to do so.
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“Many intelligent people with potential fail because their priorities aren’t in order,” he told the hosts. “They focus on partying or superficial desires instead of personal and financial growth.”
His wealth-building philosophy centers on training your brain to focus on activities that lead to financial security while avoiding distractions like gambling, excessive drinking, or trying to “keep up with the Joneses.”
The Full-Time Job of Managing Wealth
Despite his success, Mallah told Stephan that he treats wealth management as a demanding career. He described managing his portfolio as requiring “constant thought, homework, and calculation of tax ramifications, appreciation, depreciation, and cash flow” before making any property decisions.
His approach to spending reflects this calculated mindset. While he describes himself as living in moderation, he’s willing to splurge on experiences that enhance life or provide convenience—but only when the cost won’t “make or break” him. For example, he’ll fly private for his son’s graduation but sold a $500,000 van he rarely used, preferring to invest that capital for returns.
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Defending Capitalism and Opportunity
Mallah also used the interview to voice his opposition to abolishing the 1031 exchange, calling it “what capitalism is all about.” He argued the strategy encourages growth, job creation, and economic development by incentivizing investors to continuously reinvest rather than sit on cash.
He pushes back against wealth inequality concerns, pointing to available tools like FHA loans and business licenses accessible for small fees. “Everyone has the ability to try to better their life,” he said, emphasizing that success comes from taking advantage of available opportunities.
The Legacy Mindset
Beyond personal wealth accumulation, Mallah finds satisfaction in helping others reach “a new level.” He shares stories of people with troubled backgrounds who changed their lives after being inspired by his journey.
“Making the most of life is crucial because it’s short,” he said. While focused on setting up his children and grandchildren for success, he acknowledges that controlling future generations’ financial discipline remains challenging.
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