How can rich people drop all so much money on a daily basis but when they need larger amounts of money, they need to liquidate assets?
Yes, I know that wealth can come from owning assets outside of cash, but how can you spend hundreds of thousands of dollars a month if a their money and wealth is all tied up?
In: 1
Even those with illiquid wealth like stocks or real estate still have some money coming in from dividends, interest payments, rents, etc. That may be sufficient to cover day to day expenses, while they need to sell off stock for larger purchases. The rich also often have lines of credit they can tap into, secured by their assets. This again gives them access to cash they can drop, but at some point they’ll need to pay down the credit line by selling assets.
Latest Answers