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?
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Most people are rich because they own companies or parts of companies. Some famously don’t take a salary from the company and only make money when the company makes money. Often those shares are restricted from selling or not traded on exchanges, so they can’t sell to finance their lifestyle. They can borrow against those assets, but if the stock goes down, the bank suddenly wants their money back or they want more assets to hold for collateral.
On the expense side, it depends how rich. It’s fairly easy to burn through a few million on suits, watches and a house suitable to your position. Those are kind of ordinary business expenses just to maintain the appearance of a successful entrepreneur and you need to pay lawyers and accountants and private school for the kids. Maybe a nice vacation once or twice a year.
For the fabulously wealthy, just buy a yacht you only use a month every year and your paying 10 million a year upkeep on a 100 million yacht. Business not good this year and nobody wants to buy your yacht? Sorry, the bank wants it back.
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