How come Billionaires don’t have actually billions of dollars and what can they do with their asset money.

Question

I already know that billionaires do not in fact have billions of dollars lying around, rather the money is assets in business, but how come they don’t get all the money when they rack it all up? And what can they do with this “asset” money if they don’t technically have it?

In: 0

Answer 1

They have the money when they sell the asset. Also, they can leverage against it. If you tell a bank that you have a million dollars in assets, they will give you money so you can get $2 million in assets. And so on. You can do things like lie to banks and inflate your assets so they will lend you more money than they normally would have, and also lie to the IRS and deflate your assets to avoid taxes. There are all sorts of ways you can have money, even if this is not liquid.