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?

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Answer 1

In order to convert their assets to cash the assets must be sold, which triggers a significant tax bill. What they often do instead is borrow against their assets since loans aren’t taxable. So if a billionaire needs a lot of cash they get a loan then repay the loan out of the interest/investment income generated by the assets they used as collateral on the loan.