As far as I understand it, a billionaire’s wealth is wrapped up in stock, which is used as collateral to borrow money to actually spend. So how do they pay off those loans? With other loans? Loans all the way down?
In: Economics
Financial literacy on Reddit is next to zero. Some people think the rich have no money just stocks while you have others who think that billionaires have a billion dollars in a bank account somewhere.
They pay them off with their own money in increments, they pay them off with earnings from those loans depending on, etc. There’s lots of reasons to use a loan if you’re wealthy, you have the financial mobility to not be tied down by it and instead of dumping a huge pot of money at once you can repay it over time with minimal interest.
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