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
1) Some billionaires do carry loans until they die and then pay them from the estate.
2) Some billionaires sell stocks to pay off loans.
Others have said those but there’s one thing I haven’t seen yet:
3) Billionaires often receive higher interest rates for borrowing than they pay for lending… that is, the value of their assets grows faster than the value of their debts. I think this is the source of the perception that billionaires have some “infinite money hack” (beyond the infinite money hack of already having more money than a person could possibly spend on things they can experience.)
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