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
You do not have to pay off loans, well eventually they will have to be paid off but the bank is happy to just let you have your loan as long as you pay the interest. Or even if your collateral grows more in value then the interest they just add the interest to the existing loan.
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