I’ve seen in a few places that the super-rich can unlock their wealth ‘tax free’ by taking out a loan secured against their shareholdings or other assets, then use the cash from the loan to buy real stuff.
But how do they pay back the loan?
In: 196
The whole idea of a loan is that you borrow what you want today and pay for it in smaller increments, thus making it more affordable than if you had to pay for it all at once.
The super-rich still have income. They didn’t stop earning money because they became super rich. They borrow against their assets and pay down the loan with their income like anyone else. The difference is, if something goes sideways for them, they can sell off assets to cover debts if they really have to.
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