I read that when Michael Jackson died, he was $500 million in debt. How does someone get into that kind of debt?

Question

I read that when Michael Jackson died, he was $500 million in debt. How does someone get into that kind of debt?

In: Economics

Answer 1

Money sort of works different for the ultra wealthy.

There is a point where it makes more sense to leave your money wherever it is and take out loans to pay for everything using the interest on your money to pay of the interest in the loans.

Like if my money makes 10% a year and I can get loans at 5% a year I can take 5% from my money and pay off the loans and still be up 5%.

I’m not saying this is the case with mj it’s just an example of how things are different at gigantic sums of money.