LogFAQs > #963336414

I read recently taht the super rich (billionaire status) are rich because of majority of their wealth is in stock. So, in order to get cash, one option is to sell some of their stock to buy stuff. However, for many of them, they don't want to do that. They borrow against the value of their stock.

So if they buy a hundred million dollar property, they don't sell their stock to get it. Instead they borrow money with their stock as assurance. That way they continue to have their stock and have the house. Kinda like having your cake and eating it too.

What I also read was that they normally continue to live that way indefinitely as long as their stock is still valuable. They can continue doing this until they die, at which point they'd have never needed to pay back the loan. Of course, after death the lenders can move to get their moneys worth by liquidating some of the rich guys assets, but he's already dead. Why does he care?