5 ms·

I imagine extremely wealthy people buy everything cash.

JMTQp8lwXL 7y ago
I assumed it meant wealthy people continually get a clean slate when they mess up. So there is no concept of maintaining credit when allotted unlimited "redo's".
- mistrial9 7y ago
  .. at least in the US, this is not true.. some wealthy people have serious marks on their credit scores and it does follow you
flexer2 7y ago
Extremely wealthy people (i.e. 9-digit+ net worth) have teams of lawyers and accountants that figure out the optimal way to allocate the client's cash to achieve their goals. That may or may not include incurring debt, etc. Rich people borrow money too (not because they need to, but because it ultimately can make more financial sense to do so). (there are of course exceptions to this, there are rich people bad with money or who want to look like they're richer than they actually are, but in general rich people stay rich by being smart about their money)
pyuser583 7y ago
I figured it was the opposite.
dathinab 7y ago
It's more complicated then this: They indeed tend to not by thinks on rates, so not to much "uplift" in your scores. People which are wealthy tend to also try to get higher credits (for it to be worth it) and buy more expensive thinks so if they messup it's often much more expensive for banks. Not all people can handle money so there are a bunch of people which will never stay wealthy. Combined with the point above => higher rise. Some care less for penalties when paying late and might "optimize" payments in ways which are not always mean on time/good for the score. Lastly there are a bunch of wealthy people which optimized there business so that they only earn as much money as they need. They can always increase it but the banks can't trust this so the only see a person which might have problems paying back. (Note that not all of this people do illegal or unmoralic practices, some just only work as much as they need and not any bit more). Lastly there is a simple question: What does it mean if a rich/wealthy person _needs_ a credit? (Btw. it's a different matter if it's not a private credit but for a company.)
dylan604 7y ago
Wealthy people don't leave money on the table. If they can earn "free money" with a credit card point game, then why not? Some of the cheapest people I know are wealthy. Cheap as in, they negotiate the hardest for the lowest price, even though it is meaningless to them. I have been told out right on more than one occasion that it's not about trying to make something affordable, but more of the shear enjoyment of making someone else take less just because they can.
- primitivesuave 7y ago
  Second this. When my extremely wealthy CEO overheard I was in the market for a new vehicle, he happily volunteered to get on the phone and pit 3 local Ford dealerships against each other in a bidding war for my business. I ended up saving an additional 12% off what I thought was already a discounted price. I think a majority of us regular people don't know how to tap into that ruthless negotiation when buying cars, houses, mattresses, etc.
inopinatus 7y ago
Extremely wealthy people have a tax-shell liability-shielded offshore trust operating company buy things for their benefit using leveraged debt secured on junk assets. In the rare case where for some compliance reason they must have a more direct link to the asset, they’ll transfer the item to a holding entity (in which they have indirect but controlling interest) and then lease it back. If the unthinkable occurs and a very wealthy person commits to actually buying something directly themselves by mistake, they (or rather, their staff) will demand delivery before payment and then either stiff you on the bill or pay at most 70% of it, six to eighteen months later. These are practices established centuries ago by the British aristocracy and remain alive today.

I assumed it meant wealthy people continually get a clean slate when they mess up. So there is no concept of maintaining credit when allotted unlimited "redo's".

mistrial9 7y ago
.. at least in the US, this is not true.. some wealthy people have serious marks on their credit scores and it does follow you

flexer2 7y ago

Extremely wealthy people (i.e. 9-digit+ net worth) have teams of lawyers and accountants that figure out the optimal way to allocate the client's cash to achieve their goals. That may or may not include incurring debt, etc. Rich people borrow money too (not because they need to, but because it ultimately can make more financial sense to do so). (there are of course exceptions to this, there are rich people bad with money or who want to look like they're richer than they actually are, but in general rich people stay rich by being smart about their money)

pyuser583 7y ago

I figured it was the opposite.

dathinab 7y ago

It's more complicated then this: They indeed tend to not by thinks on rates, so not to much "uplift" in your scores. People which are wealthy tend to also try to get higher credits (for it to be worth it) and buy more expensive thinks so if they messup it's often much more expensive for banks. Not all people can handle money so there are a bunch of people which will never stay wealthy. Combined with the point above => higher rise. Some care less for penalties when paying late and might "optimize" payments in ways which are not always mean on time/good for the score. Lastly there are a bunch of wealthy people which optimized there business so that they only earn as much money as they need. They can always increase it but the banks can't trust this so the only see a person which might have problems paying back. (Note that not all of this people do illegal or unmoralic practices, some just only work as much as they need and not any bit more). Lastly there is a simple question: What does it mean if a rich/wealthy person _needs_ a credit? (Btw. it's a different matter if it's not a private credit but for a company.)

dylan604 7y ago

Wealthy people don't leave money on the table. If they can earn "free money" with a credit card point game, then why not? Some of the cheapest people I know are wealthy. Cheap as in, they negotiate the hardest for the lowest price, even though it is meaningless to them. I have been told out right on more than one occasion that it's not about trying to make something affordable, but more of the shear enjoyment of making someone else take less just because they can.

primitivesuave 7y ago
Second this. When my extremely wealthy CEO overheard I was in the market for a new vehicle, he happily volunteered to get on the phone and pit 3 local Ford dealerships against each other in a bidding war for my business. I ended up saving an additional 12% off what I thought was already a discounted price. I think a majority of us regular people don't know how to tap into that ruthless negotiation when buying cars, houses, mattresses, etc.

inopinatus 7y ago

Extremely wealthy people have a tax-shell liability-shielded offshore trust operating company buy things for their benefit using leveraged debt secured on junk assets. In the rare case where for some compliance reason they must have a more direct link to the asset, they’ll transfer the item to a holding entity (in which they have indirect but controlling interest) and then lease it back. If the unthinkable occurs and a very wealthy person commits to actually buying something directly themselves by mistake, they (or rather, their staff) will demand delivery before payment and then either stiff you on the bill or pay at most 70% of it, six to eighteen months later. These are practices established centuries ago by the British aristocracy and remain alive today.