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Emm.. you don't actually have 10 billions in your bank account.. or a 100... you own eg. Amazon (or a lot of stocks from it), and you sell cheap crap to random
by ajsnigrutin 5y ago
Emm.. you don't actually have 10 billions in your bank account.. or a 100... you own eg. Amazon (or a lot of stocks from it), and you sell cheap crap to random people, and other random people value your company at many billions, and are willing to pay whatever the price is for the stocks of the company.
- blunte 5y agoBut with billions in assets, you can borrow so greatly that you never have to spend a penny of your own assets. And hey, even if you do sell some of your stock, a 20% cap gains tax isn't so much when your stock is going up faster than 20%. Also, random people don't value your company at billions. Other unreasonably wealthy groups of people seek places to stash their wealth, since there is a glut of money in a few hands. So they find the most stable or reliable stores of wealth. Amazon stock is certainly one.