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I'd imagine that wealthy individuals are highly leveraged. In other words, rather than selling assets to buy things they take loans against those assets to buy
by tantaman 5y ago
I'd imagine that wealthy individuals are highly leveraged. In other words, rather than selling assets to buy things they take loans against those assets to buy things. This (1) prevents ever having to pay tax (2) gives them benefits from inflation and (3) gives them benefits from low interest rates as their assets appreciate faster than their interest rate consumes money
- Manuel_D 5y agoMost sources I read indicate the opposite: poor and middle class people are much less likely to be debtors rather than creditors. They're more likely to have an auto loan rather than own a car outright. Likewise, they're more likely to have a mortgage on their home rather than own it. The wealthy, by comparison, are more likely to invest their money, issuing loans to other people.