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>He was worth $16 billion at the time, meaning he could have bought that house and a hundred more outright That's not necessarily true. I mean yes, he could, b
by simonh 4y ago
>He was worth $16 billion at the time, meaning he could have bought that house and a hundred more outright
That's not necessarily true. I mean yes, he could, but to do that he'd have to sell a chunk of Facebook shares. He doesn't have $16bn sitting in a big warehouse piled up with mountains of dollar bills, or in a checking account. The $16bn is the notional value of him controlling Facebook, and he still wants to control Facebook.
The way to leverage that into wealth without selling shares is to take a loan out with the shares as collateral, but that's just essentially a Mortgage again collateralised against the shares instead of the house.
- HWR_14 4y ago> The $16bn is the notional value of him controlling Facebook, and he still wants to control Facebook. I mean, I want to buy things and have the numbers in my accounts go up too. It's not outrageous that when you get some things you have to sell some of your other things.
- simonh 4y agoI don't understand why it's so awful if he just takes out a loan. I've taken out loans and mortgages many times. So what? All this shiv the rich crap just seems so petty and mean spirited. Bah, they have nice things, let's take them away!
- HWR_14 4y agoI have no problem with him taking out a loan. I have a problem with him avoiding taxes by taking out a loan.
- simonh 4y agoI avoid takes on my mortgage too (here in the UK). Surely the point of the rule of law is that the law applies equally, right? Or is people being rich and having rights too much to bear. Sure, well off people should pay more tax, that's fine. Advocate for tax reform, sure. But I find this kind of mean spirited jabbing at basic rights just such a miserable attitude. It's not as if this particular point really makes any meaningful difference anyway. It's not even got anything to do with the rest of the article at all, which by the way is grossly factually incorrect. Home ownership in the USA isn't not a "small share of Americans", home ownership rates in the US are at 65%. Vast swathes of Americans do participate in the investment markets through their pensions. US pension funds now account for about 60% of assets in the P22 largest markets, and pension funds account for about 1/4 of all assets under management globally.
- HWR_14 4y agoThe point is that borrowing money for your entire lifetime based on inflated stock prices to avoid capital gains taxes is bad. Not that mortgage interest is deductible.
- ilammy 4y agoThe point is, with a certain rates of interest, inflation, and growth, paying mortgage from salary ends up cheaper than exchanging a house for shares. That's, kind of, why wealthy people tend to be wealthy: they do know that there is a difference. And do have this asset of "unallocated cash flow" that they'd rather sell instead of other assets.