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Interest rate tends to reflect the risk of investment. Rich people are less risky to lend money to than poor people.
by NeutronBoy 11y ago
Interest rate tends to reflect the risk of investment. Rich people are less risky to lend money to than poor people.
- x5n1 11y agoIt was meant to be a rhetorical question. But yes this is generally true. But they can afford the interest rate much less than rich people (poor people).
- NeutronBoy 11y agoAh, I wondered if you were serious or not. But yes, it's another one of life's cruel injustices that helps money beget money
- joevandyk 11y agoWhat someone can afford doesn't necessarily affect the price.
- Natsu 11y agoWhat really affects the price is what someone's best alternative is. If you have no alternatives, you get exploited.
- _nedR 11y agoThe power of compound interest works both ways. For the rich, It can mean a spiral upwards, as they can exploit the difference in interest rates of different investments to make profit. For the poor, it often means a spiral downwards into greater debt, more frequent defaults and ever higher interest rates.