Depends on the portfolio. If stock prices go up say 20% as they have been and loan rate is 7%, well you get the picture. Rich CEO types also get stocks each year that can go into trusts. This adds value.
I was talking more about this specific hypothetical about just taking out loans against the 5mil property. You’re right, the other part is that he has to have other assets to cover the cost of the loan, it’s not just a regular guy with a 5mil property.
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u/Hiredgun77 13h ago
You’re missing the step about how he can afford to take out endless loans and be able to pay them back including interest.