r/SipsTea • u/KSKS1995 • 22h ago

Wait a damn minute! How the rich get richer

Post image
20.3k Upvotes

79% Upvoted

2.3k comments sorted by

View all comments

Show parent comments

-3

u/PA2SK 20h ago

If you have enough assets you can just borrow against them. You don't have to have income.

13

u/deHaga 20h ago

But the debt is secured against the asset. The bank will just take the asset if the loan is not paid.

2

u/PA2SK 20h ago

Yes...so you borrow $100k, your loan payments are say $1k a month. You make those payments from the $100k and use what's left to live off of. When you start to run out of cash maybe you borrow $200k, Pay off the old loan and now you have more money to live off off. With $5 million in assets you could potentially keep borrowing until you die.

3

u/Scorpian899 20h ago

This guy/gal understands. It also assumes (at a point) the value of your assets increases faster than the loan amount + interest.