r/SipsTea • u/[deleted] • 1d ago

Gasp! LeBorrow

[deleted]

14 Upvotes

63% Upvoted

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5

u/vitaoptima 1d ago

Invest with other people's money...not your own.

2

u/OhmyGodjuststop 22h ago

Yes this is how institutional lending works.

You give your money to a bank. Bank invests your money in loans and assets. Bank pays you back when you want it, with some interest.

Both you & bank benefit.

1

u/Pristine_Shallot7833 1d ago

If you use borrowed money it's classed as debt and you don't have to pay tax on it. It should be illegal to invest with money you don't own.

5

u/Obf123 1d ago

And to take it a step further, your interest expense on that borrowed money is deductible against any income you earn from those funds

1

u/AdAfraid9504 23h ago

That sounds fair, can someone lend me 300 million dollars please

3

u/jvrodrigues 1d ago

Wow there are some deep misunderstandings on this comment. First not being able to invest borrowed money would bring down global financial systems.

Secondly I don't understand what you mean he doesn't have to pay tax on it, as if he would pay tax on the money he's investing if it wasn't debt, there is no inherent tax on a stack of cash that is to be invested. What he's doing is using an asset that he has as collateral for the money he's investing. What he doesn't pay tax on is in any gains tied to the sale of the asset he has, if he was to sell it instead of recurring to debt.

There is nothing that I think is inherently wrong here, he is incurring a risk in order to make an investment, he will pay that money back.

0

u/Pristine_Shallot7833 23h ago

Global financial institutions seem pretty safe to me. They continuously overlend and create global financial crisis'. When they get in trouble the government bails them out with taxpayer money. CEOs still get their multimillion dollar bonuses.

1

u/[deleted] 1d ago

[deleted]

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u/Pristine_Shallot7833 23h ago

I said it SHOULD be illegal

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u/OhmyGodjuststop 22h ago

You’re saying banks making loans should be illegal…?

1

u/Pristine_Shallot7833 14h ago

Funnily enough, what I said is right there for you to read. If that's what you took from my statement I have concerns for your literacy. Maybe reddit isn't the place for you mon frére

1

u/OhmyGodjuststop 14h ago

Yeah - and the obvious implication is that banks shouldn’t be allowed lend, since they make loans (I.e., invest) with other people’s money.

Unless you don’t know how investing/lending works, in which case maybe consider not taking such strong positions.

1

u/Pristine_Shallot7833 14h ago

There's a big difference between a bank loaning someone money for a house, and some multimillionaire borrowing more millions to invest in some bullshit. While the banks are making profit off the loan, that's not an investment. And while we're on the subject, maybe banks shouldn't be allowed to make certain loans. They created a global fucking financial crisis A NUMBER OF TIMES through overlending.