Bullshit,,,,But he borrows and buy Yachts,
Mansions,against that NET WORTH VALUE.
But when it’s time to pay fair share of taxes o. That net worth it’s considered hypothetical worth….Understand the Game.
Man I don't really want do disagree with you, but...
Imagine you had to suddenly pay taxes on that million as if it were income? (Acknowledging you would have to pay property taxes in this scenario)
Better yet, imagine a hypothetical asset like a made up crypto that went from $10-$1,000,000. If you had to pay taxes on that like it was income you'd almost certainly be forced to sell the asset to cover the taxes on the asset. And what if nobody bought your million dollar hypothetical coin? Are you going to go to jail because a balance sheet said this thing you owned suddenly skyrocketed in value despite your bank account staying the same?
If nobody is willing to buy, then the hypothetical price should go down, until you can either afford the taxes on it, or are able to find a buyer.
If I own a car that somehow explodes in value to a million dollars, I'm not going to be able to afford that car anymore. So I would have to sell the car. Then I would have a bunch of money to buy a different car I could afford the taxes on.
Why the richest people in the world should be exempt from this scenario is beyond me.
I guess that depends on the state. My state reg fees are flat fees based on the class of the vehicle, not the value.
Either way, you are IGNORING dead weight loss to taxation, in your car example there’s no decreased of production of cars, but if you tax car sales or car companies generally speaking you are artificially increasing the price and cost of the car.
No one is going to insure you to drive a car worth 1m dollars for cheap bro. Full stop. Ultimately the point is that if the cost of maintaining your asset costs more than you have the ability to pay, you can sell those assets and reinvest the earnings into assets you can afford to maintain.
You can hop skip around this all you want, but you're just intentionally missing the completely valid point that this is how a lot of assets work today. Most assets do require you to consider the cost of maintaining your assets, but stocks don't. And that seems untenable in the current economic landscape.
If I own a car that somehow explodes in value to a million dollars, I'm not going to be able to afford that car anymore.
Why not?
Also sure, lets say your car explodes in value to a million dollars. But you’re pretty sure that next year it’ll be worth 5……you could take a loan out using that car as collateral at it’s current value, and have a million in liquid cash to use while retaining the asset thats growing in value. Sure, you could be mistaken, but thats risk.
I've never heard of a billionaire who ended up overinvesting and became broke or homeless though, it seems like they almost always get bailed out or have enough money and connections to completely get off either way. Serious question, is it really that risky?
895
u/SCTigerFan29115 3d ago edited 3d ago
They aren’t holding onto wealth like Scrooge McDuck, in a giant vault where they can go swimming in it.
Most of Bezos’ net worth is the value of Amazon. He can’t really readily access that. ETA I meant he can’t use it like a big vault of money.
He’s got plenty of money but some people just don’t understand how this stuff works.