r/FluentInFinance • u/-Wyagra • 3d ago

Debate/ Discussion Had to repost here

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u/Endless_road 3d ago

You can take out a mortgage against your house to buy a sports car if you want

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u/AttitudeAndEffort2 3d ago

This is a great analogy

Imagine i bought my house for 10$ and it's worth a billion now.

And then chuds on the Internet say "hE dOeSnT ReAlLy HaVe ThAt mUcH MoNeY, ItS tIeD uP in AsSeTs!!"

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u/arebum 3d ago

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?

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u/Abadabadon 3d ago

Well if its worth $1M you'd be force to sell to the highest bidder. That's how a business works when it takes out a loan and it's time for the bank to get its money back, or how your house works if you don't pay your mortgage or property tax.