The thing that bothers me when people say “oh its unrealized gains, it’s not real money” is that they use those unrealized gains as collateral for loans of real money. They effectively ARE that rich.
There are completely different rules when you are that rich. Look at Trump, he bankrupted how many businesses and banks STILL lined up to loan him money. At the very top, your trading favors and power.
If this is all Nvidia stock let him try to cash out and see what happens.
The thing that bothers me when people say “oh its unrealized gains, it’s not real money” is that they use those unrealized gains as collateral for loans of real money. They effectively ARE that rich.
It’s BS that you can borrow against it. If he did sell it the valuation would drop.
As far as I’m concerned, that’s the point at which unrealized gains should be taxed: as soon as you’re using it as leverage
So how do they pay the loans back if the liquidity isn’t there?
With money they loan from a bank, using whatever they bought with the previous loan as collateral.
It’s credit all the way down.
Banks don’t take this into consideration when assessing collateral?
There are completely different rules when you are that rich. Look at Trump, he bankrupted how many businesses and banks STILL lined up to loan him money. At the very top, your trading favors and power.