• Gerudo@lemm.ee
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      1 month ago

      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.

        • Revan343@lemmy.ca
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          1 month ago

          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

      • asdfasdfasdf@lemmy.world
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        1 month ago

        Banks don’t take this into consideration when assessing collateral?

        Lol, who downvotes a question?

        • Gerudo@lemm.ee
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          1 month ago

          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.

        • sugar_in_your_tea@sh.itjust.works
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          1 month ago

          Take what into account? They basically look at current valuations and offer loans up to some fraction of that amount.

          And that’s generally the way the ultra-rich operate, they don’t actually sell anything, they just borrow against their assets. They punt the can down the road until they die, at which point those unrealized gains get stepped up in basis for those who inherit it. If you have enough stock assets, you can service the debt with the capital gains you’re forced to realize (i.e. dividends).

          So the bank sees someone with $100B in assets asking for a $10M loan or whatever, and they’re completely happy to offer that, because even if the stock gets cut in half, he can still pay the debt.

    • NIB@lemmy.world
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      1 month ago

      You dont need to sell your stocks to access that wealth. You can use that as collateral to take loans or exchange stocks.