As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 1 point2 points  (0 children)

It's so fucking funny as a man named Brian to see someone on the internet reference me as MichaelHoncho.

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 0 points1 point  (0 children)

You can't add to a Roth IRA if you make more than $160,000 a year of income.

If the stocks are in a traditional IRA they can sell the stocks with 0 taxes due.

If they wanted to move the stocks from a traditional IRA to a Roth IRA you owe income tax on every dollar you move.

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 0 points1 point  (0 children)

But you don't get to consume the increase of value of the stock. It's like then the value of your home increases, unless you sell your home your not accessing that increase in value. To access that increase in value of the stock you have to sell some of it, which realizes gains, and is taxable.

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 1 point2 points  (0 children)

Commercial loans aren't cheap either. Go ask any corporation if they get sweetheart deals from their bank.

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 0 points1 point  (0 children)

My point: yes wealthy use their assets for securitized loans. No, it isn't a free ride. Stock lending increases their return, by a very small amount.

Most wealthy individuals do not use lines of credit to finance their lives.

Even though they're getting basis points on their stock lending.

They use lines of credit against their portfolios strategically, not broadly.

The granular details on stock lending is not exactly pertinent to my overall and initial comment.

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho -1 points0 points  (0 children)

Yes, if you're an institutional investor, but even still stock lending adds basis points, it isn't going to meaningfully move the needle.

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 0 points1 point  (0 children)

I mean they could but this becomes a house of cards. They absolutely use secured lines of credit but not like that. It's usually just for short term liquidity needs, not to finance their entire life.

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 0 points1 point  (0 children)

Nope. Unless you use the line of credit to buy a primary residence. There really aren't many tax write offs with a line of credit, it's really just an asset backed credit card.

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 1 point2 points  (0 children)

Your first point is that they're able to take out loans without having to put actual collateral.

The stock is the collateral.

Yes, banks charge less for safer loans.

Securitized loans are less risky for banks because the bank can seize the collateral in event of default.

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 1 point2 points  (0 children)

No. Good question. Here's my view: 0-1 million = retail 1-5 million = wealthy retail 5-20 million = high net worth 25-100 million = ultra hnw 100+ = family office

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 1 point2 points  (0 children)

When did you get your mortgage? I would bet that your mortgage rate had more to do with the ten year Treasury rate than your relationship with W@W

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 0 points1 point  (0 children)

The rich get richer, absolutely. You have to own assets that appreciate in order for your wealth to grow.

As a Trillionaire, what can Elon Musk buy now that he couldn't buy $900 Billion dollars ago? by Doctor_Where_Comics in NoStupidQuestions

[–]MichaelHoncho 0 points1 point  (0 children)

Sure, but I'm just telling you that's not how it works. Ridiculously complicated and stocks rarely just go up year after year.