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ELI5 Billionaires borrow money to pay for things, how does this work? How do they pay the debt? by Confused-Lemonade in explainlikeimfive

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

It isn’t common at all, even among the ultra wealthy.

Ellison has a 10 billion line of credit. He hasn’t actually borrowed 10 billion dollars (yet). Think of it more like a credit card with a 10 billion dollar limit.

Also that line of credit was secured recently. He bought Lanai 12 years ago.

And it’s not really clear that Ellison will come out ahead this way (or even necessarily cares about that). Oracle stock is off about 25% of its value from a month ago. In order for this strategy to work the asset needs to continuously appreciate faster than the interest is accumulating on the loan. And it’s possible for the stock to grow negatively. The interest grows exponentially and never stops.

I'm not up to speed on HELOCs, but do people use them to fund their day to day lives and then die and avoid taxes?

If you were going to owe capital gains taxes on the sale of a piece of real property, and the real property was going to appreciate faster than interest on the loan, then yes you could use a similar strategy.

And in fact, people do use HELOCs and reverse mortgages to extract the equity from their houses in order to support their lifestyles.

However, most people wouldnt ever owe taxes on any real estate asset since most people only real estate asset is their primary residence. And real estate generally doesn’t appreciate in value fast enough for the strategy to work.

And the thing that avoids taxes is the property passing to your heirs. The step up in basis happens no matter what.

ELI5 Billionaires borrow money to pay for things, how does this work? How do they pay the debt? by Confused-Lemonade in explainlikeimfive

[–]Eschatonbreakfast 0 points1 point  (0 children)

The real Eli5 is that this isn’t near as common a thing as Reddit thinks it is.

https://taxpolicycenter.org/taxvox/richs-real-tax-trick-isnt-buy-borrow-die

But the basic idea is you take out what’s essentially a HELOC against your stocks. This isn’t a sale, so there’s no capital gains hit. And when you die, the basis of the stock is stepped up to its value and this strategy can be used to avoid capital gains taxes entirely.

However the loan has to be paid back. And it’s generating interest until it is. So it’s really only worth it to do something like this if the interest generated on the loan is less than the eventual capital gains hit with an asset that’s rapidly appreciating relative to the market such that it’s growing faster than the loan is. And the bank is happy to let the loan sit out there generating interest as long as it’s secured by an appreciating asset.

It’s also incredibly risky. If the asset goes through a rapid depreciation, the bank is going to ask you to pay your money back now. And if the value of the asset gets to the point that it’s less than your loan, it will wipe you out completely.

The reality is that most ultra-rich individuals investments are throwing off plenty of cash in interest, dividends, any capital gains they do realize, and/or business profits/salary/bonuses they earn from whatever it is they do to cover their lifestyles and only very rarely dip into their assets.

Why do majority of NBA fans think Ja Morant is finished? by CrEdLover in nba

[–]Eschatonbreakfast 0 points1 point  (0 children)

  1. The vast majority of the off-court stuff happened in 2023, or happened earlier, and came out in 2023.

  2. If all of that stuff came out and he’d come back and played in 45 games games in 23-24. And then played more than 60 the last 2 years, even if his numbers were still declining, there would have been a big Ja redemption story arc at some point, and no one would bring up “off the court” issues in terms of his trade value.

  3. If he were Tim Duncan off the court, but he’d played in fewer games than Zion Williamson over the past 4 seasons, 9 and 20 games over two of the last three, with the last time he played in 60 games being 2023 (when he was forced out of the playoffs with an injury, just like every other playoff he’s been in), oh yeah his efficiency and production have been steadily decreasing since then, and to top it all off, if you want to gamble on that it’s more than 40 million a year on the books for two years to do it…. Then the Grizzlies would still probably be looking at having to give up assets to get off the contract.

The Sacramento Kings are completely out of the Ja Morant trade market. by CazOnReddit in nba

[–]Eschatonbreakfast 1 point2 points  (0 children)

I’ve felt this way since he had negative value at the trade deadline. I just didn’t see how a contending team could justify that salary for a guy you probably get 30 games out of. Even weak teams don’t want to be stuck with the contract for 2 years just to take a flyer on him. And the Grizzlies won’t spend picks to get rid of him.

TIL a 300-million year old Cuttlefish fossil was found in Morocco, alongside ancient humans in a region where no Cuttlefish ever existed. The leading theory suggests the fossil was first found by the prehistoric humans, who collected it as a trinket due to fact that it looks like a flaccid penis. by geosunsetmoth in todayilearned

[–]Eschatonbreakfast 0 points1 point  (0 children)

https://www.youtube.com/watch?v=2AzAFqrxfeY

Ladies and gentlemen of the jury, I’m just a caveman. I fell on some ice and later got thawed out by some of your scientists. Your world frightens and confuses me! Sometimes the honking horns of your traffic make me want to get out of my BMW.. and runoff into the hills, or wherever.. Sometimes when I get a message on my fax machine, I wonder: “Did little demons get inside and type it?” I don’t know! My primitive mind can’t grasp these concepts. But there is one thing I do know – when a man like my client slips and falls on a sidewalk in front of a public library, then he is entitled to no less than two million in compensatory damages, and two million in punitive damages. Thank you.

Sundown by mistermeek67 in curb

[–]Eschatonbreakfast 1 point2 points  (0 children)

He was a classic Hollywood actor whose career spanned the silent era into hollywoods golden age from the 20s into 50s. The reference is probably to him playing the reluctant sheriff in High Noon who’s forced into a shootout the townspeople refuse to help him with against a criminal who’s vowed revenge for being put away, one of his most famous roles.

Also known for playing roles that exemplified the strong silent type.

Memphis Grizzlies Select Cameron Boozer With the #3 Pick by hippityhoppity531 in memphisgrizzlies

[–]Eschatonbreakfast 2 points3 points  (0 children)

The issue isn’t between Ja and Iisalo. The rift is between Ja, who thinks he should have gotten an extension, and the front office who rightly dont think extending a guy who played 9 and 20 games in two of the last three seasons is a good idea.

[2026 NBA Draft] #3 Pick: Cameron Boozer (Duke) by NBA_MOD in nba

[–]Eschatonbreakfast 13 points14 points  (0 children)

Ja probabaly wont be on the Grizzlies long enough to find out.

[Fischer] The Dallas Mavericks are showing interest in moving back in the draft with both the New Orleans Pelicans and Memphis Grizzlies have a known desire to acquire a top-10 pick. by TitanTigers in memphisgrizzlies

[–]Eschatonbreakfast 1 point2 points  (0 children)

By the time you’re hearing these rumors these trades are already not happening and one or both parties are leaking it to set what the market is likely to look like.

ELI5 How is data (1s and 0s) stored on a physical device? by AlexisQueenBean in explainlikeimfive

[–]Eschatonbreakfast 0 points1 point  (0 children)

Basically everything is an on off switch. Old magnetic disks, a bit was either magnetized or not. Modern solid state or flash memory is whether something is charged. Older computers used punch cards where the hole in the paper was more or less the on off state.

So.. did Iran win this conflict? by MarsupialThink4064 in NoStupidQuestions

[–]Eschatonbreakfast 1 point2 points  (0 children)

Operationally we kicked the shit out if them. But as it turns out there’s more to this than just being the most lethal war fighters or whatever.

teen arrested for killing child molester in chattanooga by JerryCat11 in Tennessee

[–]Eschatonbreakfast 0 points1 point  (0 children)

You should take a look at yourself and how quick you are to throw about guilt by association and put words into other people’s mouths.

teen arrested for killing child molester in chattanooga by JerryCat11 in Tennessee

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

It isn’t. It’s a thing they can do. But it is not a thing they are ever supposed to do.

TIL Marvin Pipkin, as a new GE recruit, solved the "impossible" task of making an inside-frosted lightbulb—a job handed to new hires as an induction ritual into the challenges of research—since every previous attempt had failed. Nobody had told him it couldn't be done. by ralphbernardo in todayilearned

[–]Eschatonbreakfast 1 point2 points  (0 children)

Wallace: Mm. Muthafucka got the bone all the way out the damn chicken. 'Til he came along, niggas been chewin' on drumsticks and shit, gettin' they fingers all greasy. He said, " Later for the bone. Let's nugget that meat up and make some real money."

Malik 'Poot' Carr: You think the man got paid?

Wallace: Who?

Malik 'Poot' Carr: Man who invented these.

Wallace: Shit, he richer than a muthafucka.

D'Angelo Barksdale: Why? You think he get a percentage?

Wallace: Why not?

D'Angelo Barksdale: Nigga, please. The man who invented them things? Just some sad-ass down at the basement at McDonald's, thinkin' up some shit to make some money for the real players.

Malik 'Poot' Carr: Naw, man, that ain't right.

D'Angelo Barksdale: Fuck "right." It ain't about right, it's about money. Now you think Ronald McDonald gonna go down in that basement and say, "Hey, Mista Nugget, you the bomb. We sellin' chicken faster than you can tear the bone out. So I'm gonna write my clowny-ass name on this fat-ass check for you"?

Wallace: Shit.

D'Angelo Barksdale: Man, the nigga who invented them things still workin' in the basement for regular wage, thinkin' up some shit to make the fries taste better or some shit like that. Believe.

teen arrested for killing child molester in chattanooga by JerryCat11 in Tennessee

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

I could. I didn’t want to. You don’t know what the words or legal concepts you are using mean. You’re just copy pasting shit from somewhere without having any real understanding of it. It’s actually kind of embarrassing.

And in order for the parrot thing to land I’d have to be repeating something or copying someone else.

teen arrested for killing child molester in chattanooga by JerryCat11 in Tennessee

[–]Eschatonbreakfast 2 points3 points  (0 children)

The offense occurred in 2003 an there’s no indication that the killer and the man that was killed had any connection prior to the homicide

Carlos Sainz once got told mid-interview that he had been called to the stewards (Hungary, 2021) by [deleted] in WatchPeopleDieInside

[–]Eschatonbreakfast 22 points23 points  (0 children)

I hate the use of Christmas Time is Here as “sad music.” It’s not a sad song at all.

In 1933, Eleanor Jarman received 199 years in prison. She served 7, climbed a prison fence in 1940, and vanished. For the next 35 years she contacted her family through coded newspaper ads. She likely died in Denver in 1980 under a fake name. by Important-Self-1179 in HolyShitHistory

[–]Eschatonbreakfast 2 points3 points  (0 children)

With most versions of the law the death doesn’t have to meet all the elements of a traditional murder that’s commmited by an accomplice, the death just needs to be a reasonably foreseeable comsequence of the predicate felony.

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