rich people super rich are taking loans now why? what it means ?

[cryptoboss2020]

rich people around the world taking loans?
they use their properties as collateral what it can be out come for propery market? what they do with money?
do they use same method as taking loan against your crypto instead of selling a asset?
what we can expecing? the property prices will go higher?

https://www.bloomberg.com/news/articles/2020-04-09/ultra-wealthy-pull-cash-from-mansions-to-buy-beaten-down-assets

[1714607636]

1714607636

[The Sceptical Chymist]

OP, that article is 6 months old already.  Were you that desperate to start a new thread that you had to go digging through Bloomberg's archives?

Here's the answer to your question:

Enness, a mortgage broker that caters to the wealthy, said more clients are seeking loans backed by real estate to help them repay other debt, invest in businesses and snap up cheap assets in the wake of a pandemic-driven rout of global markets.

And the beaten-down assets were only temporarily beaten down at the start of the pandemic--about 6 months ago.  Perhaps if you did some closer reading and used a little more brainpower you could have figured it out yourself.

[Broly46]

It’s nothing new, real estate, real definition “royal estate”, it’s not real, it’s the estate belong to the royal family, you the property owners are just “leasing it”, although some with lenient rule free hold and lease hold, they’re both still the royal estate, although freehold are miles better than leasehold, for century real estate has been evergreen investment for richest, using property as the leverage against another property, it isn’t some straightforward business deal, but it’s way less risky than leveraging property on stock market. It means property is still a good investment.

[fiulpro]

See if we are talking about Rich people, they do have a lot of maintenance and at the same time most of the times people take EMI, now these EMI in the end are expensive to pay altogether.

Therefore I do think:

Loans of property
EMI
Loans of cars
Credit card payments
Etc

All these things take a lot of toll our of a person during pandemic, even if he is rich.

How try and imagine the same for the people who are poor or middle class.?? They did get hit the hardest during this pandemic and I believe government cannot help each and everyone so we have to work hard and keep social distancing while respecting the things we must do during the pandemic.

We cannot go to work, but we can work online. Things like that would save us. We need to adapt.

[NeuroticFish]

rich people around the world taking loans?
they use their properties as collateral what it can be out come for propery market? what they do with money?
do they use same method as taking loan against your crypto instead of selling a asset?

Rich people have always loaned money. And the article, although old, tells from the start what they do with the money: buy cheap all the assets that have short-term problems and good chance to rise in the future.
Since they do have plenty of money, even if it's locked into another valuable assets, getting loans is an easy way to get liquidity.
Nothing new under the sun.

Since the article is from April (!) I really don't know what's the reason for this topic... an attempt to scare the newbies?

[cryptomaniac_xxx]

rich people around the world taking loans?
they use their properties as collateral what it can be out come for propery market? what they do with money?
do they use same method as taking loan against your crypto instead of selling a asset?

Rich people have always loaned money. And the article, although old, tells from the start what they do with the money: buy cheap all the assets that have short-term problems and good chance to rise in the future.
Since they do have plenty of money, even if it's locked into another valuable assets, getting loans is an easy way to get liquidity.
Nothing new under the sun.

Since the article is from April (!) I really don't know what's the reason for this topic... an attempt to scare the newbies?

Or to show how it is made? But this kind of strategy doesn't cater for everyone obviously. So I wouldn't go that route, or maybe I will make a loan but I know that I can fully pay it off. Those rich has a lot of leverage with their assets as collateral. And then buying cheap and selling in the future take the profits paid the loan and they still have some in their pocket, perfect strategy for them.

[NeuroticFish]

Since the article is from April (!) I really don't know what's the reason for this topic... an attempt to scare the newbies?

Or to show how it is made? But this kind of strategy doesn't cater for everyone obviously. So I wouldn't go that route, or maybe I will make a loan but I know that I can fully pay it off. Those rich has a lot of leverage with their assets as collateral. And then buying cheap and selling in the future take the profits paid the loan and they still have some in their pocket, perfect strategy for them.

The rich people do afford to lose most of the assets they've used as collateral and they'll still be rich.
Normal people should not use loaned money for any kind of investments.

Indeed, that's not the path to follow. So not much use to "show how it is made" imho...

[Harlot]

rich people around the world taking loans?

This is not something new in fact if you look at any annual reports found in the internet and just search under the liabilities keywords such as accounts payable and notes payable you will see that most if not all companies have them. I know they can afford to use all their money for their expenses but taking out loans is the most ideal way to make the most our of your budget as cash is always king. Having the luxury to spread out the payment for your expense for several years will make the businesses have more room for expansion and their other businesses plans. So loans are something that you don't need to worry about since companies won't even be able to have them if they also have bad credit as well.

[Jet Cash]

>..<

The British Crown is the ultimate owner of all of the land in Canada, Australia, the UK and a load of other countries. This makes the English Queen the ultimate owner of more land than any other dynasty in the world.

The super rich borrow money at negative interest rates, and use it to buy hard assets. They then wait for the collapse of their fiat currencies to clear their loans ( if they feel like it ).

[sunsilk]

rich people around the world taking loans?
they use their properties as collateral what it can be out come for propery market? what they do with money?
do they use same method as taking loan against your crypto instead of selling a asset?
what we can expecing? the property prices will go higher?

They take loans as the interest are cheaper this time and it's the strategy of the governments to make their economies alive again. They can't just do nothing while watching the economy go down.

And as for those rich people, they see this as an opportunity. Although they have the resources, they are wise enough to use others money to generate profit from them and from that profit, they'll just pay the loan with the interest.

Somehow, if the economy is going alive again expect that properties value will increase.

[mersal]

See if we are talking about Rich people, they do have a lot of maintenance and at the same time most of the times people take EMI, now these EMI in the end are expensive to pay altogether.

Therefore I do think:

Loans of property
EMI
Loans of cars
Credit card payments
Etc

All these things take a lot of toll our of a person during pandemic, even if he is rich.

How try and imagine the same for the people who are poor or middle class.?? They did get hit the hardest during this pandemic and I believe government cannot help each and everyone so we have to work hard and keep social distancing while respecting the things we must do during the pandemic.

We cannot go to work, but we can work online. Things like that would save us. We need to adapt.

We are talking about the rich people right so they are not really going to suffer a lot for automobile ad credit card EMIs, it is only burden for middle class people bur rich people too suffer due to the pandemic like decrease in their profit making from business or investment.But why they take loans instead of selling the asset is a real strategy because they are going to make money from the loan money not going to spend them on useless things.

[Broly46]

>..<

The British Crown is the ultimate owner of all of the land in Canada, Australia, the UK and a load of other countries. This makes the English Queen the ultimate owner of more land than any other dynasty in the world.

The super rich borrow money at negative interest rates, and use it to buy hard assets. They then wait for the collapse of their fiat currencies to clear their loans ( if they feel like it ).

This a interesting time we alive many investment simply don’t make money, smart money are running out of option to invest, the “smart money” here depict the high net worth individual such as WB, this smart money do not like bitcoins, WB openly express dislike on bitcoin, all his followers would do the same too, Bill Gates dislike bitcoins too, but WB calling real estate is the best performing asset for him, I think all his followers too would do the same, I think nobody with high net worth is investing any money into liquid market, many turn into hedge fund, hedge fund isn’t investing money into liquid market, the market is entirely running on bailout money, who is to blame for this mess? Real estate isn’t the risk free investment, but it’s highly illiquid and it’s difficult to know the real value from time to time, I think it’s also the reason why it’s a good investment, very illiquid very difficult to know the value but it’s open to bid the price for the real estate.

The odd thing happen that bank constantly offering money to bailout property owners, refinance on top of another refinance on top of another refinance, there is no end to it, that’s what attract the super rich, they can get bailout by investing into real estate, for the people without property they have a lot to loss since having a property is a necessity, they couldn’t enjoy the benefit of bailout offered.

[Taskford]

rich people around the world taking loans?
they use their properties as collateral what it can be out come for propery market? what they do with money?
do they use same method as taking loan against your crypto instead of selling a asset?
what we can expecing? the property prices will go higher?

https://www.bloomberg.com/news/articles/2020-04-09/ultra-wealthy-pull-cash-from-mansions-to-buy-beaten-down-assets

Rich people have big debts but those are good debts and mostly they take a loan to expand their business, If you think they are broke then they are not since that's how they gain capital without taking some on their pockets.

Provably you didn't done this yet and some other people really take it as bad actions made since some other think about the borrower is dumb or broke for asking some loan in the bank.

[bitbollo]

Most of people have not enough liquid asset (FIAT) to start a business, the best way is get a loan using property already own.
Having a big amount of FIAT on a bank account is worthless and can bring just expenses. For sure in a very rare cases they produce just small earnings.
Receive a loan isn't always a negative stuff, because it also work as a medium for speed up a business, and not just a negative asset to have on portfolio.

[Kasabus]

Most of people have not enough liquid asset (FIAT) to start a business, the best way is get a loan using property already own.
Having a big amount of FIAT on a bank account is worthless and can bring just expenses. For sure in a very rare cases they produce just small earnings.
Receive a loan isn't always a negative stuff, because it also work as a medium for speed up a business, and not just a negative asset to have on portfolio.

Yes. Taking loans nowadays are just very common even how rich you are. Rich people do not take loans because they don't have enough funds to sustain their necessities, but because they want to double their investments in a way that they can produce more profits too compared to a single investment. Taking loans could be a great idea to increase your assets and speed up its progress.

[BrewMaster]

Since the article is from April (!) I really don't know what's the reason for this topic... an attempt to scare the newbies?

Or to show how it is made? But this kind of strategy doesn't cater for everyone obviously. So I wouldn't go that route, or maybe I will make a loan but I know that I can fully pay it off. Those rich has a lot of leverage with their assets as collateral. And then buying cheap and selling in the future take the profits paid the loan and they still have some in their pocket, perfect strategy for them.

The rich people do afford to lose most of the assets they've used as collateral and they'll still be rich.
Normal people should not use loaned money for any kind of investments.

Indeed, that's not the path to follow. So not much use to "show how it is made" imho...

many of the rich people got rich by taking these kinds of high risk moves. but they do it with some experience and the know how of the internals of the markets they are doing it it.
in the end fiat will always dump because of its inflationary nature and there is no escaping that. so if they could get more money even through loaning and invest it in assets that can not lose their value they can make a ton of money. of course again being in the inner circle helps them a lot.

[jaysabi]

rich people around the world taking loans?
they use their properties as collateral what it can be out come for propery market? what they do with money?
do they use same method as taking loan against your crypto instead of selling a asset?
what we can expecing? the property prices will go higher?

They take loans as the interest are cheaper this time and it's the strategy of the governments to make their economies alive again. They can't just do nothing while watching the economy go down.

And as for those rich people, they see this as an opportunity. Although they have the resources, they are wise enough to use others money to generate profit from them and from that profit, they'll just pay the loan with the interest.

Somehow, if the economy is going alive again expect that properties value will increase.

This is why you save.  Success is where opportunity and preparedness meet.  The opportunity in this case was people panic selling assets to raise liquidity, mostly because they were recklessly overleveraged. The preparedness is having already saved to be able to take advantage of other people being forced out of the market instead of selling because they wanted to.  But the rich aren't using other people's money, they're using their own.  Leveraging your assets to borrow is still using your money.  If the enterprise goes south, you lose the asset supporting the loan.

[carter34]

rich people around the world taking loans?
they use their properties as collateral what it can be out come for propery market? what they do with money?
do they use same method as taking loan against your crypto instead of selling a asset?
what we can expecing? the property prices will go higher?

If taking properly to use for collateral to buy cryptocurrency means it is more useful to the buyer than the property. Recently people are seeing cryptocurrency as an asset especially bitcoin. They prefer hodling Bitcoin as a better risk.

[GeorgeJohn]

Rich people taking loans does not mean it's avenues for them to be poor, the possibility for rich person to loan,meaning that the rich has a rich mentality in order to add to his wealth because the loan is for investment when situations is not in statics equilibrium or life is not balanced to him or her.

[shield132]

Do you know that one of the major companies and leaders in a lot of industries carry a lot of debt? Insane amount of debts despite the fact that these companies are gamechangers.
Also I suggest you to check this article 5 Successful Companies That Didn't Make a Dollar for 5 Years[/rul]. In the list there are companies like Amazon, FedEx, Tesla and others.
So, yeah, rich people take loans when their money supply isn't enough for them to start a business or a thing that they want and requires much more resources. Also, when someone is rich, it doesn't automatically means that he/she owns supply of money, no, this can be assets and stocks that they don't want to sell too.