ObjectivityIncarnate

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Joined 2 years ago
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Cake day: March 22nd, 2024

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  • you just get loans against your static wealth at incredibly favorable interest rates.

    It’s more than that, because the wealth of those who utilize loans this way typically isn’t static. It’s not about just getting a good rate, it’s that the assets they use as collateral appreciate in value at a rate higher than inflation and the interest rate combined, so in practice, the interest rate is literally negative. The price of having access to these loans is that their net worth just grows a bit more slowly as a result.

    Of course, this only works as long as said assets continue to appreciate at that rate.