A person who borrows $10m is richer than a person who borrows one million dollars
By scheng1
@scheng1 (24649)
Singapore
January 16, 2016 6:47am CST
The world of money is a strange world.
Many billionaires and millionaires are heavy in debt.
They do not borrow just a million dollars or ten million dollars.
Many of them borrow a few hundred million dollars, and yet they are getting richer and richer.
In the world of money, a person who borrows $10 million is richer than a person who borrows one million dollars.
Why is that so?
That is due to their asset base.
If they borrow $10 million, that means their asset is in millions too.
The bank willing lends to them because of the underlying asset.
When you have 20 apartments for rental, you are likely to borrow a few million dollars. The tenants are paying for your mortgage.
2 people like this
3 responses
@cherriefic (10399)
• Philippines
17 Jan 16
Thats true. You have to have that much in order to barrow a lot.
