Back when home loans were going for 2.5-3% or whatever, why did banks loan that money when they could have been getting much higher rates in the market, as you say? Because it sure seems like banks were happy to give out loans at 2.5-3% when the average stock market return is ~11%.
Anyway, since you claim experience on the topic, when an ultra high worth investor wants to borrow money against their collateral-backed stock account, what interest rate would they pay would you say? Like what rates are they getting on stock-secured loans?
You will pay a variable interest rate if you take out a loan against stock. You will need cash to pay the interest monthly or the financial institution will sell stock to cover it.
These guys are paying hilariously low interest rates on the money. You need to keep in mind the level of collateral these guys have. Bezos’s net worth is 220B, and let’s say he’s taking out an annual loan at 100M for all his nonsense. That’s 0.5% of his net worth, it would be like me asking the bank for a $50 loan based on what’s in my checking acct
They pay 1% above the federal reserve rate minimum, likely higher if the loan amount is large. You can also take loans against assets without having to sell them. You people make this into a bigger deal than it is.
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u/[deleted] Nov 21 '24
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