Name: Why All Millionaires Use Debt To Make Money
Uploaded: 2021-12-26T17:50:40.000Z
Duration: 11 min 39 s
Description: VoiceTubeの動画で発音を聞きながら英語表現を覚えよう！学べる英語：

様態の副詞

Elon Musk recently crossed a net worth of 300 billion dollars.

That's more wealth than the entire GDP of countries such as Greece, Portugal, or Finland. 

If he spends 1 million dollars a month, he would need 25K years to spend all of that

Even if he would spend 1 million dollars a day, he will need more than 821 years to spend

Imagine how your life would look like if you could spend a million dollars a day. 

Let's assume he will live for another 50 years.

He will have to spend 6 billion dollars every single year, or 16.5 million dollars every

single day for the rest of his life to be able to spend all of that money within his

  The only problem with this wealth is that. 

If he tried to turn it into real money, he might end up losing all of his fortunes.

When the CEO sells off his shares when the company is barely profitable.

That can scare off investors, and an oversupply of Tesla shares can easily drag the stock

On top of that, He will have to pay a 20 percent capital gain tax, further diminishing his

So at the end of the day, he is not as rich as he might appear on the Forbes List.

When the world's richest man wants cash, he can simply borrow money by putting up some

Elon Musk can walk into a bank and say, how about you loan me a 100 million dollars.

In case if I won't be able to pay back, I will give you the authority to sell my Tesla

Since Tesla is booming, the bank isn't taking any risk, so they will loan him as much money

Elon Musk, or any billionaire, can access their wealth that exists only on paper without

paying taxes since you don't pay taxes on debt.

In 2012, he bought his first mansion in Bel Air for 17 million dollars.

Back then, Tesla's stock price was 6 dollars.

Ideally, he should have sold 17 million dollars worth of Tesla shares to buy that mansion.

But instead, he put his shares as collateral and took a mortgage.

Since then, Tesla's stock price has grown by 17K percent while he only had to pay a

If he had sold his shares, he would have paid a 20 percent capital gain tax and would have

missed the opportunity to grow his shares by 17K percent.

Do you realize now why billionaires love debt so much?!

Pay some journalists to create a buzz around it.

Pay some experts to write about what a great piece of art it is and why it worth a 100

Go to a bank, give them your piece of art as collateral, and boom, you can borrow up

to 100 million dollars in cash at a 1 or 2 percent interest rate.

Now you can buy a mansion, a yacht, or throw a huge party.

Just make sure to make the minimum payment when your business generates some cash at

the end of the year without selling any shares and paying millions in taxes.

If you think it ends there, then you have no idea to what extend billionaires love debt.

Inflation is high, unemployment is rising, and the government is in chaos.

Britain had to devalue it's currency to survive, but it was part of the ERM or the

European Exchange Rate Mechanism, which fixed all European currencies against each other

to prevent currency fluctuations to make it easier for businesses to trade across Europe.

The demand for the British pound kept declining as Britain fell into a recession.

Hence, the bank of England had to buy billions of dollars worth of pounds to keep the pound

at the same rate as other European currencies.

While it was bad news for Brits, it was a billion-dollar opportunity for George Soros.

By looking at the numbers, he realized that sooner or later, the bank of England would

have to devalue the pound even if that meant leaving the ERM.

Soros was one step away from a gold mine.

He went to various hedge funds, borrowed billions of pounds at a very low rate, and then sold

them in the forex market in exchange for german marks.

Soros will buy those pounds cheaper and return them, pocketing the difference.

On September the 16th, the president of the Bundesbank hinted in an interview that it's

possible for some currencies to come under pressure.

That night when Europe was asleep, Soros began calling all the major banks or, in fact, any

bank to borrow as many pounds as possible.

By morning, Soros borrowed and sold over 10 billion dollars worth of pounds.

The bank of England was in absolute disarray.

The bank of England purchased 27 billion dollars worth of pounds, raised interest rates to

But it was already too late since the entire market began to sell their pounds after Soros's

Before the day ended, England left the ERM and devalued the pound, and Soros profited

Without spending a single penny out of his pocket, he borrowed billions of pounds, broke

the bank of England, and pocketed a billion dollars. 

Can you really say debt is bad after that?!

Michael burry is going through mortgage-backed securities, and he is suspicious.

So he starts digging further and further, but the more he digs, the more he is shocked.

Every mortgage-backed security is filled with multiple junk loans.

In fact, these loans are given on the basis that the borrower doesn't have a deadline

They can even skip the interest on the interest.

Which meant that even a high school dropout with no job or savings could buy a house.