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WalterBright 2 days ago

Wealthy people do not hoard cash, unlike what many people imagine. Their money is all invested. They also borrow money to invest.

Anyone who gets a mortgage on a house is also investing other peoples' money. Using a credit card is spending other peoples' money. Buying a car on time is spending other peoples' money.

yndoendo 2 days ago | parent [-]

Let say you are given 1 million dollars. You decided to buy a new home. Do you pay in cash or get a mortgage?

When I ask people this question most will respond with pay in cash so you don't lose money paying a mortgage. The real answer it exploit loop holes in the laws with your gain financial position.

1) Open a trust with the money. 2) Use that trust for banking and make it your mortgage lender. 3) Gain tax deductions for having a mortgage and put tax dollars in your own pocket just by shifting money around in a legal creative accounting method.

The wealthy use loop holes that can be exploited only with money to maximize the hoarding.

How does one accumulate wealth with hoarding it?

WalterBright 2 days ago | parent [-]

Loaning money out is not hoarding it. You also still paid out the money to the seller.

> The wealthy use loop holes that can be exploited only with money to maximize the hoarding.

You'll have to be more specific about that. Most deductions and credits phase out with increasing income.

yndoendo 2 days ago | parent [-]

> Loaning money out is not hoarding it. You also still paid out the money to the seller.

You do realize that the rich loan out to themselves via shell corporations or trusts. The only mobility of money is putting tax dollars into the wealth hands.

Just because a wealth person bought it does not mean someone else wouldn't.

The wealthy can also use their buying power to reduce the value of the sale and harm the seller. Kroger has around 40% market share to throw their weight around a reduce the selling power of the farmer and increase cost to the consumer. So the farmer makes less all because of threat to not buy from in a market that keeps having less and less competition.

Have you had to give free labor in millions of dollars so your company could gain access to one of the big name companies on Wall-street. I have and it just highlight the inequality in wealth at a personal and corporate level.

Even Steve Jobs used his wealth of Apple to buy up companies cheap at discounted rates. I cannot find a the video any more but it talks about how a company was being bought by Apple. Steve Jobs, at the meeting, asked the company's CEO why am I buying your company for $XXX,XXX. I think it should only cost $50,000 less. CEO said there is an agreement again. Jobs, I could just not buy it.

How about the art scam loop hole.

1) Pay an artist $1000 to create a piece via trust or another organization you own. 2) Sell the at auction and buy it for yourself for $30,000. 3) Donate the art work to charity. 4) Turn a $1000 into a $30,000 tax deductible with more creative accounting.

This is not the only artwork scam. [1]

There are loop holes that wealth people pay lawyers, accounts, full time staff to do full time as a job. Exploit the laws for personal gain to hoard wealth. [0] Panama Papers even had their methods leaked and the names of their shell companies.

Another great use of a shell company is the ability remove liability from the wealth onto a corporate entity that can easily dissolve in bankruptcy and shed the liability. Laws often are designed to ease the burden of liability from companies while keeping on individuals.

Again how do you gain wealth with out hording it? Are stocks wealth, is property wealth, are bonds wealth?

Let say you own 40% of an industry and work to gain 70%. Have you not increased your industrial hoarding by 30%? Even though it is an investment it is till hoarding.

How about stocks, can you hoard those to consolidate and hoard wealth?

[0] https://en.wikipedia.org/wiki/Panama_Papers [1] https://naturalist.gallery/blogs/journal/understanding-the-f...

WalterBright 2 days ago | parent [-]

It seems you're changing the subject. How do you buy yourself a mansion without paying for it?

> Even Steve Jobs used his wealth of Apple to buy up companies cheap at discounted rates.

Meaning there was someone willing to sell it to him.

> Exploit the laws for personal gain to hoard wealth

They're still not hoarding wealth, they're investing it.

yndoendo 2 days ago | parent [-]

Steve Jobs threaten his business by denying the ability to use their platform if he didn't sell. Even if he didn't sell there would be no business to sell being de-plaformed.

There are trillions of dollar hidden by the wealth to prevent paying taxes / their fair share.

There are no good wealthy people in the world because they hoard not share.

Investing means you must hoard. Keep owing an product or service that has a limit resource is hoarding. Want to invest in housing, one must hoard house to make a profit.

WalterBright a day ago | parent [-]

> one must hoard house to make a profit.

You must sell a house to make a profit.

yndoendo 11 hours ago | parent [-]

>You must sell a house to make a profit.

Renting and leasing economics prove your statement to be a fallacy. Airbnb wealth is built on not selling houses. Retaining bought houses increases the value because it increases the rarity. By restricting home ownership the rental properties monthly prices can be increased to reflect a manufactured market.

De Beers is a great example of how hoarding wealth grows wealth. [0] They hoard diamonds to create an artificial rarity market. This gives the ability to increase prices. Say you have a type of diamond category with 10% natural occurrence. You hoard 90% and only release 0.5% or less of that category. You just increase the rarity artificially and drove that category in price like a rocket. Even if your competition will increase prices to match or be just a few dollars below. Competition has to because they do not have access to the diamonds hoarded by De Beers.

How would you take that 90% of the hoarded 90% category diamond and make it profitable instead of just sitting on the selves? How about grinding some of the them up and selling them for diamond edge saws and bits?

My definition of _Wealthy_ encompasses individuals (you, me, human HN users) and groups of individuals (trust, companies, Apple, Meta, HN, ...).

[0] https://en.wikipedia.org/wiki/De_Beers