Quote:
Originally Posted by The Cobra
Actually, you said earlier that borrowing does not make you richer.
I can only assume that the companies that go into insolvency are just a fraction of the loans.
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If I said that I was being a smart ass and referring to that moment in time. It was stated as some sort of a maxim that owners could lever their ownership stake because “that’s how the rich get richer”. And then for some reason Musk’s Twitter acquisition was used as the example.
Yes, you can eventually get more wealthy if you borrow and your investment using borrowed money pays off. It happens some of the time. But the moment you borrow you aren’t richer. You’ve taken on debt. Hopefully you’ve acquired assets equal to that debt using the money. But it happens a lot less than people think, even for “the rich”. And the richest people, like Edwards, generally don’t take on secured debt - they issue unsecured notes etc. that’s what CNRL does.