Billionaire Borrowing

Ever hear the saying that the richer you are, the less you spend?  People used to throw this saying around with the rise of celebrity--celebrity with no talent. This was a new era where the more popular you were, the more you were given. Clothing, meals, trips. The Kardashian model, you could call it. And this is how it works. Often, the more wealth people accumulate, the less they spend. You see, the rules change. I heard an interesting term being thrown around on the Forbes billionaire recap for the end of 2022,“billionaire borrowing.” This is a term used to express a situation when a billionaire PLEDGES their stake in a company as leverage for a PERSONAL loan. Here's how it works:  The said Billionaire has hundreds of millions in Tesla; Elon Musk is famous for this. He doesn’t have to sell it, which means he doesn’t have to pay capital gains tax. AND he doesn’t lose his stake or potential earnings. YET, the banks will take this as security to provide a personal loan. So essentially, he is given money without having to sacrifice ANYTHING. It's a WIN WIN WIN WIN for him. Isn’t that interesting?  

There is a caveat; though. If the pledge stock drops,  there can be a “margin call,” and the lender can demand further collateral to sustain the standing loan. It is no different than the more famous a celebrity becomes, the less they spend since, suddenly, everyone is sending them the best of the best for free. This ties directly back to my concept that there is no competition at the top. The higher you make it, the easier the game gets. Period. The rules quite literally change. Equality may be the theme of the century, but it is not reality. I do not assign this a positive or negative connotation. It is simply a fact. 

The rules are different for those at the top. Sitting back and hating the game or blaming those who have figured out how to play it isn’t going to get you where you want. Instead, let the above lesson be absorb. The higher you go, the easier it gets.It’s easier to get to the top, even though it’s hard to level up there because of the people and systems that will try to hold you back on the previous level.
No Competition at the Top

The craziest thing we have been taught to believe is that it is hard to make it to the top and that it is hard to stay there. I am sure you have heard both of these sayings. Both are lies. 

Let’s reframe this and explain why neither of these statements are true. The truth is, it is easy to get to the top; it doesn't take intelligence or a great amount of resources; it simply takes proper planning, thinking strategically ahead of time, and taking one step after another until you are where you want to be. Making it to the top has little to do with HOW good someone is. It is simply that they choose to go there and take the steps until they get there. They never stopped. In my real estate- career, you would be very surprised when you met some top producers. And this is no knock or critique of them; many are just like you and me. I know that some even have super low self-confidence. They don't even know they are as good as they are. How did they get that good? By never stopping. Many masters are no different than everyone left in the herd. They simply did the work. They did their parts, and the success came as a result. By never stopping they continue to gain experience, and over time they master their craft and its tasks. However, many are not extraordinary in any way, and anyone could take their place if they were willing to put in the hard work and dedication that these individuals did. The one common denominator between all top producers I know, like, and respect? They all earned their spot. 

How Can It Be that There Is No Competition at the Top?

Let me explain how this works. I will give you an example using an influencer or how it works for myself as a content creator on the Internet. 

I am sure everyone out there who wants to start now and become a content creator at some point has the thought that it's too saturated. And yes, entry level is. But none of the other levels are.

Huh? This is where it gets cool. Think of all the influencers you know on Instagram. Okay? Basically, everyone thinks they are an influencer on Instagram. Next, think of how many of those “influencers” have both Instagram and YouTube. I bet the list just got much smaller.Maybe 1 percent? Maybe? Not even? Does 1 out of every 100 of the people on Insta you know have a YouTube channel?  Probably not. Ok, in your head think of all those people with the Instgram and the YouTube channel.  How many of them have a podcast? Maybe one? Out of all of them.

Okay. What about all of the above? Do they have courses? Do you see how, as we go up in levels in life, the competition thins out? This is true everywhere--all around us--the reason for this is that most people get trapped in the entry levels of life. They never push through, fearing they will not make it on the other side. If only they knew the other side was less work; the higher you go in levels, the less work you actually do.  It doesn't take very many levels until you are hiring other people to do your work for you, thus taking on more and then outsourcing that as you climb and climb. It is an illusion that it is difficult to make it to the top in life, and it surely is not crowded once you get there. I promise you more than 50 percent of the chairs are always empty! The higher you climb, the less you are competing against. And it doesn't work proportionately. In the beginning, you are with everyone, but after a few hard years of work, you won't see anyone around you. It's wild. Wildly worth it to commit in the beginning, then pedal as hard as you can uphill so you ride the downhill road home for the rest of your life.

The lesson here is not to envy or resent those who've successfully navigated their way through the system but to see them as sources of inspiration and learning. By understanding the mechanisms of success, including 'billionaire borrowing' and strategic asset leveraging, we can demystify the process of achieving and sustaining wealth. This insight serves as a powerful reminder that, with the right approach and mindset, the barriers to success are not insurmountable. Let's move forward with the knowledge that the ascent to the top is not about exclusion but about understanding the rules of the game and using them to our advantage.