If this is all Nvidia stock let him try to cash out and see what happens.
The thing that bothers me when people say “oh its unrealized gains, it’s not real money” is that they use those unrealized gains as collateral for loans of real money. They effectively ARE that rich.
It’s BS that you can borrow against it. If he did sell it the valuation would drop.
With money they loan from a bank, using whatever they bought with the previous loan as collateral.
It’s credit all the way down.
Banks don’t take this into consideration when assessing collateral?
Lol, who downvotes a question?
Take what into account? They basically look at current valuations and offer loans up to some fraction of that amount.
And that’s generally the way the ultra-rich operate, they don’t actually sell anything, they just borrow against their assets. They punt the can down the road until they die, at which point those unrealized gains get stepped up in basis for those who inherit it. If you have enough stock assets, you can service the debt with the capital gains you’re forced to realize (i.e. dividends).
So the bank sees someone with $100B in assets asking for a $10M loan or whatever, and they’re completely happy to offer that, because even if the stock gets cut in half, he can still pay the debt.
You dont need to sell your stocks to access that wealth. You can use that as collateral to take loans or exchange stocks.