Yong Social Finance

you own shares in a company worth ₦1 billion.

One day, you need ₦100 million.

Most people would think the obvious answer is simple.

Sell some of the shares.

But many wealthy people don't do that.

Instead, they borrow money.

At first, that sounds strange.

Why borrow money when you're already rich?

The answer is simpler than you might think.

Their Wealth Isn't Sitting in a Bank

When you hear that someone like Jensen Huang or Warren Buffett is worth billions of dollars, it doesn't mean they wave billions sitting in cash.

Most of their wealth comes from the shares they own in their companies or other investments.

Their money is tied to assets that can grow in value over time.

Selling Means Giving Up Ownership

Let's say you own shares worth ₦1 billion.

If you sell ₦100 million worth of those shares, you now own less of the company.

That may not seem like a big deal today.

But if the company's value doubles in the future, the shares you sold would have grown too.

By selling, you give up part of your future gains.

Borrowing Lets Them Keep Their Shares

Instead of selling, many wealthy investors use their shares as collateral for a loan.

Think of it like using a house to get a mortgage.

The bank looks at the value of the shares and agrees to lend money.

Now the investor has cash to spend while still owning all of their shares.

If those shares continue to increase in value, they still benefit from that growth.

Why Would a Bank Agree?

Banks don't hand out these loans without protection.

If the borrower cannot repay the loan, the bank can take the shares that were used as collateral.

Because the shares often belong to large, valuable companies, banks may be willing to make these loans under agreed conditions.

It's Not Free Money

Some people think wealthy investors are getting free cash.

That isn't true.

They still have to repay the loan.

They also pay interest.

If the value of their shares drops too much, the bank may ask them to provide more collateral or repay part of the loan.

There is real risk involved.

Why Not Just Sell?

For many wealthy investors, borrowing can make more sense than selling.

They keep ownership of assets they believe will continue growing.

They may avoid selling at the wrong time.

And they can access cash without giving up part of the business or investment they worked hard to build.

Can Ordinary People Do This?

In some cases, yes.

Some banks and investment firms offer loans backed by investment portfolios.

However, these loans usually require valuable assets, and they may not be suitable for everyone.

Anyone considering this type of borrowing should understand the costs and risks before making a decision.

The Bigger Lesson

The most important lesson isn't that rich people borrow money.

It's why they do it.

Many wealthy people see their investments as long-term assets.

Instead of selling them whenever they need cash, they often look for ways to keep those assets working for them while meeting their financial needs.

That's one reason wealth can continue growing over time.

Sometimes, building wealth isn't just about making more money.

It's also about making smart decisions with the assets you already own.