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It's important to get a good interest rate (lemmy.world)
submitted 2 years ago by [M] to c/lemmyshitpost@lemmy.world
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[–] -2 points 2 years ago* (2 children)

Actually, it’s a tax on the impatient.

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  • [–] 1 point 2 years ago (1 child)

    It’s not just impatience, for companies is usually more bet. They bet that they can earn a surplus higher than the interest rate when they invest that money now and not later.

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  • [–] 1 point 2 years ago*

    Yes but as you correctly said, it’s a bet.

    Plenty of companies fail because they take on too much debt in order to expand faster than their competition but then cannot meet the revenue goals required to pay back all that interest. We just rarely hear about them because all they get is a byline in the news while the winners are endlessly praised for their genius, which creates a distorted perception of reality where companies always succeed as a result of taking on massive debt.

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