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The games we've played with money have pushed valuations to a point of being nearly meaningless. There are people who own a billion dollars of stock/crypto, and

by Taek 6y ago

The games we've played with money have pushed valuations to a point of being nearly meaningless. There are people who own a billion dollars of stock/crypto, and then there are people who own multiple yachts, multiple mansions, sports teams, factories, etc. The thing that bothers me the most about paper wealth is that not all of it can be exited. The economy may say that there are 500 new billionaires, but if all 500 of them try to buy a fleet of yachts at the same time, their divestment would crash (rug pull) their entire wealth. Anyone who already owns a fleet of yachts is in a completely different category from someone who owns nominally the same value in paper.

robjan 6y ago
Thing is you don't even need to liquidate in order to get that yacht. Many are taking low interest loans collateralised against these paper assets.
globular-toast 6y ago
Exactly. At the end of the day there is only so much stuff to go around and we're pretty much at the limit of what people actually want. If a billionaire wakes up twice as rich tomorrow is he immediately going to buy a bigger mansion? Another car? Another yacht? More expensive food? Realistically he's unlikely to really want anything else. Billionaires have essentially infinite wealth. They can have whatever they want. But if one of them one day decided what they really want is a B52 bomber or an entire neighbourhood I think the limits of that wealth would become apparent. I think what we're seeing is the limits of possibility. There are more billionaires than ever because they're all essentially at the limit. People like me are rich. I own a car with leather seats and air conditioning. I have my own home cinema. What do they have that I don't? A bigger car? A better home cinema? Who cares?
- jedberg 6y ago
  > What do they have that I don't? The ability to do whatever they want whenever they want. If they want to see a live show in another country, they can get front row seats and be there. If they want to talk to the President, they can. If they want a new law that benefits their business, they can make a few calls and get that done.
- giantrobot 6y ago
  A billionaire (or a sufficiently wealthy millionaire), along with their family, has practically unlimited agency. You don't. Their wealth is also self perpetuating. A billionaire can spend 1% of their wealth hiring well compensated professionals to manage their wealth and keep it growing. Just the fact a billionaire has their wealth means they have access to influence and opportunities you will never have. Even someone with a mere hundred million in wealth only needs a 1% yearly return to have a million dollars a year. Even that paltry amount would allow them to live better than anyone you or I know.

by Taek 6y ago

robjan 6y ago

Thing is you don't even need to liquidate in order to get that yacht. Many are taking low interest loans collateralised against these paper assets.

globular-toast 6y ago

Exactly. At the end of the day there is only so much stuff to go around and we're pretty much at the limit of what people actually want. If a billionaire wakes up twice as rich tomorrow is he immediately going to buy a bigger mansion? Another car? Another yacht? More expensive food? Realistically he's unlikely to really want anything else. Billionaires have essentially infinite wealth. They can have whatever they want. But if one of them one day decided what they really want is a B52 bomber or an entire neighbourhood I think the limits of that wealth would become apparent. I think what we're seeing is the limits of possibility. There are more billionaires than ever because they're all essentially at the limit. People like me are rich. I own a car with leather seats and air conditioning. I have my own home cinema. What do they have that I don't? A bigger car? A better home cinema? Who cares?

jedberg 6y ago
> What do they have that I don't? The ability to do whatever they want whenever they want. If they want to see a live show in another country, they can get front row seats and be there. If they want to talk to the President, they can. If they want a new law that benefits their business, they can make a few calls and get that done.
giantrobot 6y ago
A billionaire (or a sufficiently wealthy millionaire), along with their family, has practically unlimited agency. You don't. Their wealth is also self perpetuating. A billionaire can spend 1% of their wealth hiring well compensated professionals to manage their wealth and keep it growing. Just the fact a billionaire has their wealth means they have access to influence and opportunities you will never have. Even someone with a mere hundred million in wealth only needs a 1% yearly return to have a million dollars a year. Even that paltry amount would allow them to live better than anyone you or I know.