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Ask HN: Is there a list of richest based on liquid assets not stock wealth?

50 points by hbarka 4y ago

Cash-poor stock-rich is the current measure, how about liquid cash rich mostly, is there such a list and who would be on it?

hayst4ck 4y ago
Inflation is a tax on idle money. Inflation is generally around 3%, so it costs 3% of your money for it to be "liquid" (idle). This means most people aren't going to keep around liquid cash. Additionally (I am a layman, but this is my understanding), to get around taxes, rich people take out loans using their assets as collateral. This means the rich probably have very little liquid cash, but incredibly large lines of credit. In regards to spending, what's the difference between cash in hand and credit? So from my probably poorly informed position, this question doesn't make very much sense.
- julienreszka 4y ago
  Even if what you say is true it is probably still interesting to know how much liquidity people keep around at most
  - quickthrower2 4y ago
    It will probably be spikey. Someone gets loads of cash from selling X and before buying Y. Probably people getting out of crypto at the top would be on such a list for a week or two.
  - joshxyz 4y ago
    questions for plato and pablo escobar (at his prime)
- imtringued 4y ago
  The rich keep 10% of their portfolios liquid to react quickly during "fire sales" like right now when house prices fall. The rich have very little cash as a percentage of net worth, they still have higher absolute levels than the not rich. I don't know why this internet meme is so popular. If all the rich people don't have money than who are the people with money if they aren't rich? Did we somehow manage to wealth equality with money? By cash I also include cash equivalents like treasuries with very short durations. Also, as counterproductive as it might sound, banks give more loans to those who already have money, so if you assume that the rich have enormous lines of credit it is precisely because they have liquid cash in case their debt based investments perform less than than they hoped. What you are right about is that central banks want people to use cash as a medium of exchange so 3% inflation is basically a "circulation safeguard". The problem with this inflation is that it only exists because you cannot charge a 3% fee on cash directly. If you could do that then 0% inflation would be optimal.
  - Jabbles 4y ago
    > like right now when house prices fall Please specify which market you're talking about.
    - deleted 4y ago
      [deleted]
    - lostmsu 4y ago
      Anecdotally, there's a 20%+ drop from the highs of last winter in the Greater Seattle Area.
  - nl 4y ago
    > The rich keep 10% of their portfolios liquid While it's true most rich do keep a proportion of their portfolio in liquid assets, this doesn't imply cash: > Cash equivalents are typically investments that have short-term maturities of less than 90 days and are considered liquid assets because they can be readily converted to cash. > Stocks and marketable securities > U.S. Treasuries and bonds > Mutual funds > Money-market funds https://www.investopedia.com/ask/answers/032715/what-items-are-considered-liquid-assets.asp https://www.investopedia.com/ask/answers/032715/what-items-a...
  - whimsicalism 4y ago
    > somehow manage to wealth equality with money Certainly the gini coefficient of actual cash is lower than what it is if you take into account other assets.
  - deleted 4y ago
    [deleted]
  - hayst4ck 4y ago
    > The problem with this inflation is that it only exists because you cannot charge a 3% fee on cash directly. If you could do that then 0% inflation would be optimal. My understanding is that because the US Dollar is the reserve currency of the world we can devalue it via inflation to effectively take value from other countries by reducing the value of what they hold as well as reducing the "cost" of our debt. Since trades are conducted in dollars, dollars will still be purchased, even though they are a "poorly performing" asset? So we can effectively fund the war in Ukraine directly with inflation. A tax was levied in the form of inflation, it was tolerated because it's not a "tax," and that tax is an extremely regressive tax on liquid cash. Inflation has effectively made labor cheaper too, making it even more regressive. I guess what I'm asking is, why is 0 optimal? Isn't it more of a choice with consequences? Isn't optimal inflation probably not 0 if we are the reserve currency? (I'm definitely throwing around some ideas I barely have a grasp of).
- JohnJamesRambo 4y ago
  It makes sense to me because Elon or Bezos couldn’t cash out a fraction of their stock without crashing it. I’d be interested in who is truly wealthy and liquid and diversified.
  - whimsicalism 4y ago
    Wealthy and diversified is different from holding a bunch of cash.
    - JohnJamesRambo 4y ago
      This is true but holding cash while this happens isn’t great either. https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL I guess I’m looking for who is exceeding inflation and still making gains while not exposed to being decimated by a stock crash and definitely not almost all their net worth tied to one stock of a business they own.
      - whimsicalism 4y ago
        Add a chart with monetary velocity next.
  - z3t4 4y ago
    I guess the most wealthy man is the one who can get the biggest loan? The stock market however is an inflated balloon, if you just look at revenue the stock is mostly air/speculation.
  - lupire 4y ago
    It's a good thing to wonder about, but it's like asking the exact position of an electron at a given time. There will never be a single numerical answer.
  - thrill 4y ago
    Sure they could cash out without going through the public market. It's "easy enough" to arrange sales of large numbers of shares in private transactions. For Musk levels of money there's have to be more than a few such arrangements. Depending on the buyer's desire for that stock, it can even be profitable, as they similarly couldn't publicly buy such a large quantity without wild market swings.
- JoshTriplett 4y ago
  In particular, even if you don't have stock in your own company, you'd still likely want to invest most of your assets. I would guess that a list of people holding large quantities of cash would, roughly speaking, contain two groups: people who don't manage their wealth very well, and currency traders/speculators who are holding cash itself as an asset.
- NewEntryHN 4y ago
  Doesn't Warren Buffett have like $60 billions in cash?
  - known 4y ago
  - em500 4y ago
    Who knows? Seriously, think about this for a moment. Who could have such information, and why would they divulge it?
    - kwhitefoot 4y ago
      The bank, the government, the tax authorities. In this country, Norway, the last of those does indeed divulge it because anyone can access anyone else's tax return.
      - em500 4y ago
        1. Even if he'd be mad enough to put 60B in one bank(-account), it's strictly forbidden for anyone who could access such information to divulge it. In reality, people who need to hold very large sums of liquidity (which is a very rare requirement if you really think about it) use short term treasuries and/or the money market. 2. What's the relevance of Norways idiosyncratic laws in this discussion? In almost every other country in the world (including the most of Europe) the government / tax authorities consider such information strictly private.
        kwhitefoot 4y ago
        The relevance is making people aware that secrecy is a choice not a natural law. And while it is not common it is not only Norway that does this, it's a Nordic thing, with the exception of Denmark (which has had tax scandals that would have been found out sooner had the records been public!).
  - lupire 4y ago
- instagraham 4y ago
  It's still more complicated than this though, isn't it. Our inflation numbers are essentially polled perceptions of how much average prices rise. Depending on your lifestyle and what you spend on, you may not necessarily spend as much more per month as inflation percentages suggest. A family living cheque to cheque will feel the burn a lot more since the majority of their purchases go to groceries and things that do go up with inflation. But a billionaire whose cash expense is marginal compared to their worth probably wouldn't notice - or have cause to care. For example, if your liquid cash is going to pay things that are not rising in price, but your other cash is in a savings account earning interest, wouldn't you be relatively less affected by inflation?
- voisin 4y ago
  > Inflation is a tax on idle money. Inflation is generally around 3%, so it costs 3% of your money for it to be "liquid" (idle). I hear this all the time. Inflation measured by CPI is not a tax on the cash held by the rich. The basket measured by CPI is a rounding error to that level of wealth. If you held even $1 million in cash, you need to look at the things you buy with that cash as investments and compare how those values have been changing. For example, if you were a tech investor, you’ve seen far greater than CPI level inflation in the assets you buy over the last 5 years, so holding as cash wasn’t very smart. But if you blindly dumped cash into tech this year to avoid “inflation tax” then you missed out on massive deflation in the asset you buy. Zooming out to the wealthy, consider commodities, real estate, bonds, stocks, etc. most asset classes have crashed, so holding cash isn’t necessarily a bad idea (at least, it certainly isn’t a bad idea because “inflation is running hot”).
  - benj111 4y ago
    Over time stocks tend to beat inflation. Looking at one small window of time is just wrong. Plus if you just look at liquid assets you miss how these people actually made their money. Plus if you look at the long term 3% compound inflation is seriously corrosive. That's over 30% of your wealth gone in 10 years. How long before things like food and bills become serious concerns?
    - voisin 4y ago
      > Over time stocks tend to beat inflation. Looking at one small window of time is just wrong. It is wrong only if someone is sitting in cash for long periods of time. A poor person needing to buy groceries every week is seriously affected by CPI inflation. A rich person holding onto significant cash because they view asset prices to decline is actually experiencing deflation in the thing they want to buy and CPI for that person is utterly irrelevant. The long term return of stocks is irrelevant to this discussion. > Plus if you just look at liquid assets you miss how these people actually made their money. Not sure what you are getting at here, but it is beside the point I am making that CPI is not relevant to the wealthy holding cash. > Plus if you look at the long term 3% compound inflation is seriously corrosive. That's over 30% of your wealth gone in 10 years. How long before things like food and bills become serious concerns? Again, this isn’t something that affects the wealthy. If a wealthy person wanted to buy META a year ago, the price has declined 70% since then, so the asset you wanted to buy has experienced deflation giving you a better entry point, regardless of CPI inflation. Replace META with almost any other asset and the same statement is true over the last year or so.
- moralestapia 4y ago
  Huh? Is this stack overflow? OP asked a very specific thing, not for this (very) amateurish lesson on "rich people and taxes".
boeingUH60 4y ago
I don't think so. I don't even think it's possible to estimate someone's liquid assets except the person gives you a hint...maybe ProPublica's leaked tax files trove [1] can do the job, but they removed any identifying information on anyone who wasn't a public figure, presumably to avoid lawsuits. 1- https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax https://www.propublica.org/article/the-secret-irs-files-trov...
tomp 4y ago
Stocks are amongst the most liquid assets, only topped by bonds. But many rich people are rich in private companies, apartments/houses, and boats, which are all much less liquid.
- conformist 4y ago
  Yeah, exactly. Perhaps the OP meant unlisted shares or something like that?
  - mypastself 4y ago
    Liquidity is indeed a spectrum, but I assume the OP means “cash”: physical currency, bank deposits etc.
    - lupire 4y ago
      That "etc" is extremely load bearing as it pertains to the OP question and not a technical detail of financial engineering.
jzellis 4y ago
Yes, since you ask: https://www.interpol.int/en/How-we-work/Notices/View-Red-Notices https://www.interpol.int/en/How-we-work/Notices/View-Red-Not...
joshxyz 4y ago
that's a tough metric if you meant liquid as in cash on hand that is not actively making them money, just why would they disclose that. there are also forms of assets that are actively making them money yet easy to access and reallocate (say at x% loss depending on how urgent you need it).
bell-cot 4y ago
In general, there are far more disclosure and public record laws around stock ownership than around cash-like assets. (And the folks assembling "X Richest People" lists still have to do quite a bit of digging & guessing.) Also - "liquid cash" is a vague term. Depending on the situation, accountants put a wide variety of not-literally-cash assets into the "cash & liquid assets" category. Even if you could get all the data - who was where on a "X Liquid Cash Richest" list would be extremely sensitive to both (1) the exact date of your list and to (2) the exact definition used in the accounting.
rawoke083600 4y ago
ahhh ! I too want a list of viable "stick-up" targets :) Too many a times ive got "sure, i can get you the money in 3 to 5 days" excuse in my career as the 'HandsomeBandit' /s
ksec 4y ago
I dont understand what makes Stock not liquid? Unless you want to sell it all, you can borrow against your stock for cash. If you want "Cash" only. I believe that point of owning cash is privacy and not having to disclose them.
- popol12 4y ago
  That's very limited If you're Jeff Bezos there's no bank that is going to lend you 100B$ against your stock, because: 1. they don't have this money available themselves 2. there's less than 100B$ liquidity to dump these stocks on the market if they go down in value and Jeff's assets have to be liquidated, so the bank will limit the amount of money it will lend
  - eastern 4y ago
    The liquidity of anyone's stock holding depends entirely on how much one holds compared to how much is routinely traded on the markets. If I own 0.01 percent of any heavily-traded stock, it's 100% liquid. I can sell it whenever I want at a moment's notice. In any such accounting it will be added to my liquid wealth. But if I own 25% of the same stock, it's illiquid. If I also run the company, then it's worse because any attempt to sell a large part of my holding will itself trigger a crash in the price.
  - pastacacioepepe 4y ago
    Poor Bezos, one of the richest man in the world, yet has no cash at hand. I've heard stories of him having to ask money to the passerby to afford lunch. So sad to be the richest man but to actually own nothing. Hey poors, take example from Jeff! He's not liquid at all, like all of you, but he's always so happy!
    - GaylordTuring 4y ago
      Who said anything about that you should feel sorry for Jeff Bezos? The parent commentator simply described the circumstances regarding what Jeff Bezos can get. Who are you arguing against?
nl 4y ago
"Liquid" is a spectrum, not an absolute. Stockholdings of highly capitalized, highly traded stocks on major stock exchanges (NYSE, Nasdaq, FTSE, a few others) are one of the more liquid assets there are. If you are a multi-billionare it's reasonable to think you can convert maybe $500M - $1B of stock holdings to cash and have it in your bank accounts in 24 hours. See https://www.investopedia.com/ask/answers/032715/what-items-are-considered-liquid-assets.asp https://www.investopedia.com/ask/answers/032715/what-items-a... > Cash equivalents are typically investments that have short-term maturities of less than 90 days and are considered liquid assets because they can be readily converted to cash.
- zokier 4y ago
  Exactly, holding $1B of TSLA vs S&P500 have very different degrees of liquidity I imagine. So an interesting metric would have all the assets categorized and multiplied by some sort of liquidity factor. Of course in practice that is pretty much impossible to actually accomplish.
  - cypress66 4y ago
    I don't think they would be that different. Dumping 1B of TSLA isn't too hard probably. But with other smaller stocks sure.
  - nl 4y ago
    Part of the selection criteria for inclusion in the S&P500 is "Minimum monthly trading volume of 250,000 shares in each of the six months leading up to the evaluation date" If you tried to move $1B in shares in the smallest company in the S&P500 then yes you will move the market for sure. But if you have $1B invested across the S&P500 then it will barely be noticed. > So an interesting metric would have all the assets categorized and multiplied by some sort of liquidity factor. Of course in practice that is pretty much impossible to actually accomplish. Not at all. Average trading volume times price is almost exactly that.
    - zokier 4y ago
      > Not at all. Average trading volume times price is almost exactly that. For stocks, yes. But there are plenty of other modes of wealth too which can be much harder to estimate. Like for example what is the liquidity of Bezos' half billion dollar yacht or Putins billion dollar palace?
zie 4y ago
No such list that I'm aware of and the US govt would be at the top of the list ;) Because of inflation and FDIC protection limits, most people don't carry around excess cash. It costs money to hold cash. Fidelity will let you hold up to 1.25M before getting past FDIC protections. Many don't like their cash to go beyond FDIC protections, so 1M or so cash is around the upper limit people would regularly want to hold.
conaire 4y ago
I think easily liquifiable assets in general would be a better measure. Bill Gates would be somewhere near the top, he could sell most of his diversified ~100b stock portfolio without causing much of a stir.
- simne 4y ago
  Nope. He would pay HUUGE taxes if do this.
rco8786 4y ago
If there is such a list - there will be a bunch of people you've never heard of on it and certainly would not want to emulate. People don't hold their wealth in cash because it is constantly depreciating by design.
nicopappl 4y ago
After a certain level of wealth, most assets are financial and liquid cash becomes a vanishingly small part of total wealth. I've absolutely 0 info on cash distribution across the richest people, but this figure shows average asset across all people (in France). It still can be helpful as a way to "visualize" asset type property distribution across the spectrum. http://piketty.pse.ens.fr/files/ideology/pdf/F11.17.pdf http://piketty.pse.ens.fr/files/ideology/pdf/F11.17.pdf
halfsquatch 4y ago
Why do you ask? Are you looking to pull a job? ...can I get in on it?
bryanlarsen 4y ago
$100 in paper cash is more liquid and easier to spend than $100 in stocks. $10M in paper cash is far less liquid and harder to spend than $10M in public stocks.
jtthe13 4y ago
If you are rich with most of your assets in liquid form, you're not richin' right. The whole point is to keep as little liquid assets as possible and invest in a diverse portfolio of longer-term, return-yielding investments. You'll want short-term liquidity for upcoming payables, and long-term solvency to justify leveraging as much as possible of your investments through borrowing.
concomitant 4y ago
Such a list would include hedge fund managers, such as Ken Griffin, Steve Cohen or Jim Simons.
johnea 4y ago
Lists of richest almost never include the _actual_ richest people, since they usually exclude royalty and organized crime bosses...
incomingpain 4y ago
Anyone wealthy enough will know not to have any actual currency. It's an extremely rare thing for someone to have realized gains and be holding liquid. Once you know this reality, when folks like AOC want to ban 'billionaires' what they are actually saying is they want to go after unrealized stocks. Which isn't just stock market, it can be fine art, cars, whatever. Their goal is to seize private property to fund their spending. Many countries have tried this, all of them collapsed.
simonblack 4y ago
Cash-poor stock-rich is the current measure, .. More accurately, that should be 'Cash-poor, asset-rich'. Assets are not just stocks, but also real-estate, precious metals*, commodities such as copper, wheat, etc. *Gold as normally looked on as a 'store of wealth', not an 'investment'. It has been traditionally looked at in the same way as a permanent form of cash, rather than as a commodity like copper, or iron, or other metals. Spare cash lying around is 'lazy money'. While it's good to have some cash on hand, it's poor investing to keep a lot of cash lying around. How much cash you have on hand is a function of your wealth-level. Some of us can get a bit twitchy if the cash(plus gold) levels should go down under a couple of hundred thousand or so. Your assets should be out there working, and bringing in more money. Stocks are only one form of asset. And most people use them wrongly. Many people people chase the share-price without bothering about the company's fundamentals which is where real investing is involved. 'Trading' is merely another form of gambling. You do 'trading' for fun, not for investment, and you should be willing to lose all of that money if it be. A good rule-of-thumb for an asset is that you have to be able to hold it in your hot little hand or at least touch it. Anything else is just numbers in somebody's computer and that can be taken away from you in the blink of an eye. (Or even when the power goes off.) Oh, and there's nothing 'safe' about a Bank's Safety Deposit Box. If they hold it in their Bank, it's theirs, not yours. One last thing. Get rid of the debt. Pay off your mortgages as soon as possible, within months rather than years. Keep your Credit Cards in a positive balance rather than in debt, so pay them off entirely at the end of the month or even more often. I consider it a failure on my part if they get into debt at all. Online banking is your friend.
simne 4y ago
Check credit ratings: Moody's, S&P Global, and Fitch Ratings. They check all participants, for what amount of cache they have. AAA+ rating only possible for subject, who have 100% coverage of all credits bodies by cache. Unfortunately, from NASDAQ, only Microsoft have AAA+ rating. Other companies have coverage only for year or more of percents, none cover body.

50 points by hbarka 4y ago

Cash-poor stock-rich is the current measure, how about liquid cash rich mostly, is there such a list and who would be on it?

hayst4ck 4y ago

Inflation is a tax on idle money. Inflation is generally around 3%, so it costs 3% of your money for it to be "liquid" (idle). This means most people aren't going to keep around liquid cash. Additionally (I am a layman, but this is my understanding), to get around taxes, rich people take out loans using their assets as collateral. This means the rich probably have very little liquid cash, but incredibly large lines of credit. In regards to spending, what's the difference between cash in hand and credit? So from my probably poorly informed position, this question doesn't make very much sense.

julienreszka 4y ago
Even if what you say is true it is probably still interesting to know how much liquidity people keep around at most
- quickthrower2 4y ago
  It will probably be spikey. Someone gets loads of cash from selling X and before buying Y. Probably people getting out of crypto at the top would be on such a list for a week or two.
- joshxyz 4y ago
  questions for plato and pablo escobar (at his prime)
imtringued 4y ago
The rich keep 10% of their portfolios liquid to react quickly during "fire sales" like right now when house prices fall. The rich have very little cash as a percentage of net worth, they still have higher absolute levels than the not rich. I don't know why this internet meme is so popular. If all the rich people don't have money than who are the people with money if they aren't rich? Did we somehow manage to wealth equality with money? By cash I also include cash equivalents like treasuries with very short durations. Also, as counterproductive as it might sound, banks give more loans to those who already have money, so if you assume that the rich have enormous lines of credit it is precisely because they have liquid cash in case their debt based investments perform less than than they hoped. What you are right about is that central banks want people to use cash as a medium of exchange so 3% inflation is basically a "circulation safeguard". The problem with this inflation is that it only exists because you cannot charge a 3% fee on cash directly. If you could do that then 0% inflation would be optimal.
- Jabbles 4y ago
  > like right now when house prices fall Please specify which market you're talking about.
  - deleted 4y ago
    [deleted]
  - lostmsu 4y ago
    Anecdotally, there's a 20%+ drop from the highs of last winter in the Greater Seattle Area.
- nl 4y ago
  > The rich keep 10% of their portfolios liquid While it's true most rich do keep a proportion of their portfolio in liquid assets, this doesn't imply cash: > Cash equivalents are typically investments that have short-term maturities of less than 90 days and are considered liquid assets because they can be readily converted to cash. > Stocks and marketable securities > U.S. Treasuries and bonds > Mutual funds > Money-market funds https://www.investopedia.com/ask/answers/032715/what-items-are-considered-liquid-assets.asp https://www.investopedia.com/ask/answers/032715/what-items-a...
- whimsicalism 4y ago
  > somehow manage to wealth equality with money Certainly the gini coefficient of actual cash is lower than what it is if you take into account other assets.
- deleted 4y ago
  [deleted]
- hayst4ck 4y ago
  > The problem with this inflation is that it only exists because you cannot charge a 3% fee on cash directly. If you could do that then 0% inflation would be optimal. My understanding is that because the US Dollar is the reserve currency of the world we can devalue it via inflation to effectively take value from other countries by reducing the value of what they hold as well as reducing the "cost" of our debt. Since trades are conducted in dollars, dollars will still be purchased, even though they are a "poorly performing" asset? So we can effectively fund the war in Ukraine directly with inflation. A tax was levied in the form of inflation, it was tolerated because it's not a "tax," and that tax is an extremely regressive tax on liquid cash. Inflation has effectively made labor cheaper too, making it even more regressive. I guess what I'm asking is, why is 0 optimal? Isn't it more of a choice with consequences? Isn't optimal inflation probably not 0 if we are the reserve currency? (I'm definitely throwing around some ideas I barely have a grasp of).
JohnJamesRambo 4y ago
It makes sense to me because Elon or Bezos couldn’t cash out a fraction of their stock without crashing it. I’d be interested in who is truly wealthy and liquid and diversified.
- whimsicalism 4y ago
  Wealthy and diversified is different from holding a bunch of cash.
  - JohnJamesRambo 4y ago
    This is true but holding cash while this happens isn’t great either. https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL I guess I’m looking for who is exceeding inflation and still making gains while not exposed to being decimated by a stock crash and definitely not almost all their net worth tied to one stock of a business they own.
    - whimsicalism 4y ago
      Add a chart with monetary velocity next.
- z3t4 4y ago
  I guess the most wealthy man is the one who can get the biggest loan? The stock market however is an inflated balloon, if you just look at revenue the stock is mostly air/speculation.
- lupire 4y ago
  It's a good thing to wonder about, but it's like asking the exact position of an electron at a given time. There will never be a single numerical answer.
- thrill 4y ago
  Sure they could cash out without going through the public market. It's "easy enough" to arrange sales of large numbers of shares in private transactions. For Musk levels of money there's have to be more than a few such arrangements. Depending on the buyer's desire for that stock, it can even be profitable, as they similarly couldn't publicly buy such a large quantity without wild market swings.
JoshTriplett 4y ago
In particular, even if you don't have stock in your own company, you'd still likely want to invest most of your assets. I would guess that a list of people holding large quantities of cash would, roughly speaking, contain two groups: people who don't manage their wealth very well, and currency traders/speculators who are holding cash itself as an asset.
NewEntryHN 4y ago
Doesn't Warren Buffett have like $60 billions in cash?
- known 4y ago
- em500 4y ago
  Who knows? Seriously, think about this for a moment. Who could have such information, and why would they divulge it?
  - kwhitefoot 4y ago
    The bank, the government, the tax authorities. In this country, Norway, the last of those does indeed divulge it because anyone can access anyone else's tax return.
    - em500 4y ago
      1. Even if he'd be mad enough to put 60B in one bank(-account), it's strictly forbidden for anyone who could access such information to divulge it. In reality, people who need to hold very large sums of liquidity (which is a very rare requirement if you really think about it) use short term treasuries and/or the money market. 2. What's the relevance of Norways idiosyncratic laws in this discussion? In almost every other country in the world (including the most of Europe) the government / tax authorities consider such information strictly private.
      - kwhitefoot 4y ago
        The relevance is making people aware that secrecy is a choice not a natural law. And while it is not common it is not only Norway that does this, it's a Nordic thing, with the exception of Denmark (which has had tax scandals that would have been found out sooner had the records been public!).
- lupire 4y ago
instagraham 4y ago
It's still more complicated than this though, isn't it. Our inflation numbers are essentially polled perceptions of how much average prices rise. Depending on your lifestyle and what you spend on, you may not necessarily spend as much more per month as inflation percentages suggest. A family living cheque to cheque will feel the burn a lot more since the majority of their purchases go to groceries and things that do go up with inflation. But a billionaire whose cash expense is marginal compared to their worth probably wouldn't notice - or have cause to care. For example, if your liquid cash is going to pay things that are not rising in price, but your other cash is in a savings account earning interest, wouldn't you be relatively less affected by inflation?
voisin 4y ago
> Inflation is a tax on idle money. Inflation is generally around 3%, so it costs 3% of your money for it to be "liquid" (idle). I hear this all the time. Inflation measured by CPI is not a tax on the cash held by the rich. The basket measured by CPI is a rounding error to that level of wealth. If you held even $1 million in cash, you need to look at the things you buy with that cash as investments and compare how those values have been changing. For example, if you were a tech investor, you’ve seen far greater than CPI level inflation in the assets you buy over the last 5 years, so holding as cash wasn’t very smart. But if you blindly dumped cash into tech this year to avoid “inflation tax” then you missed out on massive deflation in the asset you buy. Zooming out to the wealthy, consider commodities, real estate, bonds, stocks, etc. most asset classes have crashed, so holding cash isn’t necessarily a bad idea (at least, it certainly isn’t a bad idea because “inflation is running hot”).
- benj111 4y ago
  Over time stocks tend to beat inflation. Looking at one small window of time is just wrong. Plus if you just look at liquid assets you miss how these people actually made their money. Plus if you look at the long term 3% compound inflation is seriously corrosive. That's over 30% of your wealth gone in 10 years. How long before things like food and bills become serious concerns?
  - voisin 4y ago
    > Over time stocks tend to beat inflation. Looking at one small window of time is just wrong. It is wrong only if someone is sitting in cash for long periods of time. A poor person needing to buy groceries every week is seriously affected by CPI inflation. A rich person holding onto significant cash because they view asset prices to decline is actually experiencing deflation in the thing they want to buy and CPI for that person is utterly irrelevant. The long term return of stocks is irrelevant to this discussion. > Plus if you just look at liquid assets you miss how these people actually made their money. Not sure what you are getting at here, but it is beside the point I am making that CPI is not relevant to the wealthy holding cash. > Plus if you look at the long term 3% compound inflation is seriously corrosive. That's over 30% of your wealth gone in 10 years. How long before things like food and bills become serious concerns? Again, this isn’t something that affects the wealthy. If a wealthy person wanted to buy META a year ago, the price has declined 70% since then, so the asset you wanted to buy has experienced deflation giving you a better entry point, regardless of CPI inflation. Replace META with almost any other asset and the same statement is true over the last year or so.
moralestapia 4y ago
Huh? Is this stack overflow? OP asked a very specific thing, not for this (very) amateurish lesson on "rich people and taxes".

boeingUH60 4y ago

I don't think so. I don't even think it's possible to estimate someone's liquid assets except the person gives you a hint...maybe ProPublica's leaked tax files trove [1] can do the job, but they removed any identifying information on anyone who wasn't a public figure, presumably to avoid lawsuits. 1- https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax https://www.propublica.org/article/the-secret-irs-files-trov...

tomp 4y ago

Stocks are amongst the most liquid assets, only topped by bonds. But many rich people are rich in private companies, apartments/houses, and boats, which are all much less liquid.

conformist 4y ago
Yeah, exactly. Perhaps the OP meant unlisted shares or something like that?
- mypastself 4y ago
  Liquidity is indeed a spectrum, but I assume the OP means “cash”: physical currency, bank deposits etc.
  - lupire 4y ago
    That "etc" is extremely load bearing as it pertains to the OP question and not a technical detail of financial engineering.

jzellis 4y ago

Yes, since you ask: https://www.interpol.int/en/How-we-work/Notices/View-Red-Notices https://www.interpol.int/en/How-we-work/Notices/View-Red-Not...

joshxyz 4y ago

that's a tough metric if you meant liquid as in cash on hand that is not actively making them money, just why would they disclose that. there are also forms of assets that are actively making them money yet easy to access and reallocate (say at x% loss depending on how urgent you need it).

bell-cot 4y ago

In general, there are far more disclosure and public record laws around stock ownership than around cash-like assets. (And the folks assembling "X Richest People" lists still have to do quite a bit of digging & guessing.) Also - "liquid cash" is a vague term. Depending on the situation, accountants put a wide variety of not-literally-cash assets into the "cash & liquid assets" category. Even if you could get all the data - who was where on a "X Liquid Cash Richest" list would be extremely sensitive to both (1) the exact date of your list and to (2) the exact definition used in the accounting.

rawoke083600 4y ago

ahhh ! I too want a list of viable "stick-up" targets :) Too many a times ive got "sure, i can get you the money in 3 to 5 days" excuse in my career as the 'HandsomeBandit' /s

ksec 4y ago

I dont understand what makes Stock not liquid? Unless you want to sell it all, you can borrow against your stock for cash. If you want "Cash" only. I believe that point of owning cash is privacy and not having to disclose them.

popol12 4y ago
That's very limited If you're Jeff Bezos there's no bank that is going to lend you 100B$ against your stock, because: 1. they don't have this money available themselves 2. there's less than 100B$ liquidity to dump these stocks on the market if they go down in value and Jeff's assets have to be liquidated, so the bank will limit the amount of money it will lend
- eastern 4y ago
  The liquidity of anyone's stock holding depends entirely on how much one holds compared to how much is routinely traded on the markets. If I own 0.01 percent of any heavily-traded stock, it's 100% liquid. I can sell it whenever I want at a moment's notice. In any such accounting it will be added to my liquid wealth. But if I own 25% of the same stock, it's illiquid. If I also run the company, then it's worse because any attempt to sell a large part of my holding will itself trigger a crash in the price.
- pastacacioepepe 4y ago
  Poor Bezos, one of the richest man in the world, yet has no cash at hand. I've heard stories of him having to ask money to the passerby to afford lunch. So sad to be the richest man but to actually own nothing. Hey poors, take example from Jeff! He's not liquid at all, like all of you, but he's always so happy!
  - GaylordTuring 4y ago
    Who said anything about that you should feel sorry for Jeff Bezos? The parent commentator simply described the circumstances regarding what Jeff Bezos can get. Who are you arguing against?

nl 4y ago

"Liquid" is a spectrum, not an absolute. Stockholdings of highly capitalized, highly traded stocks on major stock exchanges (NYSE, Nasdaq, FTSE, a few others) are one of the more liquid assets there are. If you are a multi-billionare it's reasonable to think you can convert maybe $500M - $1B of stock holdings to cash and have it in your bank accounts in 24 hours. See https://www.investopedia.com/ask/answers/032715/what-items-are-considered-liquid-assets.asp https://www.investopedia.com/ask/answers/032715/what-items-a... > Cash equivalents are typically investments that have short-term maturities of less than 90 days and are considered liquid assets because they can be readily converted to cash.

zokier 4y ago
Exactly, holding $1B of TSLA vs S&P500 have very different degrees of liquidity I imagine. So an interesting metric would have all the assets categorized and multiplied by some sort of liquidity factor. Of course in practice that is pretty much impossible to actually accomplish.
- cypress66 4y ago
  I don't think they would be that different. Dumping 1B of TSLA isn't too hard probably. But with other smaller stocks sure.
- nl 4y ago
  Part of the selection criteria for inclusion in the S&P500 is "Minimum monthly trading volume of 250,000 shares in each of the six months leading up to the evaluation date" If you tried to move $1B in shares in the smallest company in the S&P500 then yes you will move the market for sure. But if you have $1B invested across the S&P500 then it will barely be noticed. > So an interesting metric would have all the assets categorized and multiplied by some sort of liquidity factor. Of course in practice that is pretty much impossible to actually accomplish. Not at all. Average trading volume times price is almost exactly that.
  - zokier 4y ago
    > Not at all. Average trading volume times price is almost exactly that. For stocks, yes. But there are plenty of other modes of wealth too which can be much harder to estimate. Like for example what is the liquidity of Bezos' half billion dollar yacht or Putins billion dollar palace?

zie 4y ago

No such list that I'm aware of and the US govt would be at the top of the list ;) Because of inflation and FDIC protection limits, most people don't carry around excess cash. It costs money to hold cash. Fidelity will let you hold up to 1.25M before getting past FDIC protections. Many don't like their cash to go beyond FDIC protections, so 1M or so cash is around the upper limit people would regularly want to hold.

conaire 4y ago

I think easily liquifiable assets in general would be a better measure. Bill Gates would be somewhere near the top, he could sell most of his diversified ~100b stock portfolio without causing much of a stir.

simne 4y ago
Nope. He would pay HUUGE taxes if do this.

rco8786 4y ago

If there is such a list - there will be a bunch of people you've never heard of on it and certainly would not want to emulate. People don't hold their wealth in cash because it is constantly depreciating by design.

nicopappl 4y ago

After a certain level of wealth, most assets are financial and liquid cash becomes a vanishingly small part of total wealth. I've absolutely 0 info on cash distribution across the richest people, but this figure shows average asset across all people (in France). It still can be helpful as a way to "visualize" asset type property distribution across the spectrum. http://piketty.pse.ens.fr/files/ideology/pdf/F11.17.pdf http://piketty.pse.ens.fr/files/ideology/pdf/F11.17.pdf

halfsquatch 4y ago

Why do you ask? Are you looking to pull a job? ...can I get in on it?

bryanlarsen 4y ago

$100 in paper cash is more liquid and easier to spend than $100 in stocks. $10M in paper cash is far less liquid and harder to spend than $10M in public stocks.

jtthe13 4y ago

If you are rich with most of your assets in liquid form, you're not richin' right. The whole point is to keep as little liquid assets as possible and invest in a diverse portfolio of longer-term, return-yielding investments. You'll want short-term liquidity for upcoming payables, and long-term solvency to justify leveraging as much as possible of your investments through borrowing.

concomitant 4y ago

Such a list would include hedge fund managers, such as Ken Griffin, Steve Cohen or Jim Simons.

johnea 4y ago

Lists of richest almost never include the _actual_ richest people, since they usually exclude royalty and organized crime bosses...

incomingpain 4y ago

Anyone wealthy enough will know not to have any actual currency. It's an extremely rare thing for someone to have realized gains and be holding liquid. Once you know this reality, when folks like AOC want to ban 'billionaires' what they are actually saying is they want to go after unrealized stocks. Which isn't just stock market, it can be fine art, cars, whatever. Their goal is to seize private property to fund their spending. Many countries have tried this, all of them collapsed.

simonblack 4y ago

Cash-poor stock-rich is the current measure, .. More accurately, that should be 'Cash-poor, asset-rich'. Assets are not just stocks, but also real-estate, precious metals*, commodities such as copper, wheat, etc. *Gold as normally looked on as a 'store of wealth', not an 'investment'. It has been traditionally looked at in the same way as a permanent form of cash, rather than as a commodity like copper, or iron, or other metals. Spare cash lying around is 'lazy money'. While it's good to have some cash on hand, it's poor investing to keep a lot of cash lying around. How much cash you have on hand is a function of your wealth-level. Some of us can get a bit twitchy if the cash(plus gold) levels should go down under a couple of hundred thousand or so. Your assets should be out there working, and bringing in more money. Stocks are only one form of asset. And most people use them wrongly. Many people people chase the share-price without bothering about the company's fundamentals which is where real investing is involved. 'Trading' is merely another form of gambling. You do 'trading' for fun, not for investment, and you should be willing to lose all of that money if it be. A good rule-of-thumb for an asset is that you have to be able to hold it in your hot little hand or at least touch it. Anything else is just numbers in somebody's computer and that can be taken away from you in the blink of an eye. (Or even when the power goes off.) Oh, and there's nothing 'safe' about a Bank's Safety Deposit Box. If they hold it in their Bank, it's theirs, not yours. One last thing. Get rid of the debt. Pay off your mortgages as soon as possible, within months rather than years. Keep your Credit Cards in a positive balance rather than in debt, so pay them off entirely at the end of the month or even more often. I consider it a failure on my part if they get into debt at all. Online banking is your friend.

simne 4y ago

Check credit ratings: Moody's, S&P Global, and Fitch Ratings. They check all participants, for what amount of cache they have. AAA+ rating only possible for subject, who have 100% coverage of all credits bodies by cache. Unfortunately, from NASDAQ, only Microsoft have AAA+ rating. Other companies have coverage only for year or more of percents, none cover body.