Ruminations on Accumulating Wealth

[Briar Lee]

I read this morning where the 500 richest people alive accumulated a tidy 1.5 trillion extra dollars in 2023.

Xxxxxx


It was a comeback year for the world’s wealthiest.


The combined net worth of the 500 richest people surged by $1.5 trillion in 2023, fully rebounding from the $1.4 trillion lost the year prior, according to the Bloomberg Billionaires Index.


Once again, their fortunes were closely correlated to the performance of tech stocks, which rose to fresh records this year despite recession fears, lingering inflation, lofty interest rates and geopolitical turmoil. Tech billionaires saw their wealth grow by 48% or $658 billion, propelled by intense hype around artificial intelligence.

Musk Leads World’s Richest to $1.5 Trillion Wealth Gain in 2023 — Bloomberg

It was a comeback year for the world’s wealthiest.

stocks.apple.com

Xxxxx

But if they lost 1.4 trillion in 2022 and gained back 1.5 trillion this year, they are only about treading water, I’d say.

And they don’t get that money unless they sell, and that would trigger taxes, so that’s not too likely they’ll cash in their chips.

Looking in my buckets I’ve gained a whole lot of Marxman pipes in 2023, and some other nice pipes, too.

My youngest son might resell those for quite a profit maybe, after my trophies at last, I lay down.

But we who suffer from pipe accumulation disorder have to take our dividends in enjoyment of our purchases.

I hope my friends here have had as successful a year accumulating pipes.

Pipes are cheaper than space planes, social media companies, and long legged helicopter pilot sweethearts, you know?

I’m going to color my biggest Marxman 400 a deeper shade of red and listen to some music, and count all my blessings.

Happy new year, from a half mile South of Bug Tussle.

 

[sham]

Happy New Year, @Briar Lee. Hope 2024 blesses you with the spongiest of Algerian briars

 

[OzPiper]

Happy New Year @Briar Lee
I hope you get yourself a Castello in 2024
I await with bated breath your paeans when that happens

 

[warren]

Accumulating wealth is always a good thing. Accumulating pipes so as to burn more moneys? Satisfying but, perhaps not the best use of one's moneys.

 

[Briar Lee]

Accumulating wealth is always a good thing. Accumulating pipes so as to burn more moneys? Satisfying but, perhaps not the best use of one's moneys.

To defend a bad habit is one of the most reliable reactions a man has to being called out on it.

Not counting the two 400s and two 50th Anniversary Marx Freehands and a Marxman Straight Grain, average $100 each, my pipes average $25 and I might spend that every week on one.

$25 won’t buy but one good fifth of bourbon.

I dodged that bad habit, because the hangovers hurt.

Besides, I remember Ira Louvin songs.

 

[VDL_Piper]

And they don’t get that money unless they sell, and that would trigger taxes, so that’s not too likely they’ll cash in their chips.

Hmmmmmm, imagine if you will someone who owns $1 Trillion in assets, no debt. The said person goes to the bank and borrows $200 billion against their assets at 3%. They invest the $200 billion with a YoY return of 7% fully franked. Now just tell me again how they don’t get a dime unless they sell their assets

 

[warren]

Now just tell me again how they don’t get a dime unless they sell their assets

It really is that simple. Use cheaper moneys, other peoples moneys, to make make your money. The bank's money is often the cheapest available. So, when it is, use it. Use it wisely to build your own wealth. Building wealth using other peoples money? A very wise thing to do. But, and this is critical, you have to use the other folks money with at least a modicum of good sense. Have a vision! Then develop a plan! Do the work! Reap the profits and repeat. If it was easy, everybody would be worth millions. While a million isn't much any more ... it's a start.

 

[huntertrw]

I always liked what the late humorist Robert Benchley once wrote in 1930 regarding accumulating wealth:

"I am known as a bad business man from one end of the country to just a little beyond the same end. Of course, if I wanted to, I might point out that out of a possible $5000 which I have made since I left school, I have had $3000 worth of good food (all of which has gone into making bone and muscle and some nice fat), $1500 worth of theater tickets, and $500 worth of candy, whereas many of my business friends have simply had $5000 worth of whatever that stock was which got so yellow along about last November."

 

[Briar Lee]

Hmmmmmm, imagine if you will someone who owns $1 Trillion in assets, no debt. The said person goes to the bank and borrows $200 billion against their assets at 3%. They invest the $200 billion with a YoY return of 7% fully franked. Now just tell me again how they don’t get a dime unless they sell their assets

An aside.

America has a stepped up basis at death for the value of assets. My father paid $15 an acre for 60 acres in 1944 that I still own. If I sell it the basis I have is from 2010 when my mother died, about $3,500 an acre. It’s worth maybe $7,000 an acre today. If I don’t sell it and I die, then my kids get off paying ANY capital gains taxes. It’s a powerful incentive to hold it.

But I’m well off, not rich. There’s a huge difference if you are truly rich.

Let’s use Jeff Bezos.

Old Jeffy might have invested a few billion of borrowed money and even after his divorce he’s worth 170 billion.

Here’s how he gets richer:

——

In between 2014 and 2018, Bezos paid $972 million in total taxes on $4.22 billion of income. Meanwhile, his wealth grew by $99 billion, meaning the true tax rate was only 0.98% during this period

https://finance.yahoo.com/news/billionaires-jeff-bezos-elon-musk-164830206.html#:~:text=For%20instance%2C%20ProPublica's%20report%20showed,only%200.98%25%20during%20this%20period.
——

But someday Jeff will lay down to sleep no more.

If rates stay the same his heirs will get docked 40% of the estate, all due then, although it will have a stepped up basis. They’ll likely sell rather than borrow 40% of their inheritance.

So that means guys like Bezos can trade in his wife for a sexy helicopter pilot and it just reduces his estate about sixty billion, and in a couple or three years he gets to keep the helicopter pilot, his first wife is richer too, and he’s increased his net worth again to what it was.

We don’t have to worry much about such things in Bug Tussle.

When I pass through the air to meet the Master my kids won’t have to worry if I paid $25 for a pipe and they get $30, no taxes.

And if you have over 12 million you’ll have to worry about estate taxes, but you’ll be dead anyway, you know?

We all love watching the rich folks.

But they have their own problems and all that.

 

[VDL_Piper]

We all die, it’s what you do between birth and the end. This is your legacy, sometimes opportunity knocks very softly!

 

[Servant King]

I always laugh when I read virtually any analysis of the "rich" and their "wealth." Even a cursory understanding of the way the financial system works will answer any questions as to why. Mike Maloney's "Hidden Secrets of Money" series is perhaps the best starting place I can think of, FYI.

It's all a dog and pony show. The so-called "rich" don't have any money either; it's all debt-swapping, IOUs being pinballed off other IOUs (leveraging). It's all smoke and mirrors, none of it is real, and it only works for a select few by tricking and deceiving others. If I recall correctly, I established on a Dow Jones thread the difference between real assets and paper ones. Anyone who doesn't hold physical commodities (wheat, chickens etc.) has absolutely nothing of real value. And on a related note, anyone who is not holding real money (precious metals) is likewise screwed--all that fictional stuff can go to zero at any time. Currency, stocks, treasuries...you name it. The only intrinsic value a Federal Reserve Note has is either for tinder or toilet paper. And judging from the amount of germs present, I'd certainly be wary about wiping the ol' keister with even a higher denomination bill. Sorry Ulysses!

Playing hot potato with debts (all created out of thin air by loans being taken out) is NOT true wealth. Period!

 

[VDL_Piper]

You’re correct @Servant King all the things you mention are vehicles to generate paper wealth, even wheat and chickens have swaps and futures against them. That said, if someone was to take paper/notional wealth/assets and return profits or accrued capital into primary industry, well I guess they are truly generating wealth. Glad I’m a farmer because when it all goes wrong and it does/will, clean water, fresh produce, meat and eggs and a solid family kinda look like gold bullion. The real issue with being a farmer when it does all go wrong this next time will be keeping the hoards that come looking for something they perceive they have a right to because times are tough, this is the issue. The next depression will be the one that brings the world undone. Why?, well in the last depression the people where different. They were men and women who could work hard at anything, people who would help one another, share what little they had to survive. The current generations won’t work a menial task to get by. They all want the top job, won’t hop on a shovel, possess a sense of entitlement, what’s yours is theirs and none could find a way to build or create something from nothing, tie it up with wire or twine to make it last, patch and darn clothes with a hole, wear hand me downs, you get my drift. If the lights don’t come on when the switch is flicked, water doesn’t come out of the tap, internet is down and their knowledge base is gone, this is the moment the world we have built unravels.

 

[Streeper541]

"But if they lost 1.4 trillion in 2022 and gained back 1.5 trillion this year, they are only about treading water, I’d say.

And they don’t get that money unless they sell, and that would trigger taxes, so that’s not too likely they’ll cash in their chips."

Wealth that one can't touch, and can't use, isn't really wealth it all... it's the illusion of wealth.

 

[mikethompson]

I never equate wealth with money. I value my family, peace of mind, and character much more.

 

[warren]

Who the media picks for their "World's Richest Whatevers" is fun reading for me. I understand feeding the masses to generate clicks or ad sales is important for their bottem lines. The lists are mostly the result of some sluething, a bit of research and, a lot of conjecture. Why folks take such so seriously is beyond me. To encourage class warfare? Possibly. Jelousy? I'm sure there is a bit of that. Envy also.

But, my main concern is my "bottom line." I'm not in a competitionwith nor, do I begrudge someone making money, piles of money!

Playing hot potato with debts (all created out of thin air by loans being taken out) is NOT true wealth. Period!

Turning that "borrowed" cash into personally owned cash is certainly "true wealth" measured in moneys. The person took the risk to take out a loan and use it wisely and can enjoy the return on the investment. Maybe in cash, possibly on paper only but, they have increased their "wealth" by taking risks others may not be willing to.

You define wealth differently than I. I prefer to measure it in cash available. So, I have no idea as to the true wealth as measured in cash available/on hand, of anyone on the various lists. You appear to trust media reporting and lists. I'd bet most of Forbes 100 Richest "Whatevers" can put their hands on more cash, quickly, than all the members here could pony up from their wallets in total at this moment. If they can't it's because they have "people" to handle cash transaction, a Big Mac, new car, opera tickets, Christmas presents for the kids, and so forth. They, the rich, can't be bothered with such mundane things. Can't muss up lines of $5000.00 suit with a wallet.

I never equate wealth with money. I value my family, peace of mind, and character much more.

Me too. But, this thread isn't about such. And, money is important to everyone to some degree or another. It's how we measure others' success or, we gotta heat the house, feed and clothe the kids. For some money indeed buys happiness. For others? The security so they can seek and, hopefully find a bit of happiness. Anyone who says they can be happy broke, is lying to you, me and themselves. Just ask a member who sees a pipe they must have and find they're a little short in the wallet. Going home with the pipe would have made them happy. But, now, leaving the store without the "find" has made them ... well, sad.

For some the rich are to be dispised and envied. For others? Admired. We all value "stuff" differently. For me a pipe is simply a tool. Others appear to have somesort of special relationships with certain pipes. Whatever floats one's boat is what really counts, what gives one serenity or comfort.

 

[brian64]

Glad I’m a farmer because when it all goes wrong and it does/will, clean water, fresh produce, meat and eggs and a solid family kinda look like gold bullion. The real issue with being a farmer when it does all go wrong this next time will be keeping the hoards that come looking for something they perceive they have a right to because times are tough, this is the issue. The next depression will be the one that brings the world undone. Why?, well in the last depression the people where different. They were men and women who could work hard at anything, people who would help one another, share what little they had to survive. The current generations won’t work a menial task to get by. They all want the top job, won’t hop on a shovel, possess a sense of entitlement, what’s yours is theirs and none could find a way to build or create something from nothing, tie it up with wire or twine to make it last, patch and darn clothes with a hole, wear hand me downs, you get my drift. If the lights don’t come on when the switch is flicked, water doesn’t come out of the tap, internet is down and their knowledge base is gone, this is the moment the world we have built unravels.

The next depression coming collapse will also be very different because the majority of the population was rural last time. The cities are already in major decline even now and are starting to look third-worldish in many areas. When the SHTF the stores will be emptied within a day or two...the dogs and cats will be eaten next...and after that the cannibalism will begin...probably won't take even a month for that to start.

There's a very thin line between civilization and Mad Max World...and the vast majority of the population has no means or skills to get by for more than a few days without the "power structure" intact. The social engineers want to get rid of most of the population anyway...when they pull the plug it won't take long after that. If you've got a farm and resources to survive, you'll definitely need the means to protect it...because the zombie hoards will indeed show up at some point...the ones that make it out of the cities alive.

 

[rick3wood]

Worked my whole life for companies 9 to 5 made a decent living. finally retired and I’m just too lazy and old to worry about why I wasn’t a millionaire

 

[Briar Lee]

About thirty years ago my father in law, who owned fifteen banks, sat me down to discuss a problem he had.

He and his wife were turning sixty and old age loomed, and he was worried what would happen if either one had to go to a nursing home.

I loved him and my mother in law beyond measurement. And how do you politely tell your father in law, that he’s one of the few people that don’t have to worry about the cost of a nursing home?

He’d just bought a small hospital for 8 million and converted it to a rehabilitation center and sold it for a profit of about 10 million and shoveled all that back into remodeling banks.

So I reminded him, of that hospital and said I’ll bet a decent small nursing home isn’t any more than a small hospital, and you could buy one, and they’d be sure to give you and grandma the royal treatment.

He laughed and said, in my mind it’s still 1949, my goal is to earn $3,000 a year, and not have a car payment.

As it turned out he said he had 168 employees and 15 of them made over $100,000 a year, and when he looked down from up there, it was a long way to fall.

So I suggested, that since he had 15 banks, that he might pick out a couple he liked the least and sell those and he’d be just stuffed with money, more than he could ever spend.

He thought a minute and said if I sell one or two the buyers would all know me, and know those were dogs, and not pay what they are worth.

His daughter and I divorced and I missed my in-laws quite a bit.

In 2009 he almost lost everything he owned, but got it all turned around before he died a couple of years later, when he was 80.

The rich are very different than you and me.

They have a helluva lot more at risk to lose.

 

[Piping Abe]

Another thread about the Federal Reserve already?

 

[warren]

They have a helluva lot more at risk to lose.

And, for many, not all, they put in the time. do the work and make their own luck. We, the minions, choose not to exert ourselves in that manner, We simply do not have the vision or the willingness to risk everything on our known abilities. And, I think, we lack the vision and settle for ... what we are willing to settle for. Also, we lack a belief in our own visions and/or the drive and sacrifice required. We are more easily satisfied or, for some, ill-equipped with the determination. Then there is the luck involved. The luck that what we envision is something the world desires. The world may not even know it needs the product but, timing and vision is everything. Vision being the most important. Many things were developed before their time and another visionary came along years later, took advantage of the earlier developments, refined it and made a mint providing what the world didn't know it needed or desired.

Who knew we needed the telephone? The airplane? Mass production? Double action revolvers? Steam powered ships and trains? Ray Kroc and his vision? Wireless? DOS? The McIntosh? Automatic transmissions? Time zones? The list goes on and continues to grow. Some of the inventors/developers. men in sheds if our British members will permit me, will continue to grow as long as some have a vision they can't/won't ignore and the willingness to risk all be it family, property or, reputation.