What will really make it sink in is looking at what the highest paid athlete you know of earns in a year and estimate what their earnings are while they’re just there sitting in the couch, having a meal ($25k accumulates during an average meal) or taking a crap ($2500) - they earn about $200k in their sleep, for example.
Then realize they would need to earn that much for 800 years to have as much money as Jeff Bezos.
It's not about how hard they work, it's about how much value they provide, or the worth of the assets they own if they sell all of their assets without a price crash
It's not accurate to think of his billionaire status as compensation. Jeff Bezos owns ~10% of a $2.2T company. That's the whole story. He never even took a penny of stock comp his entire career at Amazon.
It really is an important clarification. I have worked at startups where the founders worked several times harder than I did and they ended up with $0 and one of them in debt.
Obviously he isn't working 130 billion times harder, but he may be some combination of 130 billion times as much (privileged upbringing × strategically focused × economically impactful × smarter × harder working × luckier × n other relevant factors) than the typical American, that I can seriously consider.
I also figure he, like Elon Musk, pays orders of magnitude more than his fair share, if we consider the definition for "fair share" to mean everyone pays the same amount of direct cash transfer into the system and gets the same amount of direct cash receipt out of the system.
> I also figure he, like Elon Musk, pays orders of magnitude more than his fair share, if we consider the definition for "fair share" to mean everyone pays the same amount of direct cash transfer into the system and gets the same amount of direct cash receipt out of the system.
I appreciate the clarity, but this is a bizarre definition of fair share. Do you really believe that everyone gets the same amount of usage from, and contributes to the same amount of wear and tear on, municipal and infrastructural resources? Do you believe that industrialists do not ravage the earth and society while chasing profits? These externalities measure in the billions (when they can even be quantified at all) for players like Amazon.
>Do you really believe that everyone gets the same amount of usage from, and contributes to the same amount of wear and tear on, municipal and infrastructural resources?
No, I do not believe that, but it's worth noting that taxing income has no direct relationship to usage-based taxation of public resources. There are people who pay millions in income taxes while making negligible use of roads, and there are net tax recipients who contribute no net taxes at all driving 40-ton 18-wheelers inflicting vastly more damage to roadways than 99% of people. If we want to tax externality costs, we should tax externality costs, not income.
>Do you believe that industrialists do not ravage the earth and society while chasing profits?
Regarding externality costs: see above. Income and externality costs are not the same, nor are they necessarily closely correlated.
Of course! I think carbon taxes and the like are a great idea. If we had the social technology and the social consensus to enact pay-what-you-use schemes for everything, we might be close to a utilitarian utopia already. (For example, I have no idea how to compute the marginal benefit to an individual derived from living in a society that values egalitarian access to higher education, even if that individual does not choose to access those resources directly; but such would be necessary to pursue a rigorous calculation of that individual's fair share.)
Lacking that utopia, we have to estimate. You say income taxes are an unfair mechanism; what do you think is fairer?
> I also figure he, like Elon Musk, pays orders of magnitude more than his fair share, if we consider the definition for "fair share" to mean everyone pays the same amount of direct cash transfer into the system and gets the same amount of direct cash receipt out of the system.
Pays to whom? Verifying this claim seems to require a definition of "the system." If you literally mean all money expenditure, then almost certainly this is literally true. But it's not obvious to me that the expenditure on, for example, Bezos' vanity space trip benefited "the system" more than someone spending a much smaller amount, but dispersed more widely through the community. Or, if it did, it's not obvious to me that the additional benefit was in any reasonable proportion to the additional expenditure.
>Pays to whom? Verifying this claim seems to require a definition of "the system."
Taxes paid to governments. "The system" being governments - federal, state, county, city/locality.
Cash receipts out of the system would include Social Security, Medicare, Medicaid, unemployment, WIC/SNAP, cell phone vouchers, housing vouchers, transportation vouchers, SSI/SSDI, and even all tax credits (including indirect tax credits, like Elon Musk receiving a tiny percentage of total Tesla profits, which are themselves a non-100% percentage of vehicles sold, which are themselves purchased overwhelmingly with customer money that does not come from tax credits, of the percentage of cars sold that are even eligible for tax credits).
And yes, I do count those slivers of indirect EV tax credits as receipts for Musk, however significantly those dollars are diluted before they reach Musk, and count them against his contributions (which include the highest individual income tax bill ever paid by anyone in history).
A friend of mine, after a ski accident, looked for a knee rehab place. The one he found was patronized by pro athletes. He said they worked out like mad. He asked them why, and they said that if they didn't get back in shape, the $$$$ gravy train for them was over.
There appears to be an unspoken normative view being asserted throughout the thread that people who do not invest their money and take advantage of compounding should achieve outcomes comparable to those who do invest their money and take advantage of compounding, essentially idealizing the elimination of the opportunity cost of not strategically deploying capital, discounting the benefits accrued to those who can do the math and choose to act upon it rationally, and privileging the act of spending all disposable income on nonproductive ends. I suspect a nonzero amount of motivated reasoning is at play on behalf of those who choose to spend disposable income nonproductively on depreciating liabilities rather than assets; this seems closely psychologically related to regretting self-failure to optimize for long-term economic outcomes that is directed back as spite at those who successfully optimize for long-term economic outcomes.
The point is that you can’t catch up, even making more money than you could ever reasonably hope to earn. If you had $220,000,000, you can catch up to Bezos in 60 some-odd years; but by then he will also have been compounding at 7% per annum, and will have north of $19,000,000,000,000, which is around 2/3rds of America’s GDP today. Of course, Jeff Bezos will be dead in 60 years, but this leads us to the core of the debate: What did Jeff Bezos’ children do that would warrant their wealth?
I don't need to catch up or get anywhere remotely close to Bezos be financially satiated. If tens of millions of people can achieve financial independence, comfort, and safety, without the privileged upbringing, essentially just through the decision to strategically navigate life with financial independence as a goal, rather than social conformity as a goal, why does it matter if others have more?
7% annual compounding is a decent floor, but it's an iron law that sophisticated investors can't outperform. AMZN is has certainly compounded much faster than 7% per year over the last two decades, and access to that investment was democratized the entire time.
Wealth isn't morality, being wealthy isn't a sin, and wealthy people's offspring have no burden of justification to "deserve" their wealth.
Insisting otherwise is a direct attack on the fundamental right to private property that underpins western civilization.
When the US government provides the same equal protection to all citizens, including those who contribute nothing but violence and suffering to everyone around them at the expense of taxpayers, what horrific atrocity are Jeff Bezos' children of that warrants confiscation of millions or billions of lawfully and voluntarily acquired wealth?
> I don't need to catch up or get anywhere remotely close to Bezos be financially satiated.
No one does. The issue comes when they start using that money to acquire political power. He wasn’t joking about seeing your margin as his opportunity.
> Insisting otherwise is a direct attack on the fundamental right to private property that underpins western civilization.
Western civilization includes a history of taxation, expropriation, and probate fees. No amount of libertarian revisionism will change this.
> Then realize they would need to earn that much for 800 years to have as much money as Jeff Bezos.
If they would invest the money, they would accrue exponentially more money. Most seem to just spend the money on silly stuff, and wind up with nothing (according to an ESPN documentary on it).
$1 billion dollars looks like $20-$35 million dollars a year of indefinite spending, inflation adjusting, depending on the exact form of the billion dollars and the tax rates involved.
So, spending 100% of the after tax income of like 75 (well paid!) staff engineers at a big tech company in CA, but without having any job.
I always thought one of the biggest problems with modern education is not spending enough time teaching people about interest rates/return on investment. If everyone just understood what you're pointing out here--just really "got it"--I feel like the world would be in a much better place. It's not dire (I don't think?), and I know we've come a very long way, but, man, it could be so much better.
Maybe. A lot of these calculations are usually based on historical averages for the US stock market. For the economy to keep moving, they need people to spend their money.
Eventually it may all even out, where people spend so much once they hit a certain point in their life/portfolio, that it allows for everyone else to be saving and investing everything in the first few decades of life. But a transition period where everyone stops their mindless consumerism would be rough on markets. Sales of “wants” would collapse and the stocks would fall right with them. At least that’s my theory.
I also often wonder if the stock performance we’ve seen is simply a result of the way the population has grown. If we are seeing slowing growth, or even population decline, can we expect the markets to contract right a long with the population. What will that mean for everyone’s retirement accounts?
Except for some extremists, I don't think the advice is to save and invest everything. Instead, you should try to be saving and investing a meaningful amount of your income.
I appreciate what you're saying here, all of it, and wonder some of the same, but my comment was likely overly cryptic because I didn't mean anything about consumption.
> . If we are seeing slowing growth, or even population decline, can we expect the markets to contract right a long with the population. What will that mean for everyone’s retirement accounts?
Shit, the bigger scarier one is housing and ss. A huge percentage of people's retirement is either directly in housing (i.e. their house is their only asset), or indirectly in housing via their (mbs or other mortgage related bond products). If population declines housing prices may crater, and if population declines ss payouts may also crater. Gonna be a rough period of time (decades?).
I have this theory that a big driver of the lack of housing, and the resulting high prices, is due to the lower rates of marriage. More single occupancy homes means more homes are required. This goes hand in hand with a declining birth rate. So this breakdown in the family structure could be at least partially responsible for both the rise and collapse of housing prices. That’s kind of interesting.
Where does this return on investment come from? From people working. It's not possible for everyone to live on investments, someone has to do the actual work. Imagine if everyone started investing most of their money now, and after a generation or two everyone had enough capital to live on the interest alone. Who would do the work? I think we would benefit more from letting a larger part of the returns that work creates go to the people who do the work, not to the people that happen to have a lot of capital.
It seems like that in every country. If you think about it, if you are rich, it doesn't really make sense to want other people to know about compounding. They might not signup for this insurance, or credit card, or spend the money onto the latest gadgets.
> If everyone just understood what you're pointing out here--just really "got it"--I feel like the world would be in a much better place. It's not dire (I don't think?),
Maybe, but it also is predicated on a market like today's market, where the average American saves approximately zero dollars and has to work until social security.
If everyone saved a lot, you'd get a different situation. Probably a better situation, but it'd definitely be different.
The average American might be able to save more and work fewer years if the average American didn't make the economically self-harming and unnecessary average spending decisions that average Americans make on social status signifiers, luxury goods, depreciating liabilities, etc.
Right, exactly. And that consumerism is no small part of what fuels stock growth. If that disappears, then paradoxically your investments won't get you as far.
59% of Americans can't cover an emergency expense of $1000. Economically disadvantaged people developing emergency funds and basic financial solvency is not going to destroy consumer spending.
Further, consided that the top 10% are responsible for half of all consumer spending, and the bottom 50% combined control just 2.5% of all assets. The bottom 60% ceasimg all spending would barely even move the needle, they're insignificant in the macro picture.
You are also making assumptions about my portfolio makeup, chiefly regarding long exposure to US equities that are primarily or substantially beneficiaries of consumer spending. This is not true for me personally, and moreover, there is plenty of money to be made in markets with or without tiny consumer spending blips.
This made me do a search on the missing Iraqi billions, as I remember there were details at the time how it was packaged in pallets and flown into the country. Couldn't find that, but according to The Guardian [0]:
> Over the first 14 months of the occupation, 363 tonnes of new $100 bills were shipped in - $12bn, in cash.
This visualization is wildly inaccurate. The supposed 1000 pixels are actually 100x100 pixels, which is 10,000 not 1000. Secondly, on many screens they are not actually pixels. For example, on a macbook pro you're likely seeing 40,000 pixels in actuality.
"The average American household spent $87,432 in 2021." That number seems awfully high to me? That's more than I am seeing the average household makes in 2023.
When I try to zoom in (by pinching the touchpad) on one of the charts at the bottom of the site, Firefox crashes. I guess there are too many pixels in the black bar :)
This is a good reference for the next time yet another security company goes for $XX,000,000,000 and the buyer says "because that's how much they're worth"
It's really unintuitive how a mere increase in number of dimensions could totally change the scale of things. This is the crux of the curse of dimensionality in machine learning. If you simply stacked it high, it may almost reach the sun (but no quite), but once you lay it into roughly a square (20000 x 50000), it spans only over a mile per side. To lay it roughly into a cube of 100 dollar stacks, you'd have something like 65 x 150 x 1026, which turns out to be about only 12 yards per side.
EDIT: I screwed up in the 1D calculation. A 10 million-height stack of 100 100$ bills only reaches 67 miles.
When you understand the extreme inequality; that most people don't have $100K and some people have billions, and you understand how the monetary system works to compound the billions, it puts into perspective how the system functions.
If the system seems like it's about 'value creation' it's only because billionaires let it be that way. With that kind of money, you can probably run the whole system however you want.
That kind of money cannot buy that many goods and services without causing hyperinflation... What can that money be used for? Business asset acquisitions, luxury real estate, fine art and political manipulations... Either way they're getting marginal benefits out of it; the asset valuations are likely inflated by billionaires' own wealth competing against one another. Ultimately, once that level of wealth is reached, the whole market becomes about political influence... And even this can cause inflation; but this kind of inflation can be offset by oppression; you can use money to incentivize people to control each other in a hierarchy.
In such society, as a regular person, you need to pick a billionaire tribe because the money flows top-down. If you're not in any billionaire tribe, what will happen is everyone else who is will be getting paid but you won't be getting paid. This is sad because the truth (about various things) is often a middle-ground between different billionaire perspectives or sometimes it's diametrically opposed to any billionaire's perspective. It's already a kind of monarchy, fueled by fiat money creation.
> consider the individual buying power of a billionaire
This is what I never understand about posts like this. The buying power of an individual for their own selfish purposes becomes meaningless at a surprisingly low number. One billion cannot even be spent as one or a few transactions.
If you're looking at a billion dollars you're looking at all kinds of debt, including US bonds. Much of what gives money value is the existence of debt (another thing is the obligation of taxation). Always has been, which is why trying to tie currencies to values of commodities or precious metals has always collapsed eventually...
It is likely more than just coincidence that the wealth gap increased so much as soon as we went off the gold standard in the 70s.
Might’ve been worth it if we all are ultimately wealthier than we would’ve been, but also easy to think it just become a way for the rich to soak the middle class with a hidden tax, that the proletariat applauds and votes in favor of with only short term thinking.
We get that middle class to be much less than 50% of the populace, as long as they give us EBT, and some money for healthcare and maybe once the mega corporations own most the property they give us some box to call shelter, the entire middle class will just become be good little subservient serfs, happy that our noble lords take so good care of us.
In Australia, a million dollars (US or AUD, doesn't matter) is a deposit on a nice home.
My former boss just sold his business and become a multi-millionaire. He'll have to go back into the workforce to be able to afford a decent -- but not palatial -- home in a nice suburb.
I find this visualization pretty useless. What I would appreciate is putting billion of dollars in terms of actual property you could buy with it, something like:
- This is a house (or palace rather) that you could buy for $1B
- This is an oceanic yacht of the same value
- This is a shopping mall which did cost about $1B to build
- This is an oil refinery that recently sold for $1B
- This is how many US senators you can bribe, and how many favorable bills you can push through Congress /s
Did you actually scroll to the bottom or got bored while scrolling and scrolling and scrolling on the big black box running "top to bottom"?
The whole thing is about perspective. The big black box is just the start.
I find it much more enlightening to think about all the pixels I had to scroll past, then seeing the same thing represented by a big and then small black circle and put it in perspective with things like people working minimum wage all their lives all the way up to the Bezos and Musks of the world.
Those relative sizes feel immediately "relatable" even though they're "just numbers".
On the other hand I find your examples (no offense intended) lack that.
This is a house (or palace rather) that you could buy for $1B
This is very area specific. I can buy the same house / palace for way less than a billion in one place vs. another.
This is an oceanic yacht of the same value
From a quick Google, most super yachts "in that price range" cost less than 0.5 billion. Not that this makes it any more relatable.
This is a shopping mall which did cost about $1B to build
Seems like the house thing above :shrug:
This is an oil refinery that recently sold for $1B
Refineries always just look huge to me. Whether they cost $1B or $100,000,000 I really couldn't tell you. It's just a huge place of tubes and stuff. I have no frame of reference so to speak.
This is how many US senators you can bribe, and how many favorable bills you can push through Congress /s
Lacking frame of reference as well, though yeah, the /s was worth thinking about this one. Maybe the original site could represent this as a number or relatively sized circles. "This is how many bills you could buy with this in 1975 vs. 2000 vs. 2025" /s
But then it'd really be about inflation instead of perspective.
What will really make it sink in is looking at what the highest paid athlete you know of earns in a year and estimate what their earnings are while they’re just there sitting in the couch, having a meal ($25k accumulates during an average meal) or taking a crap ($2500) - they earn about $200k in their sleep, for example.
Then realize they would need to earn that much for 800 years to have as much money as Jeff Bezos.
Mindboggling, thank you. Right on that note is one of my favourite tweets on the internet:
> Have you ever considered the possibility that Jeff Bezos just works 130 billion times harder than you?
It's not about how hard they work, it's about how much value they provide, or the worth of the assets they own if they sell all of their assets without a price crash
It's not accurate to think of his billionaire status as compensation. Jeff Bezos owns ~10% of a $2.2T company. That's the whole story. He never even took a penny of stock comp his entire career at Amazon.
It really is an important clarification. I have worked at startups where the founders worked several times harder than I did and they ended up with $0 and one of them in debt.
Obviously he isn't working 130 billion times harder, but he may be some combination of 130 billion times as much (privileged upbringing × strategically focused × economically impactful × smarter × harder working × luckier × n other relevant factors) than the typical American, that I can seriously consider.
I also figure he, like Elon Musk, pays orders of magnitude more than his fair share, if we consider the definition for "fair share" to mean everyone pays the same amount of direct cash transfer into the system and gets the same amount of direct cash receipt out of the system.
> I also figure he, like Elon Musk, pays orders of magnitude more than his fair share, if we consider the definition for "fair share" to mean everyone pays the same amount of direct cash transfer into the system and gets the same amount of direct cash receipt out of the system.
I appreciate the clarity, but this is a bizarre definition of fair share. Do you really believe that everyone gets the same amount of usage from, and contributes to the same amount of wear and tear on, municipal and infrastructural resources? Do you believe that industrialists do not ravage the earth and society while chasing profits? These externalities measure in the billions (when they can even be quantified at all) for players like Amazon.
>Do you really believe that everyone gets the same amount of usage from, and contributes to the same amount of wear and tear on, municipal and infrastructural resources?
No, I do not believe that, but it's worth noting that taxing income has no direct relationship to usage-based taxation of public resources. There are people who pay millions in income taxes while making negligible use of roads, and there are net tax recipients who contribute no net taxes at all driving 40-ton 18-wheelers inflicting vastly more damage to roadways than 99% of people. If we want to tax externality costs, we should tax externality costs, not income.
>Do you believe that industrialists do not ravage the earth and society while chasing profits?
Regarding externality costs: see above. Income and externality costs are not the same, nor are they necessarily closely correlated.
Of course! I think carbon taxes and the like are a great idea. If we had the social technology and the social consensus to enact pay-what-you-use schemes for everything, we might be close to a utilitarian utopia already. (For example, I have no idea how to compute the marginal benefit to an individual derived from living in a society that values egalitarian access to higher education, even if that individual does not choose to access those resources directly; but such would be necessary to pursue a rigorous calculation of that individual's fair share.)
Lacking that utopia, we have to estimate. You say income taxes are an unfair mechanism; what do you think is fairer?
Consumption taxes, rather than production taxes.
Taxes are a disincentive - this is why we tax vices.
We want to disincentivize rampant, mindless consumerism that fuels the externality costs, right?
Tax buying things - any things - all things - much heavier, tax the act of working to earn an income to survive much less.
Want to buy a car? Pay a big tax. Want to work hard to earn money to pay your bills and feed your family? Shouldn't be taxed for that.
> I also figure he, like Elon Musk, pays orders of magnitude more than his fair share, if we consider the definition for "fair share" to mean everyone pays the same amount of direct cash transfer into the system and gets the same amount of direct cash receipt out of the system.
Pays to whom? Verifying this claim seems to require a definition of "the system." If you literally mean all money expenditure, then almost certainly this is literally true. But it's not obvious to me that the expenditure on, for example, Bezos' vanity space trip benefited "the system" more than someone spending a much smaller amount, but dispersed more widely through the community. Or, if it did, it's not obvious to me that the additional benefit was in any reasonable proportion to the additional expenditure.
>Pays to whom? Verifying this claim seems to require a definition of "the system."
Taxes paid to governments. "The system" being governments - federal, state, county, city/locality.
Cash receipts out of the system would include Social Security, Medicare, Medicaid, unemployment, WIC/SNAP, cell phone vouchers, housing vouchers, transportation vouchers, SSI/SSDI, and even all tax credits (including indirect tax credits, like Elon Musk receiving a tiny percentage of total Tesla profits, which are themselves a non-100% percentage of vehicles sold, which are themselves purchased overwhelmingly with customer money that does not come from tax credits, of the percentage of cars sold that are even eligible for tax credits).
And yes, I do count those slivers of indirect EV tax credits as receipts for Musk, however significantly those dollars are diluted before they reach Musk, and count them against his contributions (which include the highest individual income tax bill ever paid by anyone in history).
A friend of mine, after a ski accident, looked for a knee rehab place. The one he found was patronized by pro athletes. He said they worked out like mad. He asked them why, and they said that if they didn't get back in shape, the $$$$ gravy train for them was over.
There's a comparison between Michael Jordan, at his prime, and Bill Gates
https://www.spiegl.org/humor/jordan_gates.html
Oh that’s the one I was thinking about! Thanks!!
I was sure your numbers were wrong but if we assume $200,000 in your sleep means $600,000 a day, that’s $219,000,000 per year.
Bezos has an estimated 220,000,000,000 dollars as of May 2025. $220,000,000,000 per year / $219,000,000 per year = 1004.6 years. Wild.
Let's have some fun. $600,000/per day, with an annual investment return of 7%, reaches $220b in 64 years, not 1004.
There appears to be an unspoken normative view being asserted throughout the thread that people who do not invest their money and take advantage of compounding should achieve outcomes comparable to those who do invest their money and take advantage of compounding, essentially idealizing the elimination of the opportunity cost of not strategically deploying capital, discounting the benefits accrued to those who can do the math and choose to act upon it rationally, and privileging the act of spending all disposable income on nonproductive ends. I suspect a nonzero amount of motivated reasoning is at play on behalf of those who choose to spend disposable income nonproductively on depreciating liabilities rather than assets; this seems closely psychologically related to regretting self-failure to optimize for long-term economic outcomes that is directed back as spite at those who successfully optimize for long-term economic outcomes.
The point is that you can’t catch up, even making more money than you could ever reasonably hope to earn. If you had $220,000,000, you can catch up to Bezos in 60 some-odd years; but by then he will also have been compounding at 7% per annum, and will have north of $19,000,000,000,000, which is around 2/3rds of America’s GDP today. Of course, Jeff Bezos will be dead in 60 years, but this leads us to the core of the debate: What did Jeff Bezos’ children do that would warrant their wealth?
> The point is that you can’t catch up
That's not the point at all. You cannot catch up with anyone who is ahead of you and you follow the same investment protocol.
> What did Jeff Bezos’ children do that would warrant their wealth?
Allow me to reframe. Why should anyone else get it? It's Bezos' money and he can distribute it as he sees fit.
I don't need to catch up or get anywhere remotely close to Bezos be financially satiated. If tens of millions of people can achieve financial independence, comfort, and safety, without the privileged upbringing, essentially just through the decision to strategically navigate life with financial independence as a goal, rather than social conformity as a goal, why does it matter if others have more?
7% annual compounding is a decent floor, but it's an iron law that sophisticated investors can't outperform. AMZN is has certainly compounded much faster than 7% per year over the last two decades, and access to that investment was democratized the entire time.
Wealth isn't morality, being wealthy isn't a sin, and wealthy people's offspring have no burden of justification to "deserve" their wealth.
Insisting otherwise is a direct attack on the fundamental right to private property that underpins western civilization.
When the US government provides the same equal protection to all citizens, including those who contribute nothing but violence and suffering to everyone around them at the expense of taxpayers, what horrific atrocity are Jeff Bezos' children of that warrants confiscation of millions or billions of lawfully and voluntarily acquired wealth?
I'd like to emphasize that anyone could have invested their $ into AMZN at any point since the IPO, and would have reaped very handsome returns.
Those who didn't have no justification to complain about it.
I'm rather angry with myself for not investing in Nvidia.
> I don't need to catch up or get anywhere remotely close to Bezos be financially satiated.
No one does. The issue comes when they start using that money to acquire political power. He wasn’t joking about seeing your margin as his opportunity.
> Insisting otherwise is a direct attack on the fundamental right to private property that underpins western civilization.
Western civilization includes a history of taxation, expropriation, and probate fees. No amount of libertarian revisionism will change this.
Intuitively it makes sense that someone that owns a bunch of assets will have tons more money than a performer?
I think the sportsman case is actually harder to accept for most people - “how can someone that ‘just’ kicks a ball around earn $200k sleeping?!”
What is crazy is that they probably pay less taxes (percentage wise) than you and me. If they pay any taxes.
Warren Buffet was famously quoted saying it was otrageous' his Secretary Pays 2x's his Tax rate.
https://finance.yahoo.com/news/billionaire-warren-buffett-ca...
> Then realize they would need to earn that much for 800 years to have as much money as Jeff Bezos.
If they would invest the money, they would accrue exponentially more money. Most seem to just spend the money on silly stuff, and wind up with nothing (according to an ESPN documentary on it).
$1 billion dollars looks like $20-$35 million dollars a year of indefinite spending, inflation adjusting, depending on the exact form of the billion dollars and the tax rates involved.
So, spending 100% of the after tax income of like 75 (well paid!) staff engineers at a big tech company in CA, but without having any job.
I always thought one of the biggest problems with modern education is not spending enough time teaching people about interest rates/return on investment. If everyone just understood what you're pointing out here--just really "got it"--I feel like the world would be in a much better place. It's not dire (I don't think?), and I know we've come a very long way, but, man, it could be so much better.
Maybe. A lot of these calculations are usually based on historical averages for the US stock market. For the economy to keep moving, they need people to spend their money.
Eventually it may all even out, where people spend so much once they hit a certain point in their life/portfolio, that it allows for everyone else to be saving and investing everything in the first few decades of life. But a transition period where everyone stops their mindless consumerism would be rough on markets. Sales of “wants” would collapse and the stocks would fall right with them. At least that’s my theory.
I also often wonder if the stock performance we’ve seen is simply a result of the way the population has grown. If we are seeing slowing growth, or even population decline, can we expect the markets to contract right a long with the population. What will that mean for everyone’s retirement accounts?
Except for some extremists, I don't think the advice is to save and invest everything. Instead, you should try to be saving and investing a meaningful amount of your income.
I appreciate what you're saying here, all of it, and wonder some of the same, but my comment was likely overly cryptic because I didn't mean anything about consumption.
> . If we are seeing slowing growth, or even population decline, can we expect the markets to contract right a long with the population. What will that mean for everyone’s retirement accounts?
Shit, the bigger scarier one is housing and ss. A huge percentage of people's retirement is either directly in housing (i.e. their house is their only asset), or indirectly in housing via their (mbs or other mortgage related bond products). If population declines housing prices may crater, and if population declines ss payouts may also crater. Gonna be a rough period of time (decades?).
I have this theory that a big driver of the lack of housing, and the resulting high prices, is due to the lower rates of marriage. More single occupancy homes means more homes are required. This goes hand in hand with a declining birth rate. So this breakdown in the family structure could be at least partially responsible for both the rise and collapse of housing prices. That’s kind of interesting.
Where does this return on investment come from? From people working. It's not possible for everyone to live on investments, someone has to do the actual work. Imagine if everyone started investing most of their money now, and after a generation or two everyone had enough capital to live on the interest alone. Who would do the work? I think we would benefit more from letting a larger part of the returns that work creates go to the people who do the work, not to the people that happen to have a lot of capital.
It seems like that in every country. If you think about it, if you are rich, it doesn't really make sense to want other people to know about compounding. They might not signup for this insurance, or credit card, or spend the money onto the latest gadgets.
> If everyone just understood what you're pointing out here--just really "got it"--I feel like the world would be in a much better place. It's not dire (I don't think?),
Maybe, but it also is predicated on a market like today's market, where the average American saves approximately zero dollars and has to work until social security.
If everyone saved a lot, you'd get a different situation. Probably a better situation, but it'd definitely be different.
The average American might be able to save more and work fewer years if the average American didn't make the economically self-harming and unnecessary average spending decisions that average Americans make on social status signifiers, luxury goods, depreciating liabilities, etc.
Right, exactly. And that consumerism is no small part of what fuels stock growth. If that disappears, then paradoxically your investments won't get you as far.
59% of Americans can't cover an emergency expense of $1000. Economically disadvantaged people developing emergency funds and basic financial solvency is not going to destroy consumer spending.
Further, consided that the top 10% are responsible for half of all consumer spending, and the bottom 50% combined control just 2.5% of all assets. The bottom 60% ceasimg all spending would barely even move the needle, they're insignificant in the macro picture.
You are also making assumptions about my portfolio makeup, chiefly regarding long exposure to US equities that are primarily or substantially beneficiaries of consumer spending. This is not true for me personally, and moreover, there is plenty of money to be made in markets with or without tiny consumer spending blips.
I like this work exploring magnitude. The Eames film does this explicitly, “Powers of Ten” (1977)
A happy find is an exhibition catalogue on the theme of the numinous pre- and post-photography:
Clair, Jean. Cosmos from Goya to De Chirico, from Friedrich to Kiefer: art in pursuit of the infinite (2000)
https://youtu.be/0fKBhvDjuy0
https://openlibrary.org/works/OL19133047W/Cosmos?edition=key...
Tom Scott did a video on this, "A Million Dollars vs A Billion Dollars, Visualized: A Road Trip":
* https://www.youtube.com/watch?v=8YUWDrLazCg
The length of one million USD is about the distance of a US football field or UK football pitch (which he demonstrates walking in a parking lot).
The length of one billion USD is driving over an hour at a speed of 100 kph (55 mph), the rest of the video.
1 million seconds -> 11.5 days
1 billion seconds -> 31.5 years
As somebody, maybe Sagan, said, pi seconds is approximately a nanocentury.
This fact is also present in 'Back of the Envelope' chapter in Programming Pearls by Jon Bentley!
A cube of 100 dollar bills four feet on a side is about 160M dollars. So, six of them.
This made me do a search on the missing Iraqi billions, as I remember there were details at the time how it was packaged in pallets and flown into the country. Couldn't find that, but according to The Guardian [0]:
> Over the first 14 months of the occupation, 363 tonnes of new $100 bills were shipped in - $12bn, in cash.
[0] https://www.theguardian.com/world/2006/mar/20/usa.iraq
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Surprisingly portable. I can see why the Treasury doesn't want to print larger denomination bills
Actually, a billion dollars look like a ten digit number at the bottom of a spreadsheet.
This would fit in a standard cargo van, but the weight would crush it.
This visualization is wildly inaccurate. The supposed 1000 pixels are actually 100x100 pixels, which is 10,000 not 1000. Secondly, on many screens they are not actually pixels. For example, on a macbook pro you're likely seeing 40,000 pixels in actuality.
This visualization worked for me: https://www.celebritynetworth.com/articles/entertainment-art...
$1 million in $100 bills can be -tightly- packed into a standard briefcase.
$1 billion in $100 bills is ten 4-foot high pallets.
$1 trillion, 10000 of those pallets, covers a US football-field sized area.
"The average American household spent $87,432 in 2021." That number seems awfully high to me? That's more than I am seeing the average household makes in 2023.
Can’t let silly things like income limit your spending!
For a real answer, I’d assume retired people earn 0 but still spend? So that could change the math
You just discovered the difference between average and median :-)
For the average, Jeff bezos is pulling it up.
Klarna sends its regards.
It looks like 4 (I think we're up to $250M TC now?) AI engineers at Meta.
Am I the only one who was expecting to see a picture of literally $1B in cash?
No
The second box is 10,000 pixels (100x100). Not 1,000 pixels (31x31)
Now consider we accrue about $3 billion per day in interest on our national debt.
(I originally posted $300 billion which is a number I heard recently but then realized that couldn't be right).
> To earn $1,000,000,000 you'd have to work more than 1,379 lifetimes!
Reminds "Something for Nothing" by Sheckley.
thats depressing
Yeah, mining stone for someone's "free" palace for who knows how many lifetimes is no fun.
When I try to zoom in (by pinching the touchpad) on one of the charts at the bottom of the site, Firefox crashes. I guess there are too many pixels in the black bar :)
MacBook M1 Pro, 32GB RAM, Firefox 141.0
This is a good reference for the next time yet another security company goes for $XX,000,000,000 and the buyer says "because that's how much they're worth"
It's all bullshit valuation after $500,000,000.
Reminds me of this gem: https://eattherichtextformat.github.io/1-pixel-wealth/
Now stack them into cubes and it looks way smaller.
It's really unintuitive how a mere increase in number of dimensions could totally change the scale of things. This is the crux of the curse of dimensionality in machine learning. If you simply stacked it high, it may almost reach the sun (but no quite), but once you lay it into roughly a square (20000 x 50000), it spans only over a mile per side. To lay it roughly into a cube of 100 dollar stacks, you'd have something like 65 x 150 x 1026, which turns out to be about only 12 yards per side.
EDIT: I screwed up in the 1D calculation. A 10 million-height stack of 100 100$ bills only reaches 67 miles.
The world has about 3000 US$ billionaires.
When you understand the extreme inequality; that most people don't have $100K and some people have billions, and you understand how the monetary system works to compound the billions, it puts into perspective how the system functions.
If the system seems like it's about 'value creation' it's only because billionaires let it be that way. With that kind of money, you can probably run the whole system however you want.
That kind of money cannot buy that many goods and services without causing hyperinflation... What can that money be used for? Business asset acquisitions, luxury real estate, fine art and political manipulations... Either way they're getting marginal benefits out of it; the asset valuations are likely inflated by billionaires' own wealth competing against one another. Ultimately, once that level of wealth is reached, the whole market becomes about political influence... And even this can cause inflation; but this kind of inflation can be offset by oppression; you can use money to incentivize people to control each other in a hierarchy.
In such society, as a regular person, you need to pick a billionaire tribe because the money flows top-down. If you're not in any billionaire tribe, what will happen is everyone else who is will be getting paid but you won't be getting paid. This is sad because the truth (about various things) is often a middle-ground between different billionaire perspectives or sometimes it's diametrically opposed to any billionaire's perspective. It's already a kind of monarchy, fueled by fiat money creation.
> consider the individual buying power of a billionaire
This is what I never understand about posts like this. The buying power of an individual for their own selfish purposes becomes meaningless at a surprisingly low number. One billion cannot even be spent as one or a few transactions.
How much does a sports franchise cost? A newly constructed high-rise? A private island? A contract for a ~~private army~~ security force? A bribe?
None of those things are a strictly personal purchase.
Almost all of those are part of running a business. In the case of bribes, nobody would ever go along with it if it was only one person impacted.
I don’t think anyone has a billion dollars cash in their bank accounts. Is mostly valuation and likely what billionaires keep in cash is 5 million
Now add the US debt!
If you're looking at a billion dollars you're looking at all kinds of debt, including US bonds. Much of what gives money value is the existence of debt (another thing is the obligation of taxation). Always has been, which is why trying to tie currencies to values of commodities or precious metals has always collapsed eventually...
It is likely more than just coincidence that the wealth gap increased so much as soon as we went off the gold standard in the 70s.
Might’ve been worth it if we all are ultimately wealthier than we would’ve been, but also easy to think it just become a way for the rich to soak the middle class with a hidden tax, that the proletariat applauds and votes in favor of with only short term thinking.
We get that middle class to be much less than 50% of the populace, as long as they give us EBT, and some money for healthcare and maybe once the mega corporations own most the property they give us some box to call shelter, the entire middle class will just become be good little subservient serfs, happy that our noble lords take so good care of us.
Presenter: "With a million dollars, you can own a nice home."
Presenter: "With two million dollars, you can own two nice homes."
Presenter: "With three mil--"
Audience: "Wait, who owns two nice homes, when so many people don't have any? Why is that even legal?"
Presenter: "Please, no interruptions; I have a lot more counting to do."
In my neighborhood a million dollars would have a nice home, and 3 rental properties, for a total of 4 homes.
Four houses. You have one home. The rest are just houses.
Do people live in them? Then they're homes.
To them not to you.
In Australia, a million dollars (US or AUD, doesn't matter) is a deposit on a nice home.
My former boss just sold his business and become a multi-millionaire. He'll have to go back into the workforce to be able to afford a decent -- but not palatial -- home in a nice suburb.
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I find this visualization pretty useless. What I would appreciate is putting billion of dollars in terms of actual property you could buy with it, something like:
- This is a house (or palace rather) that you could buy for $1B
- This is an oceanic yacht of the same value
- This is a shopping mall which did cost about $1B to build
- This is an oil refinery that recently sold for $1B
- This is how many US senators you can bribe, and how many favorable bills you can push through Congress /s
etc.
There’s a xkcd for that: https://xkcd.com/980/
It’s a little old so inflation is a factor, but still really good intuition
as useless as you say the visualization is, so is property comparison because what does "$1B worth of real estate" even mean?
Raw materials + labor + debt financing + geographical point-in-time land value? It'd be easier to intuit these vs look at some nice pixels?
Did you actually scroll to the bottom or got bored while scrolling and scrolling and scrolling on the big black box running "top to bottom"?
The whole thing is about perspective. The big black box is just the start.
I find it much more enlightening to think about all the pixels I had to scroll past, then seeing the same thing represented by a big and then small black circle and put it in perspective with things like people working minimum wage all their lives all the way up to the Bezos and Musks of the world.
Those relative sizes feel immediately "relatable" even though they're "just numbers".
On the other hand I find your examples (no offense intended) lack that.
This is very area specific. I can buy the same house / palace for way less than a billion in one place vs. another. From a quick Google, most super yachts "in that price range" cost less than 0.5 billion. Not that this makes it any more relatable. Seems like the house thing above :shrug: Refineries always just look huge to me. Whether they cost $1B or $100,000,000 I really couldn't tell you. It's just a huge place of tubes and stuff. I have no frame of reference so to speak. Lacking frame of reference as well, though yeah, the /s was worth thinking about this one. Maybe the original site could represent this as a number or relatively sized circles. "This is how many bills you could buy with this in 1975 vs. 2000 vs. 2025" /sBut then it'd really be about inflation instead of perspective.