Originally published at: https://boingboing.net/2019/11/22/visualizing-just-how-stupidly.html
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“Katy Perry’s mansion” seems as appropriate a point as any to illustrate where individual wealth starts becoming ridiculous.
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Someone once pointed out to me that if his wealth were actually a result of the value of his labor, then the implied income would mean that if a $100 bill fell out of his pocket it would not be worth his time to bend over to pick it up.
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It seems strange to me that the infrastructure even exists to allow a single individual to have that many dollars. The number of people who need to go along with this farce, in order to make it real… this speaks to a high degree of self delusion.
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I remember seeing that making the rounds on the web a while back, found this with a quick search.
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But if the US introduced a 99% wealth tax, then Bill Gates would only have about $30,000 to spend.
Per day.
For the next 100 years.
Not counting interest income.
Have you commies even considered that? /s
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$55 million to fix pipes in Flint? Man, those rich guys could help thousands of people for a tiny portion of their fortune. But then that’s like paying for a ransom, after one rich guy bails out a city, all the other cities will come looking to them for help.
Maybe I’ll put “fix the pipes in Flint” on my Powerball wish list. Or better yet, maybe we could have a rich guy 50/50. Raise $110 million from a bunch of rich guys, put their names in a hat. One of them gets $55 million, and Flint gets the other $55 million.
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This is why Sanders version of “socialism” is the only moral way forward. A small tax on these very wealthy jokers won’t affect their lifestyle one bit, but could make a decent life for EVERYBODY ELSE. And most important freeing up brilliant people born into crappy circumstances to realize their potential. Benefit to society vastly outweighs tiny burden on excessively wealthy.
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To be fair though…Katy Perry’s wealth is based solely on her actual personal performance and work. Additionally we know full well that entertainers definitely have artificial caps on earnings. They run a foul of their fan base in any way…they stop selling records and people stop seeing their movies (see Mel Gibson on the later). Plus ageism in their fields can greatly impact earnings for them down the road. Lastly, that is the price of real estate that she has no control over…she is buying in a location that works for her vocation (entertainers buy in LA makes sense). She’s not realistically going to buy something in Montana for a quarter the price…she’d spend more than the difference in travel costs.
But your point holds in that we should ask the question is that home really worth that, or is it merely about “how much can we get for this”. Some people would argue those are the same thing…I would not.
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poor poor Bill.
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There’s a clip circulating that I can’t find at the moment where Bill Gates talks about being generally in favour of higher taxes on the super rich but then quips about a limit where it would be too much. There is absolutely no reason for any person to have $1B. None.
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Most celebrities don’t own their mansions; they put a down payment on them and use them as an investment, hoping to build equity and profit from the eventual sale. As wealthy as Katy Perry may be, she’s not going to tie up a significant portion of her cash holdings in something as volatile as housing.
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You have sources for this or this is your opinion?
I say this because I know for a fact Swift paid cash for her place here in RI. So while it is possible she is an outlier, I don’t know anyone who would if given the choice to buy in cash would not do so and instead pay an interest rate and borrow.
She is worth ~$120m. Buying this outright would be less than 20% of her actual net worth. Most people purchase a house well beyond that percentage of their nw.
It would be financially unwise for Perry to put down $3.8m and then finance $15.2m and have a mortgage payment of $80,000 each month. No good financial adviser would recommend that.
but if you have some actual sources for that being what she and other celebs do…by all means I am open to hearing more.
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Katy Perry isn’t the average extremely wealthy person if she paid cash for her home.
It’s simple economics for the wealthy. You want to live in a $20M home, so you put a relatively small amount of your available cash down and assume a mortgage of $18M at 3.5% interest. You then invest the $18M you didn’t sink into your residence at 5% or 6% average annual rate of return. Keep in mind that a person with over $500K to invest gets a much better rate of return with brokerage houses than the rest of us with $10K-$100K to invest.
You are now making 1.5% to 2.5% on your $18M over the lifetime of the mortgage instead of sinking the cash into your home and hoping for massive equity growth. If you do have increased equity, say the $20M home sells for $24M, you skim the $4M, regain the $2M you put down and pay off your lender with the rest of the proceeds.
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18 years in financial services, so I can say categorically…
but again, if you have sources and data as opposed to just your opinion, I will be happy to hear more. Otherwise, I will say good day.
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Yeah, it is exactly how it works. I’ve been buying and selling real estate for 3 decades, look after investments for one side of my family, and see what the other (extremely wealthy) side of my family do with their fortunes.
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Bill Gates likes puppies.
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I’m not even worth 110 dollars…
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Anybody know how this weath compares to to weath of the robber barons of the gilded age in constant dollars?
