Katy Perry’s wealth is based solely on her actual personal performance and work.
And a societally-granted monopoly on recordings of that work, to the end of time - at least at present, since they always extend copyright before anything ever comes to the public.
The whole point of money is that such value-over-time can be used immediately; Katy Perry is much richer because people with money know she has an income stream that actually goes beyond her lifespan.
Katy has that money because people have it to spend; she could sing as prettily as she pleases in Jamaica - and believe me, Jamaica has some amazing musicians of its own, so this is experimentally verified - but she would live in a small house indeed if she had only countries with Jamaican-sized incomes to go to her concerts; she’d have to drop the seat price to $9.95.
People who become wealthy purveying small luxuries are the largest beneficiaries of a society with only small inequalities.
Rockafeller’s ~$900M fortune in 1913 would be a bit over ~$23B today, inflation-adjusted.
However, note that in 1913 that fortune was equal to about 2% of US GDP. Today Gates’ fortune is about 0.5% of GDP. I suspect that means Rockafeller’s fortune had, in some sense, more society-distorting power than Gates’ has today. I mention this because 1) I think there are many relevant metrics for different purposes here, and 2) society gets wealthier over time in part as a side effect of individuals and companies acquiring these crazy fortunes.
Investment novice here; if I can borrow at 3.5% and get a return of 5% on that, isn’t that a net positive (assuming it all goes in to the 5% and not using some of it to pay debt or daily expenses)?
The issue here is the idea of comparing real estate borrowing as an investment to an asset class investment (stocks, bonds, mutual funds, etc).
The price of your home could rise and you could make money on that; however, if you borrowed 80% of the value and then began paying a fixed guaranteed interest this goes into your losses on the property. Buying and selling for profit is really about turn key real estate…or house flipping.
Alternatively putting money into various dollar based investments are not fixed or guaranteed (with some notable exceptions like a CD for example).
SO. you buy the house for $20m. You put $4m down and finance the rest…you are now paying 3.5% on the $16m…no matter what happens to the value of your home. You take the other $16m you did have and invest it in the market but have no guarantee that it will make money and you are in fact likely to lose money. So if you do grow that $16m by 5 % over 10 years, and your home does appreciate by 10% over 10 years…yes you were better off.
That is a great bet if you have only the $20m to begin with but do have steady and high income to afford the cost of living and maintenance of that home. But if you have way more than that (like in Perry’s case)…the safer and better option is purchase it outright. You have (what for her is nominal) upkeep costs in insurance and taxes and such. She has plenty of liquid capital to invest in the market independently of the home.
POINT BLANK: having no debt on major assets like homes or cars is better than carrying debt on them.
Simplify this down…if you had $10,000 suddenly…you think it is better to blow $8000 at the casino and pay off $2000 of debt? or pay off $10,000 of debt and then budget a few hundred from your next paycheck to have a little fun gambling?
Yes mathematically 5 > 3.5 but with both sides of the equation able to drop in value for any or no reason, it’s a more nuanced situation. As a non-rich I never really had a question on what I would do lol.
Not so much “stupidly” wealthy as “criminally” wealthy. At some point, great wealth is incompatible with democracy. And while democracy is far from perfect, it’s much less likely to get you murdered by the state than fascism, oligarchy, or monarchy.
Not sure I understand the problem. If someone offers to sell something, be it widgets, entertainment, software, or service; and people agree to the price, why should the seller be villainized? Don’t want others to get rich, don’t buy their products/services. Invent your own solution to your needs and/or desires.
Anymore, no one wants to buy the seed, plow the field, plant the seed, harvest the crop, grind grain, knead the dough or pay the fuel for the oven. However, everyone wants a slice of the pie when it’s done. But you say, others are performing those tasks to make the rich rich. To which I say, “yes and they agreed to a specific paycheck for their services, and not a piece of the pie.”
Want more than payment for direct services? Then step up and invest in the infrastructure and risk like the company owners do to grow their business. Stop wishing for it and start WORKING for it!
And no, Im not wealthy. With 2 social security checks pension and investments, we make less than $75,000 a year, far less than the wealth tax would effect. But we’re thankful that even without college degrees, we’ve always been able to find jobs to keep us going. Over 70 and thankful for those who create the jobs.
The problem is that it is impossible to have anything approaching a democratic society when a tiny minority of people control more resources and influence than everyone else put together. The degree of wealth disparity in our society is unjust, unsustainable and obscene.
HINT: the billionaires aren’t the ones actually doing any of those things.
Please point to all the things that Bill Gates has actually made, with the skill of his hands. Then please add up the value of those things. Subtract $110B.
I’m afraid you have that backwards, friend. It’s not the labor of millionaires and billionaires that makes working-class jobs possible. It’s the labor of working-class people that makes millionaires and billionaires possible.
Completely by himself. No cofounder, no investors, no employees. He had no assistance whatsoever. He scratched out the code for DOS on clay tablets he mined in his back yard, with a stylus carved from a stick.
Oh, wait, not that at all:
Gates said that he personally reviewed and often rewrote every line of code that the company produced in its first five years.
(From the Wikipedia article)
So he did a lot, especially compared to almost all of the trust fund babies out there, but he had collaborators, he only did the work himself for half a decade, and he wrote code for an existing hardware platform and chipset.
