Monday, March 15, 2010

Go Figure


I hear Bill Gates lost $18 billion in the recent crisis. Warren Buffett is down $25 billion. Over 300 of the world's billionaires slipped off the list entirely and are now merely multi-millionaires.

I'm all choked up about it.

Oh, the poor, poor billionaires. Shall we take up a collection? Bill Gates is down to his last $40 billion. Boo hoo. Maybe a little tax cut will cheer him up.

To hell with them all.

First, all their so-called losses are only on paper. That hill of paper once "worth" $60 billion is now "worth" only 40. Too bad. That's supposed to happen sometimes in the market that these folks say they love so much.

Second, these numbers get tossed around so much, a billion here, a trillion there, we forget they have real meaning. Here's a little perspective:

Let's say, on the day you were born, you inherited $1 billion. That's $1,000,000,000. Looks pretty good to see all those zeros, huh? To continue, let's further assume that you will never acquire another penny in your life. Not too likely, I know. After that first billion, I hear the rest is gravy. $1 billion at one percent interest for one year will net you around $10 million easy. But let's keep things simple.

We'll let you live to be 100, a generous estimate, but people do actually live to be 100. Besides, this will keep those numbers nice and round. In 100 years, we'll allow for 25 leap years. So you will live exactly 36,525 days. Not bad.

OK, before we do some real figuring, you could say this: if you spent $1 million every year of your life, you'd have $900 million left to bequeath to your descendants, if any. Pretty good.

But let's say you really want to spend it all, every penny. How would that break down? Well, if you wanted to spend $1 billion in exactly 36,525 days, you would need to spend $27,378.51 each day of your life. Every. Single. Day. That's a lot of polo ponies.

Now imagine 20 times that. Now 40.

Let's leave aside, for the moment, that most of the super-rich get that way and stay that way through what amounts to legalized theft. A paltry million can buy a lot of good government these days. Let's leave aside the corporate and personal shell-games open to these folks: those Swiss bank accounts and the like. Let's forget all those bailouts that helped protect their "investments." Let's even forget that a quarter of the world's population, 1.4 billion people (there's that number again), live below the international poverty line of $1.25/day.

Actually, let's remember that last point.

Remind me again why these folks shouldn't pay some serious taxes. What if we taxed these people right down to their last couple billion. What would happen? Why, poor, poor Bill Gates would have to live like Paul McCartney. How tragic. Boo hoo.

So the next time you see that pesky $1 billion, remember: $27,000 every day for 100 years. That's how much $1 billion is.

Go figure.

Very Truly Yours,




Suldog said...

Amazing, isn't it?

I've had a theoretical argument with MY WIFE. I say if I hit a lottery for ONE million, we could retire, easily. She thinks not. I say, "We'll buy a house for $300,000 - then use $200,000 for our living expenses for five years. Meanwhile, we farm out the remaining half million at a modest 5% interest, and after the five years are up, we start living on that interest. I guarantee by the time we die, we wouldn't have run through the principal."

Be that as it may, that's ONE MILLION. A Billion? Ye Gods. Why on earth would you possibly need more than that?

Ananda girl said...

Goodness! I don't even make that much in a year. The irony of course is that all I want from life is modest comfort... to be able to pay my bills on time, have health care when I need it, a safe place to live, reliable transportation and enough food to sustain myself.

I don't feel sorry for them at all.
In fact, I find them a bit obscene.

Sniffles and Smiles said...

Wow! Any ideas about how to earn a billion? I could get used to that very easily! ;-) Hugs, Janine

Cricket said...

Janine - The first and most important step in becoming a billionaire is to choose your ancestors carefully. The condition is often inherited. If your parents and grandparents were obscenely wealthy, there is a statistically significant chance that you will be obscenely wealthy too.

Failure at this crucial point has been fatal to many aspiring billionaires.

At a bare minimum, one should choose to be born into the upper 5% income bracket.

Further instructions can be purchased for the bargain price of $1,000,000 + S & H. Supplies are limited. Act now!

lime said...

i have this argument with my husband all the time. he carries on about how higher taxes on the wealthy discourages them from creating businesses which create jobs, yada yada. and yes, i understand the argument. but those kind of numbers you throw around compared to the poverty in the world. sorry, to whom much is given much is required. though this is in no way a grand endorsement of the government's ability to manage whatever taxes it collects in a responsible manner.

Cricket said...

Hi Lime! Well, maybe they would create jobs, maybe they wouldn't. We may never know.

Of course, they have created lots of jobs lately. Too bad they were all in Southeast Asia. There's the global economy, right there. Let an American worker compete directly with a 12 year-old Malaysian girl who works a 14 hour day chained to a sewing machine for $1/day.

And we get to subsidize this, as well.

Who's got the pitchforks?

Land of shimp said...

Don't forget the torches :-)

That really is an obscene amount of money to amass, and a great deal of good could be done with it.

Having a well developed conscience tends to be a deterrent in amassing that kind of wealth. I remember the movie about Gates and Jobs, years ago, and Gates buying DOS from some programmers for something like 40k.

I'll bet they take his name in vain every day, all day. That's one of the things I find stunning about Gates, at least Jobs was working with his own gifts. Gates just had big brass ones, and I will admit, he also has guts galore.

Funnily enough, I don't envy him or any of the super wealthy. I don't even despise them. I'm just grateful that I never found that sort of ethical flexibility that leads to that kind of wealth.

If you stop short of being willing to break another man, or cheat him, then wealth is not likely to be your lot in life.

Some of the fabulously wealthy do all sorts of philanthropic work, and Gates does too...but I always think of the DOS programmers. At the time they were well paid for a system they didn't quite know what to do with, and Gates had "vision" but part of that vision really involved being willing to stick it to someone else.

I sometimes wonder if his more altruistic endeavors have to do with an attempt to buy back his soul.

Dave said...

They say money isn't everything, but it certainly helps. - Dave