It is much easier being a one percenter today than before

One Percenter
As a prelude, in no way do I hate the top 1% or even the top 0.1% in any way. As a matter of fact, I personally strive to become a 1%.

In the old days…

In the old days, a person’s net worth is reflected publicly, for the most part. What I mean is that a wealthy duke or viscount would own several thousand acres of land, a big castle, and an army of soldiers. It is all there for the average peasant like you and I to see. When things go out of hand, like in France in 1800s, when Louise XVI lived in his extravagant castle and ate lavishly while every other Frenchmen starved, then revolutions occur.

If you are a peasant living here,
Medieval Shack

and the next door neighbor lives here,
Fancy Castle

you aren’t going to be very happy.

A couple of co-workers were talking about the company founder and estimated he is worth north of a billion dollars. They said things like, “Yeah, he is set for life!” But what really hit me was that none of us actually realized the value of a billion dollars.

Today, many billionaires live extremely frugally (Warren Buffet, Mark Zuckerberg), that it becomes really hard to gauge one’s net worth simply by seeing them.

Just how much is a billion dollars?

In 2014, Twitter (NYSE:TWTR 14.67) IPO’d with a total market cap of $20+ billion dollars. Bill Gates’ wealth ballooned back into the top charts with a staggering $70+ billion dollars (mostly due to NYSE:MSFT 68.005 gaining in share price). But just how much is even 1 billion dollars?

Today, with the rise of internet banking, crypto currencies, virtual currencies, we tend to think of money in NUMBERS. That’s makes it really hard to actually evaluate how much something is really worth.

Let’s put this into perspective:

Here is a million dollars: $1,000,000, Right? It is a 7 figure number

Here is a billion dollars: $1,000,000,000. Ok, it is a 10 figure number.

On screen, compared side by side, it doesn’t seem like it’s THAT different. Sure, a billion dollars does indeed have a couple of more zeroes. However, in reality, it couldn’t be further from the truth.

A billion dollars is essentially a thousand times more than a million dollars.

If you are a millionaire and bought a million dollar home, a billionaire could buy out the entire neighborhood around you and still have enough money left over for a couple of airplanes or jet-skis.

If you, the millionaire, is worth just $1, the billionaire is worth $1,000.

Posted in Investment Philosophy. Tagged with .

Leave a Reply

Your email address will not be published. Required fields are marked *