> 1 billion isn't a thousand times a million.
replyWhat?
The point they were trying to make was that if you take appreciation of assets into account, if your billion is appreciating by a relatively modest 5% per year, you are passively earning 50 million/year. Whereas someone with one million passively earns 50 thousand/year. One is enough to live in luxury anywhere in the world for several lifetimes, the other is enough to live comfortably in some parts of the US (or like a king in many parts of the world) but not enough to throw 6 figures at a programming language foundation for fun.
replyOr to take an intermediate value, $10 million is 500k a year and most people will find it difficult to spend that much on themselves, so it’s going to grow on its own and compound. It will grow more rapidly if some is invested in the stock market.
replyAlso, donating appreciated stock avoids taxes. This donation may have come out of a donor-advised fund.
Rich people can make substantial charitable donations rather easily and make a big difference. I suggest we encourage them.
Thanks, that is much clearer than my wording.
replyPerhaps he was making a subtle point about liquidity.
replyAh there is liquidity too, but your brother comment makes my point clearer.
replyAbout liquidity, yes most people with a million net worth actually have more than half in their house, so technically it is much harder for them to throw cash than somebody with a billion and a much smaller % of their worth in illiquid assets such as property or unlisted companies. I wish I had made this point too.
I don't know man, maybe read the rest of the comment? Are you serious?
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