Nobody earns a billion dollars
Nobody earns a billion dollars
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Most of this wealth is in stocks, though. Their worth is based on the number of shares they own of these companies. For every share they sell the value of the other shares drops a bit. So if Musk or Bezos sold all their shares, to have this money in actual cash, not only would they probably bankrupt their company and crash the stock market, but the cash they got out of it would be only a fraction of what this shows on paper now.
You do a structured sale overtime and those do take place even in the billions of dollars without destroying the value of the stock. Also, they can borrow against the value of the stock, usually for extremely low interest rates, to quickly infuse cash. This argument is nonsense. The best recent example is elon buying Twitter. Yes it hurt tesla stock in the short term but it is almost back to the presale value with little impact on his overall networth. The wealth in stocks is very real.
Edit: The elon case isn't even a good example because he was forced to sell the stock much faster than normal.
Also it's not like most people's wealth (if they even have any) is liquid either. Most is probably tied up in retirement accounts, real estate, or funds for unforseen circumstances that you wouldn't touch for ordinary needs.
Elon buying Twitter is really an outlier to begin with, since otherwise there are basically no single expenses that would require that amount of funds to be liquid.
Especially with the mentioned loans, there really is more than enough liquidity available to buy anything you'd ever want.
“But billionaires’ cash isn’t liquid! They can’t access it until they need $44b to buy a social media company!”
The one good thing about Elon Musk is how he disproves the myths of capitalism like this and meritocracy.
For almost any company shares could hit $0 with no impact to day to day operations (until the shareholders revolted and demand action). The only effect of the share price on a company is that it would be a factor if they wanted to sell new shares of stock to raise funds, which virtually no company ever does. The share price is only important to the people gambling on it.
I’m not sure how to edit comments so I’m adding this… I agree with the sentiment and how insanely low the minimum wage is. But these billionaires don’t actually have the amount of money most people believe they have. Functionally, it’s nowhere close.
They do - this is a common misconception. If they have 1b, that means that any bank will loan them 1b, which they will use to purchase more businesses and then they have 2b so it means they can take out a loan of 2b - pay previous debt and purchase something else. Rinse repeat.
Of course this is an oversimplification - but having millions in stock is as good as having it in the bank.
Not just what they have but more than what they have in assets.
They still treat that money as a real value though. Musk put up a shit ton of Tesla shares to cover the Twitter buy. I think I understand that you mean the big numbers should be slightly smaller big numbers but if they are wielded and function at those levels then that's kinda the same thing.
This is a good point as well that gets left out. If you can take out loans against that wealth and spend that, how is that functionally different than having the money yourself in the first place?
@133arc585 @MobileSuitBagera I suppose "functionally" it about liquid assets vs fixed assets. One can borrow against their house in order to get cash in hand.
Right, their use of "functional" is wrong. It is functionally the same, because it serves the same function; it is not technically the same, but it is functionally the same.
I don't want to put words in your mouth, but are you saying that the workers who built these companies shouldn't be compensated through stock for their contributions? I've just heard your argument a lot and I think, OK, if they don't really control that much wealth, why not spread it around. They wouldn't be losing anything, or not much of value. Really need to have a tax on wealth, above a certain level, in my opinion at least.
Oh, and on the web version of Lemmy, there should be an
editbutton at the bottom of your post.Ah thank you, I’m testing out an app and it must not be built in yet.
And these folks should totally share their share of the company value with employees! I think that’s excellent compensation because it helps everyone it’s given to. Those that need money now can sell and have cash, those that don’t can save it for a rainy day/retirement. These billionaires should NOT have this level of value to their name. They deserve more money than anyone else in the company gets, because they’ve worked their way to the top, but like… not a fraction of what they actually receive.
They deserve more money than anyone else in the company gets, because they’ve worked their way to the top
This is fallacious. Their status is not generally a product of their hard work and dedication. It's often the product of a mix of luck, nepotism, screwing people over on your way up, lying, and other ethically questionable activities. I'm not saying that they have done literally zero work to get to where they are, but not only do I not consider what they did productive or beneficial to anyone in any way, but if they left their morals at the door in order to make that climb, there's nothing about them or the situation to be respected.
Then you have to consider the ethics of allocating money: the marginal benefit of $1 to a billionaire is figuratively infinitely less than the marginal benefit of $1 to someone in poverty. If the purpose of wealth is to better one's life, and not solely to be amassed, then there is no need for the billionaire to get anything more.
From each according to his ability, to each according to his needs. (Karl Marx, 1875, Critique of the Gotha Programme)
If those numbers are even 1% in reality, they're still in possession of more money than you and your entire bloodline will ever see. You say Bezos doesn't have 149billion, so let's say he only has 1.5 billion, does that immediately make him wealthier than any man ever should?
But these billionaires don’t actually have the amount of money most people believe they have. Functionally, it’s nowhere close.
What do you mean by this?
If you have $10 billion is STOCKS (which is what ALL of these billionaires have, NOT cash)… then even if you sell your stocks you’ll end up with WAY less because of how the stock market works. Also taxes.
Let's say you only get 10% of the value, which is a massive stretch. What's 10% of $10 billion? $1 billion. That is still an absolutely insane amount of wealth.
The point "they don't have as much as you think" is meaningless, because the amount they do have is still exceptional. There's no functional difference past a certain threshold.
No, no, you borrow against it, so that you don't lower your asset's value.
"Most of this wealth is in stocks".
This argument has to be one of the worst, most ridiculous ones ever.
First of all, nobody would ever buy, sell or hold stock if it wasn't valuable.
Secondly, stock is directly and indirectly valuable. Aside from directly selling it, some companies provide dividends. People who own lots of stock can make a lot of money just from dividends. Also, they can use that as collateral and borrow from banks at good interest rates and live off of that.
My company gives us stock grants as bonuses. I'm paying a ton of money to remodel my house and the vast majority has come from cashing in stock. If me, with my modest stock grants, can cash in a few years worth of stock bonuses and basically pay to rebuild my house, these guys with assets in the 100's of billions can live off the interest of a few sales. They can borrow against their wealth. It's so awful and disingenuous to imply that they're not hoarding wealth because "most of it is stock".
If it's so worthless, give all of their options to their workers!