How rich are rich people? How many of them are there? According to Forbes 2015 list of billionaires, very and not many. Rich is sensitive to context so perspective is required.
There are 1,826 billionaires in the world. One in about 38,000,000 people worldwide so very rare. In the United States there are about 1 out 5,700,000. Rare but less so. That perhaps exemplifies the difference in opportunity in the US.
The top 400 American billionaires have a total net worth of $2.34 trillion, for an average of $5.8 billion. That seems like a lot of money, but only in the context of an average person.
If we take a 40 hour working week there are 2080 hours. The federal government in the US spends almost $1.9 billion per hour. Should our average billionaire decide to give back his entire fortune, it would be gone before noon on the first day. If all decided to give up their wealth it would last until early afternoon on August 12th.
The group could pay about 13 cents on the dollar of federal debt, or buy out the federal government employees pension plan.
What I found interesting is that of the world’s billionaires, about 5 in 8 are self made. About 1 in 9 inherited their wealth and are no longer trying to earn more. About 1 in 4 inherited some of their wealth and are still building.
I think we all understand that world scale businesses require considerable capital. Someone must supply that and I suppose rich people are the most likely suspects to do so.
We must also notice that wealth is transient. The once relatively gigantic fortunes of John D. Rockefeller, Andrew Carnegie and Cornelius Vanderbilt have dissipated to tiny fractions of the total today. The Forbes 1918 rich list has 30 names. None had less than $50,000,000. None has a family that remains dominant.
Wealth and the power it engenders goes away as surely as physical skills. Fractioning and dissipation catch everyone. It is like athletes who lose their skills. Despite their earlier dominance, Arnold Palmer and Jack Nicklaus would have trouble qualifying for the PGA tour today. So with money. The Hunts and the Gettys, from only a few decades ago, while still wealthy do not run things.
We are mislead. The 1% argument is a false one because it presents no context. The Waltons own more wealth than the bottom 40%. What is more interesting is if your net worth is $1.00 you are richer than anyone in the bottom 25%. Further, in the bottom half more than twice as many people have inherited wealth compared to the rich.
Money politics is envy politics. Work towards having enough. What would the rest be for?
While I have not tried it, I am willing to believe that someone with just one billion can live as well as someone with ten billion.
When you think about it, that is what the money is for.
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.