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Billionaires amass more through inheritance than wealth creation, says UBS

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Re: Billionaires amass more through inheritance than wealth creation, says UBS

#31

Post by Zambyte »

tylersmith wrote: post #15
SketchySeaBeast wrote: post #7

Earlier quoted context omitted.

Assuming we're not talking "I have a retirement plan and a house so my net-worth is over a million" type of millionaire, isn't passing oneself off as a multi-millionaire instead of a billionaire a distinction without a difference? I guess I don't run in those circles, but it's still fabulous wealth either way.

It's the difference between someone having $2k and $1 million dollars.

I think with the "distinction without a difference" bit they meant that if you look like you have $2k instead of looking like you have $1m, what is the difference in your life than just having $2k?

The answer to that is: you have $1m of peace of mind to live your comfortable lifestyle of someone with $2k. Now living the lifestyle of someone woth $2k might not be particularly desirable to most, but living the life of a multi-millionaire with that relatively same level of peace of mind sounds like a crazy nice way to live.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#32

Post by yboris »

hilux wrote: post #9
raincom wrote: post #6

There are more secret billionaires, who don't appear on the billionaires list. I know of two such billionaires. One is super, super secretive, who passes off as a multi millionaire. There are special trusts that billionaires make use of. Treat a trust like a corporation, with its own independent existence. Such trusts can be set up for multiple generations: these trusts (corporations) are run by professionals, while…

For more on this, which I really don't recommend, google "South Dakota Dynasty Trust."

> "Dynasty trusts can be created in South Dakota for families who do not live in the state. South Dakota allows trusts to continue in perpetuity, avoiding federal transfer taxes for generations. The state does not impose any form of taxation (income, dividend interest, capital gains) on these trust assets."

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#36

Post by piva00 »

hilux wrote: post #13
triceratops wrote: post #12

Earlier quoted context omitted.

Why don't you recommend it?

Because it's depressing.

You weren't lying.

> When Citibank based its credit card business in Sioux Falls, it could charge borrowers any interest rate it liked, and credit cards could become profitable. Thanks to Janklow, Citibank and other major companies came to South Dakota to dodge the restrictions imposed by the other 49 states. And so followed the explosion in consumer finance that has transformed the US and the world. Thanks to Janklow, South Dakota has a financial services industry, and the US has a trillion-dollar credit card debt.

> Fresh from having freed wealthy corporations from onerous regulations, Janklow looked around for a way to free wealthy individuals too, and thus came to the decision that would eventually turn South Dakota into a Switzerland for the 21st century. He decided to deregulate trusts.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#37

Post by yboris »

tylersmith wrote: post #23
hilux wrote: post #13

Earlier quoted context omitted.

Because it's depressing.

But what about it a Trust is depressing exactly? It's just a legal agreement for how wealth can be spent.

0 taxation on assets or income and it's available to people living outside of the state.

So rich people can avoid paying taxes.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#38

Post by suoduandao3 »

mushufasa wrote: post #17

This is the conclusion of Thomas Picketty's 2013 book, "Capital in the 21st Century." Due to the historical averages of the rate of return on capital, he concluded empirically that wealth will continue to concentrate to the point to inheritors, to the extent that individuals become increasingly unable through labor to achieve parity to the inheritors. The book was very provocative in economist circles, but even the c…

It's an interesting model and in my opinion, provides a much better model for the 'fourth turning' pattern than the mechanism put forward by the authors. The predictable return on capital Picketty points to after all only happens during times of stability, during times of instability wealth disparities actually decrease. If too much concentration of wealth leads to crisis and crisis is a 'distributing' mechanism this is basically a self-correcting dynamic.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#39

Post by thriftwy »

mushufasa wrote: post #17

This is the conclusion of Thomas Picketty's 2013 book, "Capital in the 21st Century." Due to the historical averages of the rate of return on capital, he concluded empirically that wealth will continue to concentrate to the point to inheritors, to the extent that individuals become increasingly unable through labor to achieve parity to the inheritors. The book was very provocative in economist circles, but even the c…

I believe this was true throughout almost all history, and 20th century was a fluke where a lot of people lost what they could inherit, and other lots of people made their capital from hard work.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#40

Post by SketchySeaBeast »

tylersmith wrote: post #15
SketchySeaBeast wrote: post #7

Earlier quoted context omitted.

Assuming we're not talking "I have a retirement plan and a house so my net-worth is over a million" type of millionaire, isn't passing oneself off as a multi-millionaire instead of a billionaire a distinction without a difference? I guess I don't run in those circles, but it's still fabulous wealth either way.

It's the difference between someone having $2k and $1 million dollars.

But the differences there are material - rent, food, utilities, these all function on a scale of thousands. Millions to billions? You don't need to care about any of those. You've very much left the mundane monetary worries behind.
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