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What Does One Billion Dollars Look Like?

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Re: What Does One Billion Dollars Look Like?

#81

Post by anonym29 »

WalterBright wrote: post #61
lurk2 wrote: post #51

Earlier quoted context omitted.

I was sure your numbers were wrong but if we assume $200,000 in your sleep means $600,000 a day, that’s $219,000,000 per year. Bezos has an estimated 220,000,000,000 dollars as of May 2025. $220,000,000,000 per year / $219,000,000 per year = 1004.6 years. Wild.

Let's have some fun. $600,000/per day, with an annual investment return of 7%, reaches $220b in 64 years, not 1004. import core.stdc.stdio; void main() { double wealth = 0; double pay = 600_000 * 365; double api = .07; for (int year = 0; ++year;) { wealth = wealth * 1.07 + pay; if (wealth >= 222_000_000_000.0) { printf("year = %d\n", year); break; } } }

There appears to be an unspoken normative view being asserted throughout the thread that people who do not invest their money and take advantage of compounding should achieve outcomes comparable to those who do invest their money and take advantage of compounding, essentially idealizing the elimination of the opportunity cost of not strategically deploying capital, discounting the benefits accrued to those who can do the math and choose to act upon it rationally, and privileging the act of spending all disposable income on nonproductive ends. I suspect a nonzero amount of motivated reasoning is at play on behalf of those who choose to spend disposable income nonproductively on depreciating liabilities rather than assets; this seems closely psychologically related to regretting self-failure to optimize for long-term economic outcomes that is directed back as spite at those who successfully optimize for long-term economic outcomes.

Re: What Does One Billion Dollars Look Like?

#82

Post by al_borland »

dmoy wrote: post #77
al_borland wrote: post #29

Earlier quoted context omitted.

Maybe. A lot of these calculations are usually based on historical averages for the US stock market. For the economy to keep moving, they need people to spend their money. Eventually it may all even out, where people spend so much once they hit a certain point in their life/portfolio, that it allows for everyone else to be saving and investing everything in the first few decades of life. But a transition period where…

> . If we are seeing slowing growth, or even population decline, can we expect the markets to contract right a long with the population. What will that mean for everyone’s retirement accounts? Shit, the bigger scarier one is housing and ss. A huge percentage of people's retirement is either directly in housing (i.e. their house is their only asset), or indirectly in housing via their (mbs or other mortgage related bo…

I have this theory that a big driver of the lack of housing, and the resulting high prices, is due to the lower rates of marriage. More single occupancy homes means more homes are required. This goes hand in hand with a declining birth rate. So this breakdown in the family structure could be at least partially responsible for both the rise and collapse of housing prices. That’s kind of interesting.

Re: What Does One Billion Dollars Look Like?

#83

Post by anonym29 »

dmoy wrote: post #76
harmmonica wrote: post #23

Earlier quoted context omitted.

I always thought one of the biggest problems with modern education is not spending enough time teaching people about interest rates/return on investment. If everyone just understood what you're pointing out here--just really "got it"--I feel like the world would be in a much better place. It's not dire (I don't think?), and I know we've come a very long way, but, man, it could be so much better.

> If everyone just understood what you're pointing out here--just really "got it"--I feel like the world would be in a much better place. It's not dire (I don't think?), Maybe, but it also is predicated on a market like today's market, where the average American saves approximately zero dollars and has to work until social security. If everyone saved a lot, you'd get a different situation. Probably a better situation…

The average American might be able to save more and work fewer years if the average American didn't make the economically self-harming and unnecessary average spending decisions that average Americans make on social status signifiers, luxury goods, depreciating liabilities, etc.

Re: What Does One Billion Dollars Look Like?

#84

Post by dmoy »

anonym29 wrote: post #83
dmoy wrote: post #76

Earlier quoted context omitted.

> If everyone just understood what you're pointing out here--just really "got it"--I feel like the world would be in a much better place. It's not dire (I don't think?), Maybe, but it also is predicated on a market like today's market, where the average American saves approximately zero dollars and has to work until social security. If everyone saved a lot, you'd get a different situation. Probably a better situation…

The average American might be able to save more and work fewer years if the average American didn't make the economically self-harming and unnecessary average spending decisions that average Americans make on social status signifiers, luxury goods, depreciating liabilities, etc.

Right, exactly. And that consumerism is no small part of what fuels stock growth. If that disappears, then paradoxically your investments won't get you as far.

Re: What Does One Billion Dollars Look Like?

#85

Post by haizhung »

bnycum wrote: post #48

"The average American household spent $87,432 in 2021." That number seems awfully high to me? That's more than I am seeing the average household makes in 2023.

You just discovered the difference between average and median :-)

For the average, Jeff bezos is pulling it up.

Re: What Does One Billion Dollars Look Like?

#86

Post by Paracompact »

anonym29 wrote: post #79
Paracompact wrote: post #58

Earlier quoted context omitted.

> I also figure he, like Elon Musk, pays orders of magnitude more than his fair share, if we consider the definition for "fair share" to mean everyone pays the same amount of direct cash transfer into the system and gets the same amount of direct cash receipt out of the system. I appreciate the clarity, but this is a bizarre definition of fair share. Do you really believe that everyone gets the same amount of usage f…

>Do you really believe that everyone gets the same amount of usage from, and contributes to the same amount of wear and tear on, municipal and infrastructural resources? No, I do not believe that, but it's worth noting that taxing income has no direct relationship to usage-based taxation of public resources. There are people who pay millions in income taxes while making negligible use of roads, and there are net tax…

Of course! I think carbon taxes and the like are a great idea. If we had the social technology and the social consensus to enact pay-what-you-use schemes for everything, we might be close to a utilitarian utopia already. (For example, I have no idea how to compute the marginal benefit to an individual derived from living in a society that values egalitarian access to higher education, even if that individual does not choose to access those resources directly; but such would be necessary to pursue a rigorous calculation of that individual's fair share.)

Lacking that utopia, we have to estimate. You say income taxes are an unfair mechanism; what do you think is fairer?

Re: What Does One Billion Dollars Look Like?

#87

Post by TFYS »

harmmonica wrote: post #23
dmoy wrote: post #3

$1 billion dollars looks like $20-$35 million dollars a year of indefinite spending, inflation adjusting, depending on the exact form of the billion dollars and the tax rates involved. So, spending 100% of the after tax income of like 75 (well paid!) staff engineers at a big tech company in CA, but without having any job.

I always thought one of the biggest problems with modern education is not spending enough time teaching people about interest rates/return on investment. If everyone just understood what you're pointing out here--just really "got it"--I feel like the world would be in a much better place. It's not dire (I don't think?), and I know we've come a very long way, but, man, it could be so much better.

Where does this return on investment come from? From people working. It's not possible for everyone to live on investments, someone has to do the actual work. Imagine if everyone started investing most of their money now, and after a generation or two everyone had enough capital to live on the interest alone. Who would do the work? I think we would benefit more from letting a larger part of the returns that work creates go to the people who do the work, not to the people that happen to have a lot of capital.

Re: What Does One Billion Dollars Look Like?

#88

Post by lurk2 »

anonym29 wrote: post #81
WalterBright wrote: post #61

Earlier quoted context omitted.

Let's have some fun. $600,000/per day, with an annual investment return of 7%, reaches $220b in 64 years, not 1004. import core.stdc.stdio; void main() { double wealth = 0; double pay = 600_000 * 365; double api = .07; for (int year = 0; ++year;) { wealth = wealth * 1.07 + pay; if (wealth >= 222_000_000_000.0) { printf("year = %d\n", year); break; } } }

There appears to be an unspoken normative view being asserted throughout the thread that people who do not invest their money and take advantage of compounding should achieve outcomes comparable to those who do invest their money and take advantage of compounding, essentially idealizing the elimination of the opportunity cost of not strategically deploying capital, discounting the benefits accrued to those who can do…

The point is that you can’t catch up, even making more money than you could ever reasonably hope to earn. If you had $220,000,000, you can catch up to Bezos in 60 some-odd years; but by then he will also have been compounding at 7% per annum, and will have north of $19,000,000,000,000, which is around 2/3rds of America’s GDP today. Of course, Jeff Bezos will be dead in 60 years, but this leads us to the core of the debate: What did Jeff Bezos’ children do that would warrant their wealth?

Re: What Does One Billion Dollars Look Like?

#89

Post by vismit2000 »

JadeNB wrote: post #57
xhrpost wrote: post #11

1 million seconds -> 11.5 days 1 billion seconds -> 31.5 years

As somebody, maybe Sagan, said, pi seconds is approximately a nanocentury.

This fact is also present in 'Back of the Envelope' chapter in Programming Pearls by Jon Bentley!
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