If the class of super rich people are sometimes seen as out of touch with the rest of humanity it might be because there are proportionately so few of them.
While there are many millionaires in the world – the extravagantly rich class of billionaires boils down to only around 2200. That’s 0.00003% of the world’s population. They are more than just one in a million – they are 1 in every 3.4 million.
One way to grasp the unicorn status of billionaires is that this average 0.00003% rate would make:
- 3 billionaires in NYC (population 8.5 million)
- 100 billionaires in the US (population 325 million)
Of course NYC has a larger population group of billionaires at 82 and counting, and the US holds more than its fair share at 624. In addition, of the top 10 richest people on the planet, a majority are Americans.
How do people become billionaires?
According to an article in Forbes, the highest percentage of billionaires (about 33%) come to their fortunes the old fashioned way – they inherit it. But there are other ways for those who weren’t “to the manor born” could build massive wealth.
Of the current Billionaires
- 14% are bankers, financiers and hedge fund managers
- 11% are in fashion or retail
- 10% are in real estate
- 9% in manufacturing
- 9% in tech (including Jeff Bezos and Bill Gates)
What do they spend their money on?
The billionaire lifestyle sounds like a cakewalk, but costs in personal security, mansion maintenance, and lawyer fees add up.
For example, according to an article in Fortune, keeping Mark Zuckerberg and his family safe costs upward of $10 million per year. Total costs to live like a king can be over 100k per day. Which means you would need to make close to $50 million per year (after taxes) just to cover basic costs.
And that’s before you treat yourself to something nice. Billionaires will splurge on bizarre items. Bill Gates’ $124 million home, known as Xanadu 2.0, famously features a trampoline room – which sounds fun if you can afford it. He also purchased a Michelangelo manuscript, known as the Codex Leicester, for $30.8 million US Dollars – just a part of his extensive library. Reportedly, the property also sports a private beach with sand flown in from St. Lucia.
But that isn’t all the luxuries billionaires spend their money on.
Some of the world’s stranger billionaire purchases:
- So many cars – while it’s easy to imagine purchasing a few luxury automobiles, the Sultan of Brunei (who has a net worth of over $20 billion) is said to have purchased up to 2500 exotic cars. This is a leader who loves to feel the wind in his hair (he’s also rumored to fly a barber overseas for a haircut that costs 24k per appointment).
- Just one car, but shinier – Saudi Prince Al-Waleed bin Talal purchased a diamond encrusted Mercedes which cost $4.8 million. This world’s most expensive automobile features 300,000 diamonds and a mink interior.
- At home, at sea – At $4.8 billion, The History Supreme is considered the most expensive yacht ever made. Much of the expense is from its solid gold exterior. It is currently owned by an anonymous Malaysian businessman.
- I may not know much about art – Billionaire Steven Cohen’s art collection which includes the most expensive painting ever purchased, a $155 million Picasso, also boasts a $110 million Jasper Johns painting of a flag, a Giacometti sculpture valued at $141 million, as well as $58 million worth of Koons sculptures and a $12 million shark preserved in formaldehyde (it’s art).
- Home sweet home – They say a person’s home is their castle, but Indian billionaire Mukesh Ambani has taken this to an extreme with a reported $1 billion US Dollar private 27 floor skyscraper (which, because of high ceilings is actually as tall as a 40 story building). It features 3 helipads and a multi-floor garage.
- The very friendly skies – We go back to Prince Alwaleed Bin Talal for another exercise in extravagance, a $500 million super private jet – the Airbus A380 ‘Flying Palace’ has room for the Prince’s Rolls Royce and his horses as well as five private bedrooms and two dining rooms.
What social-good and sustainable development do the super-rich engage in?
Many billionaires are known for their philanthropic work. The chronicle of philanthropy states that 2017 was a high point for billionaire giving, including three different donations exceeding $1 billion US Dollars each.
- Bill Gates with the second largest personal fortune in the world (over $90 billion) has donated some $27 billion over the years. One recent high profile donation was $4.6 billion to fight malaria.
- Warren Buffett, worth around $84 billion has given over $21 billion over time, with around $3 billion recently going to the Bill and Melinda Gates foundation which focuses its philanthropic efforts on health, development and education.
- Facebook owner Mark Zuckerburg recently gave $1.9 billion to his own corporations non-profit arm The Chan Zuckerberg Foundation. This is money which reportedly will go towards education, housing, science, and improving the criminal-justice system.
These contributions are nice to see, but it also makes one wonder what large-scale change could be accomplished if the world’s billionaires got together. What problems could be solved if all billionaires decided to use small parts of their fortunes on tackling poverty, and helping economic development.
- Long term care: If every billionaire invested $430 million or so (significantly less than a new luxury private plane) it would be possible to erase health care debt in America.
- The cost of no Credit Card debt? Priceless: While it might be a pipe-dream that billionaires are going to suddenly decide to pay off your credit cards, they could. With just $453 million per billionaire (less than half of Steven Cohen’s art budget) it would be possible to bring every person in the US back up to even from the current Credit Card debt pool of around $1 trillion.
- Help people help themselves: There is debate over the idea of raising the minimum wage to $15 per hour across the US, but a cadre of billionaires could accomplish it with less than $6 million per year! And this one might serve the rich as well as those scraping to make a living. Giving underserved populations more purchasing power could give the economy a boost.
Could billionaires help end some of society’s biggest challenges?