> If you spend it on things for yourself, you can't spend that kind of money. But if you use it on other people, it quickly evaporates the more you want to get to do with it.
There's a limit though, right? Gates is spending it pretty fast except he isn't. It can be hard to spend millions in a day because it takes time to spend that money and your money makes money in that time. At a large enough wealth, you can't ignore the compounding factor because it plays a significant role. If it were even the 2 days standard transaction, then that 2 days generates you another $4m right? And that $4m generates you another $200k/yr (or ~$500/day).
I ran a simulation, because it helps for framing. Start with 16bn, 5% yearly interest, 0 employees, and let your employee cost $400k/yr (L5). Each weekday, take daily interest, and pay the employee's daily salary. There are 104 weekend days, so we'll pay a daily rate of ~$3.5k (I used exact). If it is a weekend don't pay the employee.
In a year you have 261 employees and have made $767 million dollars. That's a pretty profitable year! Oh, yeah, your employees probably made you money too.
If you're a billionaire and did this, you would have lost $1.6m over that year. With $2bn, you profit just shy of $50m.
> Wouldn't you rather study that with other people than by yourself? And fund all the various possibilities you think will pan out?
Definitely. I got 261 this year and we've made a nice profit without delivering a product. Next year we'll double in size and make the same.
> General philanthropy
The reason to do that simulation is to try to guesstimate these things. MacKenzie Scott is well known to be a huge philanthropist. She's richer now than when she divorced Bezos. Of course, Amazon has done much better than 5% per year. But at the same time, she is trying to throw money away as fast as possible. Also according to Forbes last year she gave away $2bn and so far has given $16.5bn away...
That's someone who's twice as wealthy as the person we're talking about, has given away "one Andy Bechtolsheim" AND profited! This is since 2019 btw.
I really cannot stress how large these numbers are. And how different money is at these sizes, because if you do not consider compounding interest (a thing we can often ignore in our daily lives, even if we were multi-millionaires), you're not accounting for millions of dollars. I'm sure there's a way, but it is effectively impossible to spend $100bn. It takes a whole country to do that. Remember, at the start of the simulation you are paying out $1.5k/day, but at the end you're paying $400k/day. Your compounded rate of spending just can't catch up to your compounding rate of earning. The $2bn person doesn't start losing money until day 710.
Yeah, those are good, but they still treat money as static. And our brains just aren't wired like that. It's very hard to conceptualize because we think numbers like 1bn is close to 2bn due to the aggregation of the 0's but they just aren't.
There's a limit though, right? Gates is spending it pretty fast except he isn't. It can be hard to spend millions in a day because it takes time to spend that money and your money makes money in that time. At a large enough wealth, you can't ignore the compounding factor because it plays a significant role. If it were even the 2 days standard transaction, then that 2 days generates you another $4m right? And that $4m generates you another $200k/yr (or ~$500/day).
I ran a simulation, because it helps for framing. Start with 16bn, 5% yearly interest, 0 employees, and let your employee cost $400k/yr (L5). Each weekday, take daily interest, and pay the employee's daily salary. There are 104 weekend days, so we'll pay a daily rate of ~$3.5k (I used exact). If it is a weekend don't pay the employee.
In a year you have 261 employees and have made $767 million dollars. That's a pretty profitable year! Oh, yeah, your employees probably made you money too.
If you're a billionaire and did this, you would have lost $1.6m over that year. With $2bn, you profit just shy of $50m.
> Wouldn't you rather study that with other people than by yourself? And fund all the various possibilities you think will pan out?
Definitely. I got 261 this year and we've made a nice profit without delivering a product. Next year we'll double in size and make the same.
> General philanthropy
The reason to do that simulation is to try to guesstimate these things. MacKenzie Scott is well known to be a huge philanthropist. She's richer now than when she divorced Bezos. Of course, Amazon has done much better than 5% per year. But at the same time, she is trying to throw money away as fast as possible. Also according to Forbes last year she gave away $2bn and so far has given $16.5bn away...
That's someone who's twice as wealthy as the person we're talking about, has given away "one Andy Bechtolsheim" AND profited! This is since 2019 btw.
I really cannot stress how large these numbers are. And how different money is at these sizes, because if you do not consider compounding interest (a thing we can often ignore in our daily lives, even if we were multi-millionaires), you're not accounting for millions of dollars. I'm sure there's a way, but it is effectively impossible to spend $100bn. It takes a whole country to do that. Remember, at the start of the simulation you are paying out $1.5k/day, but at the end you're paying $400k/day. Your compounded rate of spending just can't catch up to your compounding rate of earning. The $2bn person doesn't start losing money until day 710.