The word billionaire is thrown around daily. But have you actually stop to think about what it really means. Yes, being a billionaire is having more than being a millionaire and who would not want to be that wealthy. But by comparison, what is the billionaire status compared to the average person. When you look at a comparison, it is truly mind boggling.
The Billionaire Compared To The Average Person
To get a full and clear understanding of what it means to be a billionaire, let us compare to the average household. In this comparison, we use the median household income because the median provides a better representation of central tendency as compared to the mean. Essentially, the median income gives us a better view of the average household income because the mean can be skewed by those in the super rich/super poor.
The median household income was $68,703 in 2019. In most parts of the US, the cost of rent/mortgage + child care would easily exceed this amount. But let us put this total in the context of a billionaire. If we do the simple math of $1 billion divided by $68,703, it tells us that it would take a person/family making $68,703 a year 14555 years to earn $1 billion. To be clear, it would take a household making the median income over 14 thousand years to earn a billion dollars. This is absolutely eye opening.
This further demonstrates why it is so financially dangerous to try and keep up with the Jones. The wealth disparity between you and the Jones can be so vast that it can take thousands of life times to amass comparable resources.
Billionaires
When we talk about billionaires, we must acknowledge those who have risen to this level of wealth. This includes Jeff Bezos, Elon Musk, Mark Zuckerberg, Warren Buffet and Bill Gates. These individuals have done extraordinary things and do deserve their wealth. But you can’t help but ask, when is enough, enough? With such accumulation of wealth, what is the plan? We know that if these individuals try, it would be a monumental task to try and succeed in spending all this money. No matter the interest rate or the return on investment, a billion dollars will accumulate so much on a yearly basis that it is really almost impossible to dispose of such sums of money. Not too many billionaires go broke.
Billionaire Fortunes Since The Pandemic
As our conversation about billionaires continue, it becomes factually crazy that many of these individuals have increased their wealth during the pandemic. For example, Jeff Bezos is reported to have increased his wealth by about $70 billion and Elon Musk has reportedly increased his wealth by about $132 billion. While the math is simple, the more you have the more you can make, it is mind blowing to imagine the difference between someone of Jeff Bezos’s wealth and that of the median household. It is a matter of $187 billion vs $69 thousand ($187,000,000,000 vs $69,000). The difference is a lot of zeros.
While the average household is thinking about mortgage/rent and child care, billionaires are thinking about legacy. And why not, the financial difference is truly a sight to see. The simple fact is, the purchase of a mega yacht to a billionaire may be comparable to you purchasing a shoe. While the cost matters, it does not change your life financially. Keep this in mind the next time you hear of someone purchasing a mega yacht, helicopter or an island. The billionaires can afford it.
Conclusion
The word billionaire is thrown around daily. But have you actually stop to think about what it really means. Yes, being a billionaire is having more than being a millionaire and who would not want to be that wealthy. But by comparison, what is the billionaire status compared to the average person. When you look at a comparison, it is truly mind boggling.
So why did we write this article. We wrote this article to show that we sometimes do not truly appreciate the sums of money that we discuss on a daily basis. It is only when we break it down and compare do we begin to see the full scope. Next time you hear/see the term “billionaire” realize that it would take the average household over 14 thousand years to earn that sum.
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