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What is the value of money after a billion dollars? What motivates you after you have enough money?

Sometimes I think that the average person (including myself) can’t even quantify how much money a billion dollars even is. I mean I can wrap my mental arms around a million dollars. I know what I would do with it, how I would invest it, and what it would allow me to do in my life. I am also fairly certain that in a couple decades I will be a millionaire (or at least Mrs. TM and myself will have a million dollars net worth between us). So I can get that far. At ten million things sort of start to get a little hazy for me, but I think of certain houses I have seen that cost 2-3 million, and a couple of top-tier vehicles, sending kids to Ivy League schools, and I can still sort of barely grasp the type of life I would lead. When you get into the 50-100 million I’m totally gone. I don’t know what I would do with most of my money in that situation. I would travel endlessly and give a lot to charity I guess. Now you think about what 1000 millions actually means, it doesn’t even compute. That amount of wealth is so incredible to me that I’m certain people who are that wealthy must think a fundamentally different way than most of us do. According to Forbes there are 1226 billionaires in the world as of 2012. Just something to chew on.

The Reluctant Capitalist?

I’m pretty capitalist-oriented. I like the idea that those people who work hard, take risks, and innovate new wealth into the world should be rewarded for it. That being said, I can understand how it is tough to stomach some people having several billion dollars. Most of the personal finance bloggers that I read have a goal of somewhere in the 1-2 million net worth area, think about the fact that someone who has 10 billion dollars could create 10,000 millionaires. That’s sobering to me. I really hope the vast majority of those 1200 odd souls seriously grasp philanthropy and try to help make the world a better place because while I hate the idea the government should try to tax them into helping others (the government is incredibly inefficient at actually accomplishing this), it does make me queasy to think about that amount of wealth relative to the hardships that many people go through.

I See Your Bet Equal to Libya’s GDP and Raise You…

I came to the conclusion some time ago that after a certain point (probably somewhere around the $1 billion mark) money must start to lose all sense of meaning in terms of a store of value or a form of legal tender. Anything you really want you pretty much get (in a material sense anyway), so these guys/gals must continue to work had and build companies for other reasons. They must be sort of hardwired like Michael Jordan in that they were born to make money, and for them to keep waking up every morning and have that level of motivation there must be a competitive aspect to it. Eventually, using your wealth to create more wealth must become almost a sort of obsessive hobby, or the most challenging and rewarding board game on the planet. In that situation, creeping up the Forbes list simply becomes a way of keeping score. Sure you might want to provide for your grandchildren and maybe even their children, but beyond that, isn’t it even a little weird to think about?

What Is Fair and How Equal Should We Be?

So as common individuals what should we think about this wealth accumulation, and should we just be philosophical about it? I mean, there is a certain degree of higher-power truth to the idea that I’m quite certain I could find you a person making $3,000 a year in the world somewhere that is much happier than most of that Forbes list, in fact I bet I could find millions of people that fit that example. So should we focus on internal happiness instead of picketing and/or complaining about the “1%” (which should actually be the .001%)? I’m not sure. Like I said before, I hate the idea of the government bungling tax raises and chasing wealthy individuals out of Canada and the USA and into Singapore (see Eduardo Saverin). At the same time, there is something there that is really uneven, so I guess my ideal solution would be to get Warren Buffett and Bill Gates out there as often as possible pitching the idea of efficient, innovative and creative philanthropy. I love how hands-on Gates is with giving his money away and how he is constantly supporting new reforms and studies in order to advance public education amongst other things.

Is that the best viewpoint on the ultra-wealthy/the people that use money to keep score? What is your sense of the situation?

Article comments


I totally agree that at some point money becomes something else to the ultra rich. Mark Zuckerberg has lost something like $9B since the Facebook IPO. $9B?? I could not even comprehend what losing that much money is like or what it would mean for people. I love capitalism and all, but it really seems like past a few million you could just use your cash to fulfill the lives of others.

Teacher Man says:

The really funny part is that he lost the equivalent of the GDP of a small country, and yet it won’t affect his life at all in reality.

Actually, when you read in-depth interviews with very successful traders and investors, most of them say exactly that: the money is a means of keeping score. Sure, beyond some point, they don’t need the money. But very competitive people always want to win, to be the best. In the financial world, it’s probably natural that money would be used to keep score. So in this sense, I can totally understand people like that, even if I don’t subscribe to that philosophy myself.

Teacher Man says:

Yup, this is exactly what I figured. For guys/gals like that, their personalities are likely very “Jordan-esque”… the only problem is that Jordan was always highly above average, and nearly all money manager-types are not!

It’s definitely about more than the money for the ultra-rich. Creating value and growing businesses/revenue streams is in their blood, and there is no doubt that competition comes into play. Philanthropy is great, but I don’t think that it should be “expected” of wealthy individuals. The best philanthropy is done with no name recognition. I respect people who donate $50k anonymously more so than someone who donates $50 million so their name can be on a building.

Teacher Man says:

I guess the philanthropy comment was more made in response to the idea of increased taxation. At least with philanthropy you have individual control over redistribution. This has to make more efficient than the ridiculous taxation SNAFU we are currently looking at.

I don’t know if I’d agree that the ultra wealthy use money to keep score any more than any other socio-economic class. When you get a decent base of capital, the money starts working *for you* instead of you working *for money*. That’s how investing works. At a certain point, I don’t think it’s about competitiveness so much as it’s about having big enough resources that you’re working with economies of scale.
In the small sample size of “ultra” wealthy people I have met in my life so far, most give a lot to causes they care about, and may have a staff of people to help them make financial and legal decisions (because the consequences of bad decisions are on a completely different order of magnitude), but are otherwise not *too* different, and certainly don’t seem more competitive than anyone else.

I feel a lot the same way you do. And I think the solution lies somewhere in the Buffett/Gates realm. I don’t think anyone NEEDS a 2 mil dollar house, though I’m not against people buying them.

Side note: Boyfriend was talking about how the lottery was at 10 mil. I told him that wasn’t enough to live off for the rest of your life. I automatically assumed the worst and guessed that we’d be lured into lifestyle inflation. His jaw dropped and looked at me like I’d never be satisfied…he was accounting for 0 lifestyle inflation. I think reality would lie somewhere in between.

I absolutely agree with you that at some point money must lose all tangible value for these ultra-rich individuals, especially since most of them continue to spend a great deal of time building their empires. When most of us have a realistic idea of what the end goal is, some of these people continue to accumulate wealth. You have to wonder if they even check their accounts anymore.

Interesting statistic on the number of billionaires in the world – hard to believe it is that low!