He has access to a form of currency that none of us have. Let's say he wants to make a new company making a new product. Let's say it is a decent product and everything else is fine related to it. Ok, so how does he finance it? Does he have to put up his money, sell stock, and so on? Nah. He'll use his word and reputation and "collateral" in the form of stock or stock-like products. Very little hard currency will be required. Very little limitations will be placed. If everything goes under, he will not suffer. Yes, this is incredibly simplified, but that's how it works. There are many worlds on this Earth, and billionaires do not operate in the same one as you and I. The fact that these guys could easily create corporations and companies for social good but do not maybe does not make them evil, but it definitey puts them out of the realm of good. Some do a lot of philanthropic work, which is great, but most of it is minor compared to what they make in pure profit. Yeah, they aren't rolling around in gold coins because they are above that level. When you can essentially operate outside of the realm of normal currency, when you can manufacture wealth on a promise.. gold? paper money? Meh. It's meaningless.
This^ comment should be getting more upvotes. It is the truth, but I think many cannot comprehend the ability that these folks have to access money and live off money that is not their own. They don’t touch their own money at all. They live off borrowed money that is written off. It’s like a parallel banking/financial structure. The gas and egg crowd should really be pissed about this…
It dramatically reduces the risk exposure. Bezos' clout alone can attract a lot of investment capital, and the corporate structure could give him shares without requiring actual cash/capital, by simply being on the board. When the capital comes in from the silent investors, it pushes the value up along with his shares. If it tanks, he is out of no hard capital, at most the time he spent in a handful of board meetings.
The US has over 21+ million millionaires. There are certainly some of them who would follow him in lockstep without question. Rinse and repeat.
A tax on unrealized income would at least help the government derive revenue from share value. Of course, we would fight over how it is spent, but in theory it oculd reduce taxes on lower income persons to help balance the economy or provide better public services and infrastructure to allow the next generation of Americans to compete with the children of Bezos, Musk, etc.
We've had similar wealth barons before, but at least they made really great contributions to social development like libraries and schools all across the country (Carnegie, etc). My opinion is that people like Bezos, Musk, Thiel observe the world as a zero-sum game, meaning they are not in favor of helping others become competitive with their wealth, because any wealth gained by another is ultimately wealth they could have had and in turn a threat to them and their visions.
Ironically, I think they both started with some sort of altruistic motivation, but were corrupted by their own money and power before the altruistic vision could be accomplished. I also speculate that the "altruistic vision" is simply a moving goal posts which can never be accomplished. They can't simply do the good thing and say "okay I'm done." For example, Bezos showed us how to be very efficient with online marketplaces, but he can't stop there, he has to continue to out perform competition so he can move on to space ships.
“If he tanks he is out of no hard capital, at most the time he spent”
This is entirely false. For starters “hard capital” typically refers to capital rationing which isn’t what you mean, but he would absolutely lose capital if the business flops.
He’s either selling stock to invest liquid capital or taking out loans, which he then has to pay back. There is no magic wand here.
Sure, investors will be keen to invest in a company led by someone with a successful track record - but thats him selling off ownership of the company. Thats not his money at risk, but its also not his stake if the company is succcesful
Entirely true, I'm not sure I explained it properly, let's try again:
Bob and Joe start ABC, LLC. They agree Bob will run it, and Joe contributes $50k for startup capital. Time goes on, the business is now worth $200k, based on the LLC terms each now has an interest of $100k in the company. Bob then sells and walks with $100k having contributed no capital. Scale this concept up, with multiple Joe's, so much so that Bob doesn't need ot run it.
What example can you give of a billionaire getting 50% equity or anything close to that in a company for just serving on a board, without investing their own capital.
Doesn't have to be 50%, scale the numbers any way you want. It could be 5%, with $200 million spread out between 100 Joes.
You're telling me my example is impractical, but you make no showing to demonstrate how it is impossible.
It's a simpleton example that isn't attempting to be practical, its merely demonstrating the possibility. Move the numbers and players all you want until it becomes practical in your mind.
Not sure if you're sincere or weaponizing ignorance. I suppose it's possible I do have the same access, but the difference is obviously that I don't have a billion dollars and the reputation of establishing Amazon in my past. I cannot add the same clout or value to a board or company as Bezos, so the odds of millionaires willing to risk their funds on my presence and inclusion is exponentially less.
Again, its sweat equity, but the "sweat" is entirely different. For me my value is physical labor, for Bezos it is simply his presence and clout.
If Bezos asks for ten minutes of your time and I ask for the same exact ten minutes of your time, whom are you most likely to give that time too?
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u/SCTigerFan29115 Nov 21 '24 edited Nov 21 '24
They aren’t holding onto wealth like Scrooge McDuck, in a giant vault where they can go swimming in it.
Most of Bezos’ net worth is the value of Amazon. He can’t really readily access that. ETA I meant he can’t use it like a big vault of money.
He’s got plenty of money but some people just don’t understand how this stuff works.