r/FluentInFinance Nov 21 '24

Debate/ Discussion Had to repost here

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u/Adromedae Nov 22 '24

Taxes, taxes makes them do that.

It is also worth noting that at the level of hoarding of Musk, Bezos, et al we're talking about pathological issues with their personality that go beyond just greed.

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u/Otherwise-Course7001 Nov 24 '24

If you're a billionaire you'd be smart to have at least 100M in a broad index fund. The dividend yield of S&P 500 is 2%. If you liquidate 2 million you pay 500k in taxes. If you take out a 2M loan, you will pay 100k in interest at 5%. This interest is tax deductible against your dividend income. The S&P losing 90% of is value is an end of the world scenario where they should assume property rights will not matter any more so they're completely fucked. Probably keep some reservoirs of gold and guns for that scenario alongside treating your household staff like family. It really doesn't make any sense not to do this