I'm sure many here may have come across this illustration of the difference in wealth between a millionaire and a billionaire. It uses seconds as a vehicle to make the difference more understandable. In the world of the super rich, millionaires are mere paupers!
1 million seconds = 11 days
1billion seconds = 31 years.
Astronomers love these kinds of relative descriptions to illustrate the vastness of space. Just how big is Uranus?
Is that the one with a ring around it?
Erm,
Is that an American Billionaire, English Billionaire or Russian Billionaire?
I think we gave up on British billion a long time ago, and use US billion.
My illustration:
1 million pounds = 1 million pounds
1 billion bounds = 1 thousand million pounds...
They are called short and long billions.
The lifespan of a Russian billionaire is definitely measured in days if they fall out of favour...
There's a video on YouTube where a guy illustrates it using rice, that's good. Can't find it at the moment but it's out there.
Cool. I will look it up.
On the same theme. Apparently 1 million dollar bills stacked on top of each other is about 358 feet high.
1 billion dollars is 67 miles high!
Minimum wage C £10 Ph X 37 Hours £ 370 X 52 Weeks £19,240 Pre year
1 M diff to 1B 9999
9999 Divide £19,240 519.7
Avg Life is 80 519.7 Divide 80 6,5
QED The Difference Over 6 lifetimes work
I thought it was the difference between owning a big boat and a space ship.
> I thought it was the difference between owning a big boat and a space ship.
Fast forwards a decade; if SpaceX are selling their Starship rockets at a reasonable markup you could probably have a hundred of them for the cost of a leading super yacht.
Actually being a millionaire in Britain now is not exceptional. There are probably millions of millionaires in the country, particularly amongst home owners. It's just that it's money that they can't use, but will form part of their estate when they die.
If we stack all the millionaires on top of each other do you think we would reach the height of Ben Nevis?
> I thought it was the difference between owning a big boat and a space ship.
I think it's more than that. More like the difference between owning a toy boat and the whole of Star Fleet and all those funny looking Klingon ships too.
> Minimum wage C £10 Ph X 37 Hours £ 370 X 52 Weeks £19,240 Pre year
> 1 M diff to 1B 9999
> 9999 Divide £19,240 519.7
> Avg Life is 80 519.7 Divide 80 6,5
> QED The Difference Over 6 lifetimes work
You lost me there. I don't think you factored in Income Tax and NI contributions either.
> Actually being a millionaire in Britain now is not exceptional. There are probably millions of millionaires in the country,
About 23k estates (5%) paid inheritance tax last year. I can see that increasing significantly in the short to medium term, not so sure about the long term.
> If we stack all the millionaires on top of each other do you think we would reach the height of Ben Nevis?
Easily. Assuming the average height of the millionaires is 1.79m you would only need 757 people standing on top of each other to equal Ben Nevis
I was thinking more lying flat on top of each other. So maybe 7000 or so? It's still doable. Who should we put at the bottom?
> cost of a leading super yacht.
Curiously we were holidaying near home at the coast this summer and this was moored outside the harbour.
https://www.yachtcharterfleet.com/luxury-charter-yacht-49015/aquarius.htm
$1.5m/week!!! That's a different realm of wealth.
Owned by Steve Wynn who set up half of Vegas.
Is it just me, or does the water slide on the side of that thing make it look exceedingly tacking?
If I had $20M to drop on a boat, it'd be a dual hulled SWATH hydroplaning catamaran, something like the Juliet GHOST. Nothing like super-yacht size but by golly it would be cool.
https://www.businessinsider.com/juliet-marine-systems-ghost-boat-2016-11
> Is it just me, or does the water slide on the side of that thing make it look exceedingly tacking?
Were talking billionaires here. Taste is largely incidental...
As we know money doesn't buy taste.
If you want a cheaper toy, google up videos of thunder child 2, built in Ireland. Fuel economy may not be to you liking though.
> > Is it just me, or does the water slide on the side of that thing make it look exceedingly tacking?
> Were talking billionaires here. Taste is largely incidental...
True, true. If I ever make it large my future is set by cellulose
I always say to my wife when she moans about my income, "We can live just as happily with one million pounds as apposed to one billion - moneys not everthing!!!
Billionaires have even more ruthless accountants.
Wooden boats are money pits. Well, all boats are money pits, but wooden boats especially so...
> Wooden boats are money pits. Well, all boats are money pits, but wooden boats especially so...
But, like so many money pits, they are such needful things.
I read a good way to get your head round the difference on reddit.
Say the average wage is 20k per year. If someone earns 20 million a year everything is effectively 1/1000th the cost. So the amount of thought you put into buying a £100 harness is the same as a they would put into buying a £100k car. And a house that cost a £1 million would be like you spending £1,000 on something.
For someone who has £20 billion things effectively cost 1/1,000,000th of the price. So for them a £1 million house is like you spending a £1 on something. The £100k car cost them the equivalent of 10p.
That’s some pretty stark post. Informatively demonstrate why those guys are effectively a different breed now! Might as well have 2 heads really!
That's a very different perspective and a fascinating illustration of the difference.
One owns a house in London, the other owns a house builder in London.
> That’s some pretty stark post. Informatively demonstrate why those guys are effectively a different breed now!
Not just guys. Denise Coates pocketed half a billion just last year. Its quite hard to get your head round it but as she's UK based and fairly transparent I hope that means quite a lot of tax paid somewhere.
Given how she makes her money I hope she is more than paying her fair share.
Coincidentally in a similar vein, text book I'm currently ploughing through suggests that if it takes a computer one second crack a 56 bit DES key, then the same computer taking the same approach would take something in the region of 149 trillion years to crack a 128 bit AES key.
A millionaire has stood on a thousand more people to get where they are.
I moored my Octavia outside the fish and chip shop, and nobody battered an eyelid.
> Actually being a millionaire in Britain now is not exceptional. There are probably millions of millionaires in the country, particularly amongst home owners. It's just that it's money that they can't use, but will form part of their estate when they die.
A more realistic measure of millionaire status is to exclude the value of the main residence and pension saving, i.e. include only disposable wealth. Cuts down the numbers significantly.
> A millionaire has stood on a thousand more people to get where they are.
More likely helped a thousand more people by getting where they are.
> I moored my Octavia outside the fish and chip shop, and nobody battered an eyelid.
Battered eyelids? Do you live in Scotland?
Unless they won it, stole it or inherited it, it would be pretty difficult to generate £1m after tax without providing value to others (customers, employees, the state, etc etc).
> Unless they won it, stole it or inherited it, it would be pretty difficult to generate £1m after tax without providing value to others (customers, employees, the state, etc etc).
Value can equally be thought of a a net sum gain, meaning that providing low prices to customers may well be negated by poor staff pay and/or conditions. To what extent such net value exists probably depends on whether you think paying staff less than a living wage is providing them with any tangible 'value'.
> To what extent such net value exists probably depends on whether you think paying staff less than a living wage is providing them with any tangible 'value'.
The likes of Tim Martin and Mike Ashley do exist, and are probably the type of person we think of when talking about millionaires. Many of us will know several, of a different type, much closer to home.
https://www.ft.com/content/c69b49de-1368-11e9-a581-4ff78404524e
Bad business people make news headlines and we know who they are but I’d bet millionaires with good intentions for their staff and customers probably outnumber them by an enormous factor, it’s just they don’t make the news.
Also I’d say that bad employment (pay / conditions) is very far from ideal - I don’t agree with it - but it is still employment, so of some value to the employee. Employees mean taxes for the state (more value) and the entity gives value to its customers else it wouldn’t be entity for very long.
> Say the average wage is 20k per year. If someone earns 20 million a year everything is effectively 1/1000th the cost.
Great illustration but it's actually worse. If you're on 20k per year, the chances are that you have no savings, and are paying out a large proportion of your income in rent and bills. Even the most extravagant 20x billionaire would unlikely to be spending as high a proportion of their income on living expenses so the perceived difference in costs would be even higher.
> Were talking billionaires here. Taste is largely incidental...
They have teams of people telling them that gold plating the Bentley/Yacht/girfriend's SLK AMG, dog, Wife's Hummer H2 etc is the height of good taste
The average global wage is considerably lower. Your £20 k is considerably more than most people and puts you as “a millionaire” in their eyes.
worth stepping back and remembering that
> Wooden boats are money pits. Well, all boats are money pits, but wooden boats especially so...
I remember talking with one of the reps at the Southampton Boat Show a few years ago and being absolutely shocked at the maintenance requirements and actual lifespan of the hulls alone on the average super yacht.
Nobody EARNS 20 million (or even 1 million) a year
> The average global wage is considerably lower. Your £20 k is considerably more than most people and puts you as “a millionaire” in their eyes.
> worth stepping back and remembering that
Hmm - don't you generally imply that you're rich as phuck? I think you might also be conveniently ignoring the disparity in purchasing power between different countries.
Denise Coates ‘earned’ a £421m salary last year
Eh, no, as that would imply a lifetime equals £1/6Billion = £150M ish. You've cocked up your units in there. Always pays to do a sense check....
> Actually being a millionaire in Britain now is not exceptional. There are probably millions of millionaires in the country, particularly amongst home owners. It's just that it's money that they can't use, but will form part of their estate when they die.
A billionaire's wealth is also based on owned assets rather than cash eg Trump's. He has ten billion or two billion depending on the saleable value of his properties. Many properties have a massively unrealistic value especially in money laundering transactions. These have a great influence on the cost of housing which makes it unaffordable for the young.
> More likely helped a thousand more people by getting where they are.
ha ha, the old trickle-down blah blah blah.
> The average global wage is considerably lower. Your £20 k is considerably more than most people and puts you as “a millionaire” in their eyes.
> worth stepping back and remembering that
I think earning £20k puts you in the top 5% of the world population. Which makes it even worse there are so few people that have so much power, there really shouldn't be any billionaires in the world.
> I think earning £20k puts you in the top 5% of the world population.
I think
https://www.gapminder.org/dollar-street?p=1
gives an interesting insight into how different families live around the world, with their income per adult, adjusted for local purchasing power.
> Wooden boats are money pits. Well, all boats are money pits, but wooden boats especially so...
I would be retired with paid off mortgage if it wasn't for wooden boats.
20years left on a mortgage and living ashore is now my cursed future
They probably don’t pay that!
> Unless they won it, stole it or inherited it, it would be pretty difficult to generate £1m after tax without providing value to others (customers, employees, the state, etc etc).
Someone has never heard of rent seeking or monopolistic behaviour.
Could you expand a bit please I’m not sure what you’re saying here.
> I remember talking with one of the reps at the Southampton Boat Show a few years ago and being absolutely shocked at the maintenance requirements and actual lifespan of the hulls alone on the average super yacht.
Apparently boat sales and charters are booming at the moment. Suggests one section of society aren't struggling too much during a pandemic
Are you saying that landlords and monopolies don’t have employees, customers or pay tax?
> Are you saying that landlords and monopolies don’t have employees, customers or pay tax?
No. Rent seeking is when a firm or individual tries to extract more money out of what they’re selling from manipulating the political or institutional environment. For example, taxi firms which lobby to keep the number of taxi licences low so there are fewer taxis and hence higher prices than there would be if it were easier to enter the market. One could also engage in regulatory capture, say by lobbying to impose tariffs and reduce foreign competition, again this will push up profits (and costs to the consumer) without any genuine improvement. Similarly monopolistic behaviour results in higher prices to the advantage of the seller. Or you may consider the opposite of monopoly, monopsony or having just one buyer, or a very few buyers as often happens to farmers or those working in company towns. The monopsonist makes extra profits at the expense of others. This kind of behaviour makes people extra money without providing any extra benefits to others.
As to how big a role this behaviour plays in the creation of vast fortunes… I should point out that Warren Buffet specifically looks to invest in monopolies (or near monopolies) and he’s incredibly wealthy. And it was definitely the way huge wealth was accumulated in early 20th century America.
You might be right but the problem is consumers. They may do the talk about ethics, morals etc.... then the next minute they'll be clicking online buying the cheapest. The desire for as much as possible, for as little as possible is driving the markets.
The consumers are doing a fine job by buying cheapest. Manufacturers are efficient and worthwhile or they die. They all want to somehow create their own monopoly to sell more of their product. By patents, by advertising, or more underhand methods. But nobody wants anyone else to have a monopoly of anything apart from themself. So the idea that any political party wants monopolies is false. It is the job of government to prevent unfair competition.
> You might be right but the problem is consumers. They may do the talk about ethics, morals etc.... then the next minute they'll be clicking online buying the cheapest. The desire for as much as possible, for as little as possible is driving the markets.
Basically, what David said above. And if you look at markets for lots of things, there are options for consumers to choose more ethical choices if they wish, even without government regulation. If you are concerned about the desire for as much as possible for as little as possible, this is a good read: https://www.bbc.co.uk/news/business-38650976
But broadly, the problem is the framework in which firms and consumers operate, which is set by governments or indeed inter-governmental bodies.
OK I see what you’re saying. The original post I replied to said that millionaires were made by walking over other people and I argued that it’s difficult to generate wealth without actually helping people in some way.
The taxi firm that lobbies for fewer licenses still provides employment, a service and a huge amount of tax, even though it’s found a way to maximise its profits by lobbying for fewer licenses. Is the lobbying illegal? It could be the only way the company could economically survive, or that all its competition are doing the same thing. The ‘extra’ profits might go towards improving conditions and pay for its staff, or the owner might have the money go towards a new venture, also offering employment elsewhere.
If the owner of this firm is a millionaire, I bet he’s paid tens of millions to employees and the state in salaries and tax, and provided a huge number of taxi rides to get there. Also while working ungodly hours and taking responsibility of everything that happens for years.
The fact that Buffet invests in monopolies should be common sense. Monopolies aren’t illegal if they are just overwhelmingly successful businesses that provide a service or product which beats the rest of the market. Anyone can step up at any time and produce competition, but if you’re apple and have spent decades of time in research and development with a huge number of customers then unfortunately you’re not likely to beat them.
You're simultaneously arguing opposites.
"The taxi firm ... found a way to maximise its profits by lobbying for fewer licenses."
"Anyone can step up at any time and produce competition"
Monopolies generally exist when there isn't open and fair competition. This is usually caused by governments - sometimes (as in the case of essential infrastructure like rail tracks or postal delivery) necessarily/beneficially so. But often monopolies are caused or exacerbated by governments not taking steps to ensure fair entry into the market for newcomers. I'm sure that government heads are routinely lobbied, and offered incentives, to keep it that way.
I can't see one monopoly in Warren Buffet's portfolio, not even a world leading one in it's market. Just the usual selection of well-run businesses, banks and the odd speculative punt in growing fields.
So you want an open and competitive market? Like the energy sector?
OK. Well I would argue that if the lobbying isn’t illegal then it’s an option to everyone involved so it isn’t necessarily unfair, it’s just part of the system in a competitive market.
Similar story with monopolies - if they’re tolerated by the government for whatever reason then it’s something any aspiring entrepreneur needs to be aware of before setting off on their journey.
The people who run these successful businesses are providing immense value to the employees, customers and the state. Their main priority will be to ensure they stay around to continue to provide this value and keep themselves solvent. Is this ‘walking all other others’ would you say?
Illegal lobbying and monopolies are obviously a different story, but the term ‘monopoly’ can also apply to a simply successful business that has cornered its market by simply being better / more efficient than its competitors.
> I can't see one monopoly in Warren Buffet's portfolio, not even a world leading one in it's market. Just the usual selection of well-run businesses, banks and the odd speculative punt in growing fields.
Some detail in here:
https://mattstoller.substack.com/p/warren-buffett-americas-folksiest
> OK. Well I would argue that if the lobbying isn’t illegal then it’s an option to everyone involved so it isn’t necessarily unfair, it’s just part of the system in a competitive market.
You mean 'competitive' in terms of who donates generously to party funds? Or who pays for a seat at a fundraising dinner with a minister? That sort of fair competition 'open to everyone'?
It isn't the kind of level playing field many would see as being free and fair competition.
> Similar story with monopolies - if they’re tolerated by the government for whatever reason then it’s something any aspiring entrepreneur needs to be aware of before setting off on their journey.
I wouldn't disagree, but I would question why many monopolies (or preferential biases) are 'tolerated by the government' in the first place. Much of it appears to be distinctly uncompetitive to me.
> The people who run these successful businesses are providing immense value to the employees, customers and the state. Their main priority will be to ensure they stay around to continue to provide this value and keep themselves solvent. Is this ‘walking all other others’ would you say?
Why would you assume that other businesses - who maybe could offer better service to customers and staff were they allowed equal access to opportunities - wouldn't provide similarly 'immense value to the employees, customers and the state'? Plenty of tales of successful business owners not even domiciled in the UK and paying precious little in terms of tax.
> Illegal lobbying and monopolies are obviously a different story, but the term ‘monopoly’ can also apply to a simply successful business that has cornered its market by simply being better / more efficient than its competitors.
And I don't think anyone has any problem with that.
I think that if the lobbies are not illegal and they are happening then for better or worse they are a legitimate part of capitalism while they're allowed. They may not seem 'fair' but they are a reality which can effect any business, so every entrepreneur/business leader should be aware of them.
I'm not assuming that other businesses wouldn't be able to provide similar or even better value, just that the business in question isn't necessarily a 'bad' entity by taking all legal steps it can to protect itself.
This is quite some way from my original point though that the typical self-made millionaire does NOT get there by walking over others, certainly not in an illegal way in any case. In most cases I would think that they provide an exponential factor of value to employees, customers and the state to get there, as well as a ton of work and a lot of uncertainty.
The non-dom status of some individuals and businesses for purposes of reduction in tax looks like a pretty bad loophole to me and one that developed nations are tackling with the minimum corporation tax rule recently agreed. But if those organisations employ staff in the UK, they still pay business rates, employers NI and pension contributions. So while they're not paying corp tax through a well-known, well-used and legal trick by multi-nationals, they're still hugely contributing to the economy.
> It is the job of government to prevent unfair competition.
Unless they're taking a cut of the monopoly...
I covered that.
"nobody wants anyone else to have a monopoly of anything apart from themself. "
If they are taking a cut, or a bribe, or otherwise involved like nationalising, then they are part and it's their monopoly. Not good for everyone else.
youtube.com/watch?v=8YUWDrLazCg&
Road trip to illustrate the difference between a million dollars and a billion dollars.
I had to skip to the end. It was taking sooo long! Thanks for posting.
Put in these terms 1 Billion dollars is really boring!
> More likely helped a thousand more people by getting where they are.
The innocence of youth...
I'd take your point that millionaires have probably provided a good deal of value to society when they have thrived in a competitive environment.
I'd take issue with your defence of rent seeking behaviour though. While monopolistic rent seeking behaviour does provide some value to society, it has monopolised that value and provides that value to society less efficiently than in a competitive environment. Monopolies can and do walk all over others.
Monopolies don't have to provide goods and services at the best price or quality because there is no competition. They don't have to innovate. Customers and workers lose out and less tax is collected than would be the case in a competitive environment.
Many of those monopolistic behaviours are illegal, or at least could be interpreted as illegal but, as ever, the law is a spider web which catches the weak while the powerful push straight through. Regulation and enforcement is light touch or non existent.
Britain is the ultimate rentier economy at the moment and all but a priveliged few are worse off because of it.
I absolutely agree, except for "Britain is the ultimate rentier economy".
But what should be done ? Let the weak through the spider web ? Punish and vilify those contributing less than if regulation was better ? Or make regulation better to reduce monopolies ?
These days, if you define "millionaire" as a household net worth of £1million+ then it's not even a big deal to be a millionaire anymore. Off the top of my head, I don't think you'd even make the top 10% anymore never mind the 1%.
https://www.resolutionfoundation.org/app/uploads/2020/12/The-UKs-wealth-dis...
Some graphs on about p12 of the attached. I have not looked at the method at all but it would seem to suggest £0.8m is the minimum wealth to get into top 10%, a figure which is fairly flat until you get to the top 2-3%, with a minimum of £2m to get into top 1% - but with a mean within the top 1% of over twice that, driven I assume by the skew upwards of the top 0.1%
As per the caption to that graph, that is per adult per family. So really we’d be talking about well over 1million for top 10% household income.
A good point, although I think you mean wealth not income.
Appendix C seems to provide the household level figures which look to suggest less than double the adult level i.e. an average of slightly less than 2 adults per household. Looks to be about 1.3m to get into top 10%?
Oops, slip there! Yes, that would seem about right I suppose. Thanks for linking it - quite an interesting read.
Well fair enough, to be honest I don’t know enough about real world monopolies to put up any real defence of them other than to say obviously the illegal ones ARE illegal and I wouldn’t try to defend them anyway.
With the ‘legit’ ones perhaps there’s a bit of a gray area but I don’t know enough to say, I’ll take your word for it that they’re anticompetitive in a legal way that restricts other businesses and bring about a lot of the other negative consequences you mention.
My experience is in running a small business for more than 10 years and seeing other small business owners going from ‘nothing’ to millionaire status. Generally speaking it’s a hard road with a ton of personal sacrifice and always ensuring everyone else is provided for before you get paid yourself. I wouldn’t say I’ve got there myself yet despite doing fairly ok during my time but I know lots of others economically connected to my business have done very nicely. I’d say the typical self made millionaire literally has to put others before themselves to get there - there’s no walking over others involved if you want to stay in the game.
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