This afternoon I found myself watching a “Lifestyles of the
Rich and Famous” type show that glamorized the material buying power of a
handful of billionaires around the world. From the humble, almost embarrassingly
small fortunes of dot-com entrepreneurs (~ $3B) to Saudi Royalty (~$20B) to the
Gates and Slims of the globe ($50B+), there was seemingly no end to the thought
and creativity put into spending those hard-earned, or more commonly
hard-inherited, piles of cash. So I got to thinking: What would the
proportional equivalent of my last five transactions be had I the wealth of a billionaire?
That is to say – if I spent 0.01% of my net worth on a cup of coffee, how many
dollars would that be if I were mega-ly rich, and what could I have bought
instead?
Maths:
First off I need some numbers: Prices of things I bought; a value
assigned to me; and a comparative billionaire’s value. Let’s do the easy part
first.
In chronological order, most recent transaction on top,
these are the last five purchases that I made with my check card. They are typical
prices for a variety of products and services with regular (daily, weekly,
monthly, or yearly) reoccurrence. Fair game for a fun comparison.
Coffee Shop - $12.83
Car Wash - $15.00
Dinner Out - $40.00
Soccer Cleats - $111.00
Hair Cut - $30.00
Now for the tougher, more variable numbers: What value
should I assign to myself? I have options.
- Cash on hand
- Net worth
- Income reported for 2012
- Income percentile for Americans
And while we’re on the subject of defining value, what makes
a Billionaire in this sense – aside from having at least a thousand million
dollars? Again, lots of options.
- Having exactly $1B
- Average Billionaire’s wealth
- Average American Billionaire’s wealth
- Average cash liquidity
I’m writing this crap so I get to choose. We’ll use what
might currently be in my bank account against the net worth of the “Average
American Billionaire” so we come as close to buying power apples to buying
power apples as possible.
So let’s say I’ve got $20k cash in my checking account (I
don’t, but let’s say I did). And let’s use Forbes’
March 13 article that says the average American billionaire has a net worth
of $4.2B. As an equivalent percentage of my newly found billions, this is what I would have
spent between yesterday and today:
Coffee Shop - $2,694,300
Car Wash - $3,150,000
Dinner Out - $8,400,000
Soccer Cleats - $23,310,000
Hair Cut - $6,300,000
So, how would I have done it? Let’s start at the top.
Coffee Shop Budget:
$2.7M (.064%)
Coffee and a sandwich? No sir; coffee plantation is the new name of the game. Looks
like .064% of my wealth is good for about 812 acres of prime Costa Rican coffee
country, which just so happens to be currently
available for a cool $2.4 million dollars. Add a few hundred grand for
machinery and labor and I’ve made my first purchase of the day. Incidentally,
this is a working farm, which means it’s an investment that will pay dividends.
If my calculations are correct, and they almost certainly are not, this farm
could begin to pay me back in a big way in fewer than ten years.
Car Wash Budget:
$3.1M (.075%)
Surprisingly, or maybe not, $3.1M will not buy any car in
the world. There were a handful of new models released this year eclipsing that
sum, to say nothing of the vintage and classic machines selling for ten times
or more what the car budget is. So discretion is advised. I choose the Lamborghini Sesto Elemento. It sets me back $2.9M so I should have enough left over to get
it washed. Alternatively I could buy three
of these, if the muse descends. Now, for the real me, the me with a few
grand in the bank, a car wash is quite literally pocket change. As soon as I
have too many quarters in my cup holder to turn a corner quietly, I wash my
car. So to be clear; buying three Bugatti Veyrons to the Average American
Billionaire is about as impactful as a Normal washing his car.
Dinner Out Budget:
$8.4M (.200%)
Dinner – it was good, it was Indian. So can I buy an
Indian? I feel like that’s what a billionaire might do. I asked Google but got mixed
results. I know for sure I can pay an
Indian, if not purchase one outright. And by one I mean a fucking army. English
speaking live-in housemaids with good hygiene and a familiarity with Western
foods (there are dozens of expat blogs that speak to these things – their words,
not mine) can earn 120,000 Rupees (~$2,000) per year. IT professionals with 10+
years experience can earn 1,200,000 Rupees (~$20,000) per year. I think a good
mix within that range would be beneficial. So if we expect an average salary of
500,000 Rupees ($8,400) per year, I could have a staff of 1000 Indians. Not
sure what I want them doing just yet, but that’s fine. How does the Margaret
Mead quote go? “Never doubt that a large group of Indians can change the
world; indeed it’s the only thing that ever has” or something like that.
Soccer Cleats
Budget: $23.3M (.555%)
Didier Drogba. He’s a striker who plays for Chelsea. He’s
the 20th most highly paid soccer player in the world and I don’t
like him. And I don’t like Chelsea. I would buy Didier Drogba for two years and
bench him. Nobody said I had to use my powers for good.
Hair Cut Budget: $6.3M
(.150%)
The most expensive hair cut I could find was like $30k,
and that was only because the salon dude was flown to the Middle East on a
private jet so he could cut a Sultan’s hair. From a fashion perspective, the
watch I want is like $3k, suits seem to top out at $120,000, shoes stop around
$2k, and even a billionaire shouldn’t be paying much more than $200 for jeans.
There was a Victoria Secret bra that sold a while back for $12M, but that’s
outside the budget and probably wouldn’t fit me anyway. So I’m at a bit of a
loss. I could probably spend $300k on clothes, but I’d still have another $6M
left over. I guess it doesn’t have to stay in the realm of fashion, but I may
need some help with the last few dollars. Any ideas?
