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Tuesday, August 5, 2014

$685.29 Billion Net Worth Among 50 people

We recently discovered a website that listed the wealthiest individual who resided in each US state..

You can go to it Here

Most of the names on the list most have never heard of but the most famous were the evil Bill Gates being the richest person in Washington state as well as the entire US ($80 billion) and Phil Knight, founder and CEO of that horrible company Nike being the richest in Oregon ($19 billion)

Interestingly, three people are the wealthiest of their given home state thanks to a wonderfully generous Dad named Sam Walton, founder of Wal-Mart who passed away some time ago
They are Jim Walton in Arkansas ($35.7 billion), Alice Walton in Texas ($35.3 billion) and Christy Walton in Wyoming ($37.9 billion)

Walton gave his children an inheritance rather than making some abstract point of working when one doesn't need to, like Warren Buffett who plans on denying his children any part of his estate ($63.1 billion) when he dies..

The most interesting part of the list is the total..

$685,290,000,000

50 people possess $685.29 Billion
Now how many HDTVs and iPads will these 50 purchase within the next 12-36 months?

It will never ever be the super wealthy that stimulate and sustain a national economy..  They simply do not possess the numbers

Generally speaking, the 1% possess fiscal traits when it comes to money that most others of lower education and economic strata do not:  They put great importance on savings, spending is usually not done frivolously but for purpose of creating a greater return and they're contented inside..

How many billionaires and multi-millionaires are glued to QVC and HSN?  How many buy the next 'best' gadget or doo-dad simply to keep up with trends or their friends?
How many ultra wealthy do you see standing in front of a Target on Black Friday in the freezing cold at 5a waiting for the doors to open so they can stock up on $5 toasters?

It is the everyday person and their inability or unwillingness to save which allows this and all global economies to function.

We understand that 'wealth redistribution' is a super-naughty term which conjures up visions of Marx, Lenin and people standing in long lines in the cold to buy toilet paper, but just follow us a moment...

If $685.29 billion was divided up among every American, it comes to a little over $2175 per person..
And if every one received a debit card for that amount to buy whatever he/she wished, how many HDTVs or iPads do you think would be sold now?

And now you have money that is circulating.. its fluid.. its creating growth..  and its being taxed instead of lying dormant in 50 individuals' bank accounts.

The biggest problem we have as people is we admire and respect the super wealthy too much..  We don't take the time to pick up a calculator and really see how grotesque their wealth possession is..

Some people honestly believe an individual has a right to make as much money as humanly possible and its no one else's business
That is a nice philosophical and academic argument, like saying a person has a right to do anything they wish to their body or with another as long as there's consent and no one else is harmed..

And yet that's not reality..

An economy functions when people make enough to buy the things they need and want, and in turn the businesses profit enough to keep or expand hiring while providing the wages allowing people to buy..

This basic principle got screwy when the ease of personal credit was introduced first in the 1920s and then re-introduced via credit cards with longer devastating effect in the 1980s
Now people could buy whatever they want while wages could stay stagnant and job creation halted and everyone believed tomorrow, all would work itself out splendidly..

And thanks to the stock market and 30+ years of Fed tampering, the wealthy accrued more and spent less in the real economy.

If you made $75k a year in a job from the time you were 18 until you retired at 73 (55 years), your total income before taxes and expenses would be $4.125 million
That is less than 1/2 of one percent of the least wealthy person in the list of wealthiest individuals by state (Robert Gillam of Alaska valued at $700 million)

Better (or worse yet) if you made $1 million every year of those 55 working years, that comes to obviously $55 million and you still have not earned near 10% of the total wealth of Mr Gillam, much less those like Buffett, Gates and the Wal-Mart Kids

There should be no admiration toward the super-wealthy..

None.