Billionaires Horrible at Managing Money
A new study finds that the majority of people who were billionaires in 1995 are no longer billionaires. What happened, billionaires???
Bloomberg reports on a new UBS survey of what became of the 1995 class of the world’s richest people:
More than half, or 56 percent, of people with at least $1 billion in net worth in 1995 were not in that bracket as of 2014, the study said....
Of the 289 billionaires in 1995, 126 remain in the group. Of the 163 who dropped out, 24 saw their wealth diluted among family members, 66 lost it to death and taxes, and 73 saw fortunes decline due to business failures and other issues, the report said.
How hard is it to remain a billionaire once you already have a billion dollars? Well: ten dollars invested in 1995 in an extremely simple 60% stocks/ 40% bonds portfolio (the world’s simplest portfolio, and one that can be constructed for free with no advice from high-priced money managers) and left untouched would be worth $54 today. That means that a billionaire in 1995 could have invested his money and with absolutely no effort be worth $5.4 billion today. Yet somehow, even if we leave out those who split their wealth among family members, nearly half of all billionaires still managed to lose money in the past 20 years.
Remaining a billionaire when you’re already a billionaire is the world’s easiest job and still you motherfuckers couldn’t manage to get it right. Piketty is ashamed of you people.