AskI’m talking about those people on the Forbes list among others. So let’s say Bill Gates — does he have a bank account that shows millions of dollars as its balance? So what’s the reality?
Answer:
First, the extremely wealthy will always have businesses, real estate, jewelry, art, investments, etc. which makes up the bulk of their net worth.
A person with 1 billion net worth may only have 100 million in his bank account, and the rest in forms mentioned above. And if managed correctly, these assets generate more cash for them regularly.
Moreover, the ultra wealthy also usually have a family office where they hire investment, CPA and legal experts to help them manage their financial affairs. This office will also pay their bills, collect checks, seek out investments, manage philanthropy–pretty much anything which the family needs done.
Finally, it is important to note that wealth is usually not held in the individual’s personal name. Trusts or business entities are more common. These legal entities will grow the wealth and pay the individual some sort of cash stipend every month (like an income).
It is very likely that Bill Gates’ personal net worth is significantly lower on paper than what is reported. Of course, that is because his entities, etc, will own his wealth on his behalf.
Tags: banking, Bill Gates, personal finance, ultrarich
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