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Sunday, January 28th, 2018

Here’s What a Billionaire’s Budget Looks Like Compared to the Average American

Author:     ANDREW D. HWANG
Source:     Money/Associated Press
Publication Date:     January 24, 2018
 Link: Here’s What a Billionaire’s Budget Looks Like Compared to the Average American
Stephan:   The Davos conference has made me think more than usual about the wealth inequity that is plaguing the world and, particularly, America. As I read the social outcome data it seems clear that capitalism with profit as the only social priority ultimately implodes. And, with the Nordic countries and a couple of others excepted this is the process we are living through. Part of the reason I think this is tolerated is that people really don't see the differential in life styles. Here's one take on the scale.

The world’s wealthiest are prospering. As of February 2017, there were about 2,000 billionaires in the world. This micro-elite controls over US$7.6 trillion, an increase of 18 percent from 2016.

A billionaire’s spending power is difficult to grasp, both because most people do not correctly intuit large numbers, and because a billion dollars far outstrips most people’s experience.

What does a household budget look like to a billionaire? To find out, let’s scale down a billionaire’s income to $50,000, the median American income, adjusting budget items proportionally.

A year in the life of Joe Billionaire

To start, we need to estimate a billionaire’s annual income.

In the 30 years from 1987 to 2016, Bill and Melinda Gates amassed about $120 billion. This figure represents $80 billion in net worth and $40 billion controlled by their charitable foundation. The Gates’ average annual income for these years is $120 billion divided by 30, or $4 billion. (The Bill and Melinda Gates Foundation is a strategic partner of The Conversation US and provides funding for The Conversation internationally.)