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Money For Nothing

You Play the Guitar on the MTV

1 287

OOH…Here’s One Thing

by Jim Johnsen,
Managing Director, Johnsen, Fretty & Company

 

 

 

Money For Nothing

Let’s try something new.
Click on the link below to the song by Dire Straits and listen to it as you read.  

https://youtu.be/lAD6Obi7Cag    

So I had a surreal moment recently and it got me thinking.  I had the opportunity to do a fireside chat with David Rubenstein, the founder of The Carlyle Group, and another 50 people, a couple Mondays ago.  If you don’t know who he is you should google him.  He is quite the renaissance billionaire, having recently written “The American Story, Conversations with Master Historians”.  Given the recent euphoria (ehem stupidity) in the public markets, I thought I would give my Schwab account one more look just before he went on.  I then had a deep chuckle at my own expense as I realized the irony of me checking my plebeian account in front of a legit billionaire.  

Coincidentally, on a flight to Vegas the following day I read “The Gospel of Wealth According to Marc Benioff” in the January edition of Wired Magazine.  And that’s when it really sunk in.  Here are a couple quotes from the article that speak volumes:

“…one of civilization’s great challenges stems from millionaire rhyming with billionaire. In holding them in the same linguistic corner of our minds, we conflate them, yet they are so mathematically distinct as to be unrelated. A millionaire can with some dedicated carelessness lose those millions. Billionaires can be as profligate and eccentric as they wish, can acquire, without making a dent, all the homes and jets and islands and causes and thoroughbreds and Van Goghs and submarines and weird Beatles memorabilia they please. Unless they’re engaging in fraud or making extremely large and risky investments, they’re simply no match for the mathematical and economic forces- the compounding of interest, the long-term imperatives of markets- that make money beget more money.

Or, said another way, 

“A millionaire enjoys a profoundly lucky economic condition. A billionaire is an existential state”

This got me to thinking.  If no matter how much you spend, or as JC Clements used to say, no matter how mad you are at you money, it is impossible to spend even a fraction of it in your lifetime, then what’s your purpose and where do you expend the only thing that is finite, aka your time?  Interesting question right?  Particularly as we all strap on our battle attire for the week.  Well, not having any personal experience on this front, I did what most 20 year olds do (pun intended), I turned to Netflix.  Turns out, there is a show called “Explained” and an episode titled “Billionaires”.  I would say its worth the watch just to watch Mark Cuban (and Bernie Saunders to be fair) do what he does best…that is…sound like a tool.  But that aside, the episode has some interesting factoids like:

-Billionaires don’t represent the 1%.  The represent the 0.0001%.

-1987, there were 140 billionaires, worth $300 billion.  Now there are 2,153 billionaires worth $8.7 trillion (29x $s!).

-If billionaires got together and formed a country, it would be the eight wealthiest in the world

-They wield some crazy influence on the world’s political stage (NSS…maybe that’s why everyone wants to turn them into a dart board)

-First Forbes 400 was published in 1982, and originally included some sub-billionaires as there weren’t enough billionaires to write about

-In today’s dollars, Rockefeller and Carnegie are still dramatically more wealthy than the world’s richest man, Bezos ($146B)

-Global trade is leading the way in creating more billionaires

-By 2017 China was minting 2 new billionaires a week, and was second to only the U.S. with the number of billionaires 

-94% of billionaires are worth $10B or less.  (even those guys/gals worry about shrimp biscuit 🙂

-Per Abigail Disney, Roy’s granddaughter…”money just makes money…its like you put it in a room, close the door and it has sex and then more money babies grow”.

-Andrew Carnegie is famous for saying its a tragedy for a rich person to die with their wealth (easy for him to say since he had no chance of running out)

-200+ billionaires have signed the giving pledge, pledging to give away at least half their wealth

-Work is taxed at a much higher rate than ownership (dah, cap gains is lower than ordinary income rate…but when said like it just was…makes me wonder why work is taxed at a higher rate).

-Great quote at end “that nation of billionaires might soon be the richest in the world…and while their money might not live in one country, we’ll all live in theirs”

Alright Johnsen, now my friggin’ coffee is cold. 

What’s the point.  Well a few things. 

1. I am not sure why we are so pissed off at the billionaires.  True they are easy targets for the politicians, but do they really suppress us working men and women and do they really make us poorer? 

2.  If taxation is supposed to be a form of charity (i.e., collecting cash so that it can be redeployed for public good), wouldn’t it be more efficient to find more Bill Gates and to have them motivate the billionaires to voluntarily put more money to public welfare then to tell them we are coming to tax your arse?…and

3. perhaps we should all take a page from the billionaires’ book and spend more time worrying about the most precious commodity…time.

I struggled with whether to put Dire Straits “Money for Nothing” or Pink Floyd “Money” to this article.   Decided to save Floyd for something really good.  Cheers and Happy Monday.  

https://youtu.be/lAD6Obi7Cag    (wow there is nothing like that Mark Knopfler guitar…and yes there is nothing like “Sultans of Swing”)

”Money for Nothing“
Now look at them yo-yo’s that’s the way you do it
You play the guitar on the MTV
That ain’t workin’ that’s the way you do it
Money for nothin’ and your chicks for free”.      Dire Straits

p.s….read this in the WSJ on January 15.  “Britain’s royals are rich, but not extremely so, said David McClure, an author who has written about royal finances. “They are millionaires, not billionaires,” he said.”…and after writing this article, I now know what he means is their money is not big enough to have sex.  

Jim Johnsen

 

jfco.com
Securities transacted through StillPoint Capital Member firm FINRA/SiPC

 

 

 

 

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1 Comment
  1. Christie David says

    Jim, this was so fun!!! Money for nothing, and my chicks for free:) Loved this read, you have a great personality that comes through in your writing and I hadn’t ever thought about the public’s reaction to billionaires. You know what will happen if you put a bunch of crabs in a bucket? When one tries to get out, the other ones will literally pull them down back to the bottom.
    You are 100% correct. Time (and not hating on people ya just don’t know) should be our essential focuses.