
Ask HN: Why aren't there any families with a trillion dollars in assets? - a3voices
If you graphed out family fortunes, it would resemble a power law function (similar to monthly website hits). But I&#x27;m wondering why none go higher than the $100-$200 billion range. Is it because Western society hasn&#x27;t been stable for a long enough period of time?
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ssivark
The size of a family grows exponentially with generation. Assuming a young
couple. In 3 generations (~70 years) the family size would have become close
to 10x. More often than not, wealth is divided among extended families. So, to
maintain per-capita wealth, the initial pool would need to grow at a matching
rate by 10x in 70 years -- which is an annual growth of roughly 3-4% (in real
value, i.e. over-and-above inflation). Otherwise, wealth will simply be
diluted exponentially, apart from getting consumed/expended. (Unless at every
step you manage to keep marrying rich)

If you start with a large amount of wealth, achieving such a growth rate (3-4%
per year, in real value) is no mean feat.

1\. For starters, one cannot depend on "employment" which has a relatively
small return. You need to find a way of earning money on your capital.

2\. The political and societal conditions might not be conducive. The
person(s) in the zeroth generation might have been lucky in many ways. This
relates to the idea raised in the OP above.

3\. People growing up in wealth might not have the skills, or the luck.

4\. Or they might not have the desire. They might prefer to move higher along
Maslow's hierarchy once the lower level needs are met. To quote John Adams: "I
must study Politicks and War that my sons may have liberty to study
Mathematicks and Philosophy. My sons ought to study mathematicks and
philosophy, geography, natural history, naval architecture, navigation,
commerce, and agriculture, in order to give their children a right to study
painting, poetry, musick, architecture, statuary, tapestry, and porcelaine."

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ramoq
Actually I believe the House of Saud aka Saud Family (in Saudi Arabia) has a
well known estimated net-worth of over 1.4 Trillion.

Source:
[http://en.wikipedia.org/wiki/House_of_Saud#Wealth](http://en.wikipedia.org/wiki/House_of_Saud#Wealth)

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josephschmoe
That's about 15000 people.

15000 people in the 99%-99.9% would have about 120 billion. 15000 people in
the 99.9%-99.99%? They'd have about 600 billion. The top 0.01% has about 6
trillion.

So, it's a family of 15,000 99.97%ers!

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glbrew
Well this probably isn't what you are looking for but the Saudi family (of
Saudi Arabia) is worth "well over $1.4 trillion." That is spread out between
an extended family.

[http://en.wikipedia.org/wiki/Saudi_family#Wealth](http://en.wikipedia.org/wiki/Saudi_family#Wealth)

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MrBlue
The Rothschilds
[https://en.wikipedia.org/wiki/Rothschild_family](https://en.wikipedia.org/wiki/Rothschild_family)

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chatmasta
This. Interestingly, I was just reading on this topic the other day. Many
sources (see Wikipedia article) suspect/assert that the Rothschilds are worth
somewhere in the trillions. Since that's more than the GDP of most countries,
it fuels a lot of illuminati/"new world order" conspiracy theories. With that
kind of wealth, one family has the power to manipulate international markets.
By coupling that manipulation with timely investing, the Rothschilds can
multiply their fortune indefinitely.

Honestly, neither the idea that they control trillions+ nor that they are
manipulating markets, seems that far fetched to me. Their family has multiple
dozens of individuals spread throughout the world in financial roles, some of
them visibly managing billions of dollars in assets. They've controlled their
wealth far longer than transparency laws have had any real effect, so it would
not surprise me at all if combined, they controlled trillions of dollars.

If you've got a family who all knows each other, meets up multiple times per
year, and controls trillions of dollars, what do you think is going to happen?
Obviously their loyalties all lie to each other, not individual countries. I
imagine their family retreats include more than a few "back room meetings" of
the most powerful members, where they openly discuss their assets and
strategize how to use them to their advantage.

It's not hard to imagine a small group of people controlling that much money
becoming hungry for power and influence. It's a scary thought, but the world
seems to be doing fine so far, so I'm not too worried.

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patrickdavey
How do you know what assets these families have? Most of them I'd imagine
would have assets so wrapped up in opaque trusts in secrecy jurisdictions
(Caymans, British Virgin Islands etc.) that I can't see how you'd ever really
know.

For a very interesting read on the above, check out
[http://treasureislands.org/the-book/](http://treasureislands.org/the-book/)
... a fantastic read.

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sien
Exactly this. There is an article about how the super rich in Germany keep
very quiet.

Wealth lists are only on what people can find and often exclude royalty.

[http://www.bbc.com/news/magazine-28472884](http://www.bbc.com/news/magazine-28472884)

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GFischer
Plenty of people not in those lists have laughed at them - many have reasons
to lie low, others count as their fortune assets managed by family, retainers,
figureheads and frontsmen.

I know the list for my country (Uruguay) is wildly inaccurate, and have no
reason to believe that it's different in other countries - possibly in the
U.S. they're more open, but not in the Middle East, Brazil, Mexico, China or
Russia.

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grimtrigger
There's a saying my mom used to say: "money never makes it past the third
generation". The idea is that if you grow up wealthy, you don't have the
skills/drive necessary to keep that wealth going.

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ArkyBeagle
"Shirtsleeves to shirtsleeves in three generations".

I always took that as an estimate of the lifespan of a firm. If that firm
lasts beyond that, it's been reengineered to be relevant.

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webmaven
I always heard that as "rags to riches to rags in three generations".

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ArkyBeagle
That too :) Either is nicely snappy.

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cellis
The Waltons may only be worth 1/10-12th of that, but they sure as hell have
control over a nearly half-trillion dollar revenue corporation. At that scale,
what matters more is direct influence over the lives of the many,i.e. _power_
, not fiat dollars that can be pressed up and dilute you arbitrarily if need
be.

"You may have all the money Raymond, but I have all the men with guns." ~
Frank Underwood

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ArkyBeagle
"Control over" maybe, but the thing is on rails. And some dilution: there are
five years since 1992 where CPI ( which has a reputation for overstating
inflation ) is over 3%:
[http://www.minneapolisfed.org/community_education/teacher/ca...](http://www.minneapolisfed.org/community_education/teacher/calc/hist1913.cfm)

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eruditely
The primary issue with the question is the "Why" part. This would imply that
there was some reason if there wasn't. This implies some form of soft
historicism, or some agency.

There is not _why_ , there is only there is/not. Why would make sense in some
novel case statements.

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nicholas73
Rockefeller's Standard Oil split off into most of the major US oil companies
today. With shares spread through family members, foundations, and diversified
into other companies, it's not inconceivable that they are massively more
wealthy than a Forbes list member.

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josephschmoe
The answer is very simple: As total investment increases, return on investment
trends towards a stable average. Inheritance tax takes care of the rest.

This is why we as a society need inheritance tax. It prevents dynastic wealth
from taking over.

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sixQuarks
Mubarak's family was estimated to have hidden $700 billion in assets:

[http://www.forbes.com/sites/clareoconnor/2011/04/11/egyptian...](http://www.forbes.com/sites/clareoconnor/2011/04/11/egyptian-
estimate-of-mubaraks-wealth-soars-to-700-billion/)

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argonaut
How do you know there aren't any families with a trillion dollars in assets?
Wikipedia? ;)

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wintersFright
yes, having incredible wealth would draw a lot of unwanted attention. The
Rothschild's had their wealth confiscated at least once through
nationalisation of banks they owned.

It's best to lie low and disguise crazy wealth as much as possible.

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sixQuarks
The truth is, we don't know who the richest family is. It was revealed that
Egypt's ousted dictator had about $100 billion in assets stashed away. That
would make him the world's richest man. How many others are out there and how
much are they hiding, who knows?

