
The Billionaire Next Door (2007) - non_sequitur
https://www.dmagazine.com/publications/d-magazine/2007/march/the-billionaire-next-door/
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chychiu
"His net worth isn’t something he says he ever thinks about. “I don’t waste
time on it. Because at the end of the day, it’s a theoretical number that has
no relevance. It’s not as if we have a bank account full with all that money
and liquidity. I’m sorry, it’s not cash. It’s assets that are necessary so
that people can do their jobs."

I wish more people can see it that way instead of touting the successes of
billionaires just by virtue of their theoretical net worth

~~~
hn_throwaway_99
I think that's silly. A sizable portion of my net worth is my home equity, and
thus I could say "Because at the end of the day, it’s a theoretical number
that has no relevance. It’s not as if we have a bank account full with all
that money and liquidity. I’m sorry, it’s not cash. It’s assets that are
necessary so that I can live somewhere."

While I guess that's _somewhat_ true, it's not a "theoretical number", and
there is a very straightforward way to turn that into cash if I want (of
course, I'd have to find somewhere else to live). The same is true of this
billionaire's net worth.

~~~
mikestew
_The same is true of this billionaire 's net worth._

No, because while you own your house, the billionaire owns every house on the
block. What happens when all of those houses get liquidated at once? First,
local market is flooded, they no longer hold their original value. More
importantly, and the part of the quote you left out, is that in this analogy,
the houses can no longer be rented and a revenue stream dries up.

So no, it’s nothing at all like your home equity.

~~~
elsewhen
his net worth is calculated by taking his share of the FMV of the assets he
owns. presumably, he could sell his share of the company to a buyer and he
would then become liquid.

~~~
furyofantares
> he could sell his share of the company to a buyer and he would then become
> liquid.

What buyer? At the time of the article, he's #79 on Forbes, so there's only 78
potential individual buyers here and they're probably all in the same pickle
so far as getting liquidity.

Maybe you're thinking of a merger with some other company. How many companies
had 7 billion dollars in liquid assets in 2007 and also thought owning FEV
would be the best use of that money? I'm thinking not many, but I really don't
have any idea.

~~~
growt
He doesn't have to sell to an individual. I'm sure there are a lot more funds,
banks and companies with more then that amount of money around. Also he
doesn't have to sell to a single entity, but can sell shares to the public
market. That said, it still wouldn't be easy and probably tank the market
value of his companies.

~~~
furyofantares
> That said, it still wouldn't be easy and probably tank the market value of
> his companies.

Right, my read is that this is what makes the number theoretical

~~~
empath75
His company has value. As long as he didn’t dump all the shares at once he
could surely unwind his stake to the market. We’re not talking about bitcoin
or beanie babies here. There’s an underlying asset.

~~~
furyofantares
Sure there’s no doubt about that, but the context is that this dude doesn’t
spend a lot of time thinking about his net worth and folks here are somehow
judgemental of that

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dependsontheq
In general this is quite common in Germany, there are still many family
companies and the heirs often work outside the business before returning to
the family company.

Herzogenaurach his hometown is an interesting case for everybody who is
interested in the weird ways of entrepreneurship. The small town is home for
Schaeffler, Adidas and Puma. Quite remarkable for a population of 30.000.

Disclaimer: I live next door and organize the Nuernberg Digital Festival

~~~
bopbop
Some background on the Adidas/Puma rivalry, which is quite a fascinating
story:

[https://sports.vice.com/en_us/article/mgz97b/the-nazi-
siblin...](https://sports.vice.com/en_us/article/mgz97b/the-nazi-sibling-
rivalry-that-divided-a-town-and-created-modern-sportswear)

------
karaokeyoga
Related: [https://www.propublica.org/article/ultrawealthy-taxes-irs-
in...](https://www.propublica.org/article/ultrawealthy-taxes-irs-internal-
revenue-service-global-high-wealth-audits)

~~~
hudibras
The link is a story from this week about how this guy dodged paying $1.2
billion in personal income taxes to the IRS.

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isaacn
He sounds like a reasonable and introspective person (at least that is the
impression I got from reading the article). It's a good reminder that
Billionaire's are people too, with all the same hopes, dreams, and
insecurities that many of us non-billionaires have.

~~~
gowld
Or it's PR for his tax evasion case:
[https://www.propublica.org/article/ultrawealthy-taxes-irs-
in...](https://www.propublica.org/article/ultrawealthy-taxes-irs-internal-
revenue-service-global-high-wealth-audits)

------
moneywoes
I wonder if he'll be able to retain his family's wealth. I remember reading
that wealth is not retained really well in rich families.

~~~
skookumchuck
That also runs counter to the popular narrative that wealthy families only
grow wealthier.

~~~
jessaustin
The children of billionaires (like this guy) are, on average, wealthier than
the children of truck drivers.

~~~
jumbopapa
This is true, but at the end of the day most wealth created in the US at least
is first generational. It's not uncommon for a family fortune to be lost in
2-3 generations.

~~~
yardie
I can think of not a single family who started out wealthy and lost it all.
What's far more common is dilution of wealth. Start out with $100mm, split
that 10 ways through inheritance, then split that again, and again. The
Rockefellers, Carnegies, Mellons and Westinghouses still exist, just under
many different surnames.

~~~
jumbopapa
Most families never reach that level of wealth. It's obviously going to be
different for the top .001% of wealth.

~~~
yardie
If you start out even with $100k inheritance you're pretty far ahead already.
That's enough to get an education, buy a home, or start a business. If you can
turn that $100k into $1mm you can draw off $35k for the rest of your life
without lifting a finger.

Having modest savings and being in good health makes you much closer to wealth
than if you were further down the economic chain.

