Monthly Archives: July 2017

How much is one billion dollars?

… or one billion of anything, for that matter. For the sake of this discussion, I’m going to talk about one billion dollars, so you can get some idea of what we’re talking about when we’re talking about the 1%, and billionaires.

First, lets forget about investment income, or interest on your $1,000,000,000 dollars. Let’s say you have 70 years to spend the principal, with no interest. In 70 years, there are about 25,550 days, not accounting for leap years (365*70), so you would need to spend $39,139/day, or about $1600/hour, 24 hours/day, 7 days a week.

However, you’d be kind of stupid if you didn’t put your money into an interest earning savings account, while you’re busy spending $40k/day. It turns out, that you’ll end up leaving more than a billion to your heirs, because, at a meager 2% interest, you’ll earn $54,794.52/day. Yes, I said “per day”. If you go back to your ambitious goal of spending $39,139/day, you won’t actually be spending the interest, and your account balance will continue to grow, earning even more interest, as the principal accumulates.

So, if you’re a reasonable person, with reasonable needs, you couldn’t even spend the interest on a billion dollars unless you took on some very expensive hobbies, like colonizing Mars.

In case those numbers didn’t sink in, a billionaire makes more in a day on interest than the average American makes in a year. It’s no wonder they find the spare change to wine and dine your government representatives and convince them to cut them a break on their taxes and take away Medicaid from millions of struggling Americans. Because, well … they really need a tax break.

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