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PROPHET SIMMONS & FAMILY

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    Where Do Millionaires Keep Their Money? 10/11/2013

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    Where Do Millionaires Keep Their Money? 10/11/2013 Empty Where Do Millionaires Keep Their Money? 10/11/2013

    Post by Admin Fri Oct 11, 2013 10:04 pm

    Where Do Millionaires Keep Their Money?

    10/11/2013


    SPECIAL AGENT GIBBS WHERE DO MILLIONAIRES KEEP THEIR MONEY? 10/10/13

    New post Cindieloohoo Today at 11:28 pm OOM & F CHAT

    [..SpecialAgentGibbs] Where do millionaires keep their money? In the sense that FDIC insurance only covers $250,000 at the bank and SIPC only covers $500,000 at the brokerage.

    I mean, I can’t see Bill Gates putting $250,000 at thousands of banks across the country, nor can I imagine Lou Simpson’s net worth getting wiped down to half a million because of a bankrupt Scottrade. Ha!

    So when people accumulate millions, what becomes the “safe spot” to keep it?
    .
    [..SpecialAgentGibbs] First, you have to realize that “money” in one sense doesn’t exist. It is an idea. If you are talking about the green pieces of paper the Treasury department prints, there is only about $575 billion in circulation yet household assets in the United States are valued at more than $50 trillion.

    [..SpecialAgentGibbs] Think about that. If you owned every single United States dollar bill in the entire world, you would only have 1/100th of the estimated household net worth in the United States.

    The reason: Those greenbacks are merely an exchange mechanism. They represent something that people can trade to signify a claim check on society. In and of themselves they have no value.

    We could have just as easily chosen sea shells or jars of strawberry jam.

    The reason societies have preferred gold and silver over time is they are difficult to mine, so it is very hard for governments, politicians, kings and presidents to make the currency worthless by printing more paper.

    [..SpecialAgentGibbs] The result is that most wealth isn’t held in the form of cash. In fact, I think of money as being held in seven distinct forms (there are more but these are the major ones):

    [..SpecialAgentGibbs] 1. Business ownership (stocks). If you own a chain of dry cleaners that makes $1 million a year in profit, you could probably sell the company for between $10 million and $15 million. You don’t have that money “sitting” anywhere, but it is yours nonetheless.

    [..SpecialAgentGibbs] 2. Money they have loaned and must be repaid to them in the future such as bonds, certificates of deposit, money parked in bank accounts, and money invested in money market funds,

    [..SpecialAgentGibbs] 3. Real estate, such as hotels, apartments, stadiums, homes, storage units, bridges, etc.

    [..SpecialAgentGibbs] 4. Commodities such as gold, silver, platinum, corn, cattle, mineral rights, oil, natural gas, sugar, coffee, etc.

    [..SpecialAgentGibbs] 5. Nominal currencies, such as United States dollars, Euros, Yen, and British Pound Sterling stuffed in envelopes or briefcases.

    [..SpecialAgentGibbs] 6. Intellectual property, such as ownership rights to famous songs, books, movies, and photographs.

    If you owned the rights to Star Wars, you could have no money in the bank but the truth is, you are probably a billionaire because you could sell those rights to a lot of interested investors; they, in turn, could create new merchandise and products and make money from it, which is why they are willing to pay you.

    Brand names are a huge source of intellectual property value, such as Coca-Cola, Clorox, Wrigley, Hershey’s, and Folgers.

    [..SpecialAgentGibbs] 7. Tangible property, such as famous paintings, historical artifacts, rare books, etc.

    If you owned an original, signed copy of the Declaration of Independence, you could convert it into any other form of wealth you wanted, such as nominal currency, which you could then use to transfer your wealth into real estate, or commodities, or any of the other categories.

    [..SpecialAgentGibbs] That means that most of the time, someone with substantial net worth doesn’t need to park their money in a checking account.

    You couldn’t steal Bill Gates’ $50+ billion from him because it isn’t money in a briefcase; it is office buildings, shares of stock, railroads, book copyrights, personal real estate, private jets, rare art … the list is endless. Don’t Think of “Money” As Being Cash




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