An average individual like you and I pay for things using credit cards, debit cards, or even cash. It is expected. But what about those who have huge net worth like Jeff Bezos, Elon Musk, and Mark Zuckerberg? How do these people pay for things? Do they use a special method other than the ones we use? Or do they just stick to the usual methods?
Most billionaires pay for things using their credit or the passive income from their investment. If they need money for kind acts, they often use cash from their company or via an established non-profit organization.
If you have wondered how wealthy people like Elon Musk and Co pay for things, here is a good opportunity to quell your curiosity. Below I have highlighted a few things about billionaires, including how they pay for things.
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How Do Billionaires Pay For Things?
Before we proceed, let’s understand who billionaires are first.
What Is a Billionaire?
The word billionaire is quite common, thanks to the wealth and fame that comes with the tag. If you plan to become a billionaire someday, or you wish to know how these unique individuals pay for their stuff, it makes sense to first understand the term billionaire.
Billionaire refers to a person with assets or a net worth of at least one billion currency units in their local currency like dollars, euros, or pounds. Billionaires are very wealthy, with assets like cash and equivalents, real estate, and business and personal property.
These persons are usually graded each year by Forbes, a popular American business magazine, which first began gathering lists of the world’s richest in 1987.
Having understood what a billionaire is, let delve into something more exciting. Below, we’ll take a brief look at some of the most popular billionaires that exist.
A Quick Insight Into the World of Billionaires:
Based on findings by Forbes, the United States has the most billionaires worldwide, with a total of 724. Asian giants, China, are second with 626 billionaires. India is third with 140 billionaires, while Germany (136 billionaires) and Russia (117 billionaires) occupy fourth and fifth positions.
Tech guru, Elon Musk, sits on top of the list with a net worth of $272.8 billion. Jeff Bezos, founder and ex-CEO of Amazon ranked the second-highest on Forbes’s list with an overall net worth of $177 billion. Forbes’s real-time billionaire list places his fortune at around $202.3 billion as of December 7, 2021. Amazon (AMZN) raked in a whopping $386 billion in revenues and $21.3 billion in gross profit for the 2020 fiscal year. Aside from Elon Musk and Jeff Bezos, two other Americans are on the top five list. These Americans include Microsoft’s Bill Gates with $124 billion, including the founder of Google, Larry Page, at $125.6 billion.
Readers can separate names on the list by country, industry, including age group. For example, Lukas Walton was considered one of the youngest billionaires, ranking 121th with a net worth of $16.3 billion. He is the grandson of Sam Walton, founder of Walmart (WMT). His dad, John, passed away in a tragic plane crash, leaving the then-19-year-old much of this wealth.
George Joseph, who established an insurance company, was the oldest on the list at 99, with a net worth of $2 billion. The richest billionaire woman, based on Forbes, is Zhou Qunfei and Family from Hong Kong. The family deals in phone screens, and they have a net worth of $11.1 billion.
What Do Billionaires Do With Their Money?
Have you ever sat down to imagine what billionaires do with their money? Do they buy islands in the Bahamas or Fiji? Or do they spend it on luxury cars and women? If how these folks spend their billions has always been a mystery to you, this piece would help.
So what do billionaires do with their money?
When it comes to investment techniques, self-made billionaires were more likely to add equity investments, while those born with a silver spoon typically had more real estate investments, based on the study. Diversifying those investments is important among several billionaires.
Billionaires don’t lavish money. Instead, they put it in several places, including their main residence, mutual funds, stocks, and retirement accounts. These unique individuals concentrate on putting their money where it will grow and not remain stagnant. They are often careful not to invest a huge amount of money into items that will depreciate over time. A car for daily transportation. For instance, it will most likely lose value as time goes by.
The key for most billionaires is to save money before spending it. Regardless of how much their yearly salary may be, most billionaires put their money where it will rise, usually in stocks, bonds, and other stable investments.
Many of us expect billionaires to pay for things using some sort of super-cool means. After all, these folks don’t spend small like us, so the method they use to pay for stuff should be different, right? Wrong!
You see, most billionaires pay for things through credit (for personal items) while they use the passive income generated from their investments to settle debts (if they have any). If it is a business expense or acquisition, they may sell off some of their shares if their wealth is derived from the shares of a publicly traded company. An instance of this is the well-known Jeff Bezos selling off a billion in Amazon stock a year to fund his space exploration company Blue Origin. If a billionaire’s wealth is derived from real estate, he may sell some properties as required.
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What Do Billionaires Buy?
An average individual buys typical foodstuff for home, a few appliances, and other affordable stuff they need. But what about billionaires? What do these wealthy individuals buy with the money they have?
Billionaires invest a huge chunk of their money. They also buy luxurious stuff like houses, private jets, cars, yachts, islands, and other fancy stuff.
Most billionaires would invest more of their money and spend less on fancy stuff.
