The Netflix series called Explained is a goldmine of interesting ideas. Today I want to introduce you to Episode 2 of the 2nd season that is all about billionaires: Explained “Billionaires“.
Released on October 3, 2019 and still available, this documentary lasts about 20 minutes and is a valuable source of information on wealth, billionaires and how Forbes Billionaires list is made up.
Media overexposure leads us to think that some people are very rich, just because we often see them on TV, but the richest people in the world nowadays are creators, people who fueled the economy and our lives with new ideas.
Billionaires’ spending habits
It’s all about perspective. Wealth also relates to context, meaning our lifestyle.
We may be miffed to know that a Saudi-Arabian guy just bought an island from Italy and we may think that’s unbelievable. Well for a billionaire that’s like buying a new, not-so-expensive car. Nothing to be surprised about.
The world is richer than ever, and so are billionaires. But what made them billionaires?
From the research shared in the documentary, here’s how you become a billionaire:
- 13% inherited their fortune.
- 66% are self-made.
- The remaining is a hybrid, it has inherited its wealth but also worked to make it grow.
What is wealth exactly?
Wealth first comes from labour, a man’s capability to work and earn money. Our ability to work is therefore our main source of income and wealth. However, capital is also made up of other things, such as:
- Real Estate Properties
- Businesses and Start-ups.
As stated in “Billionaires”, the richer you are, the less your wealth will come from labour. Your capital will grow in other ways, and faster.
In fact, it is easier for $ 100,000 to become $ 110,000, by simply relying on compound interests, than making $ 100 into $ 110. That money you will likely need to pay your bills.
Billionaires and Taxes
Another sore point is taxation. Often and willingly in major Western countries, work is more taxed than capital.
But despite this, many billionaires hide their wealth and try to avoid even those “few” taxes, making use of our global world. In certain Countries, you can reduce your taxation, and as the Panama Papers recently highlighted, many have taken advantage of these possibilities.
However, this behaviour has 2 main consequences:
- The Countries where these people avoid their taxes will incur a shortfall in revenue that will translate into less money available for progress, businesses and infrastructure.
- Billionaires lists cannot be accurate as they cannot take these hidden assets into consideration.
In this regard, for instance, Forbes Billionaires list is based on public-known wealth, such as company shares, while personal assets can’t be taken into consideration.
Billionaires Explained is certainly worth watching if you have a spare 20 minutes. You’ll realise how even the most trusted lists on the planet don’t actually tell the whole truth about billionaires. How rich are they FOR REAL? We will never know!
Do you want more? Find out how