## Context Setting

Remember this tweet from Part 1?

I’m going to a quick verification of these numbers. Partly because verification is important, and partly because it’s important to start finding resources to reference for similar exercises. I also want to take a moment to expand on what this means.

## What do you mean “what this means”?

First, the “what is net wealth”:

Net Wealth / Capital = Total Assets - Total Liabilities

Most of us are familiar with this, even if we don’t use these terms for it. When you hear the advice “don’t spend more than you make”, that translates to “don’t spend more capital than you have in liabilities”. Of course, by the nature of our society we’re almost always spending more than we make by design. As a quick example, let’s take a look at college / university in the United States.

In the US we require students and/or their families to directly take on the burden of the cost of college. The National Center for Education Statistics shows that the average tuition across all institutions is $25,000 per year. So if you’re a student and able to get a loan you’re taking on -$25,000 per year.

Most likely when you go to college you’re also working. Most students are working “entry level” jobs, which means making the minium wage or close to it. Currently, that’s about $7.25 per hour. This works out to be$7,540 per year if you work 20 hours per week, every week, no breaks and $15,080 per year if you similarly work 40 hours per week (both numbers pre-tax). Even if you have no other expenses like food, books, utilities, rent, etc. your net wealth is nearly -$10,000 (per year). To say it again, this is your net wealth working full time and going to school full time with no other obligations. Using the language above: your asset is the income from your job and your liability is your student loan.

For non-billionaires, depending on the career options and associated roles that are available to you, you may be able to plan for retirement via a 401k or 403b (the “non-profit 401k”) or be eligible to receive a pension. (Note that these still count toward your net wealth even if you won’t be able to use the benefit(s) until you are older.) In some types of jobs, you might receive stock options and so on with your job offers. These would all fall under the “asset” category. Liabilities would be debt, for example paying off that student loan debt, medical debt including hospitals, doctors, and assistive devices, as well as home loans (mortgages) and any loans for the upkeep of that home, spousal and/or child support, and so on. This isn’t an exhaustive list by any means, but you get the picture.

For the ultra-wealthy, including billionaires, the whole world is more than a little different. The way that they fundementally use and make money is unrecognizable to the rest of us. The types of assets they have are less about “home mortgage” and more about “hotel chain”, for example. Or paying someone $100,000 to save them$1M in taxes (so they still “made” $900k) and so on. All of this to say that the statement “Billionaire X’s Net Wealth is Y Billions” can mean a lot of different things in practice. They could be venture capitalists, funding startups and taking partial ownership in return, real estate, and so on. More directly by way of example: it does not mean that their income, or even the majority of their assets, comes from “making$Y Billion” as a C-level at BigCo.

For people with published net wealth, there are actually net wealth researchers. They do things like reach out to various people and companies, evaulate public and private assets, use public records like stock exchanges, and so on to determine a billionaire’s net wealth.

Depending on the source, this work can be incredibly high paced. For example, Forbes maintains a real-time billionaires list. Forbes gives a quick description of their methods on the page, explaining that some data is updated every 5 minutes, or 15 minutes, or once per day. Sources like this one are what people use, including myself for this blog series, when we discuss “Billionaire X’s Net Wealth”.

## So now what?

I started this post intending to only focus on “I will be using the following sources to verify the above tweet”, but I had an important side track where I really wanted to explain how different the wealth considerations are. With that done, I’ll address what I want to address: verification of the tweet.

Since these are all matters of public record, using your search engine of choice and taking a look at the Forbes list from before, and similar sources, will be what I’ll use to verify. As it stands:

Name1 May 2021 Claim24 Jul 2021 Data
Elon Musk$151 billion$161 billion
Jeff Bezos$177 billion$208 billion
Mark Zuckerberg$97 billion$126 billion
Bill Gates$124 billion$130 billion

Main source: Forbes Billionaire List

Relevantly, the billionaires had Events™️ since that tweet on 1 May 2021. For example Jeff Bezos rode a dick into suborbit and Richard Branson of Virgin Galactic also had a suborbital flight. Richard Branson is not listed above, but for the record his current net wealth is \$4.8 billion.

So all of that is to say: the data is verified and has fluxed since then. So now that I have that square, I’m going to return to tackle the main point of this series:

What even is a living wage anyway, if you do what you’re supposed to do and account for the common debts and responsibilities that people actually have?

Coming up next: student loan debt and medical debt.