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Here's a hypothetical scenario. You have to choose one. What would you choose?
Asset Rich - You have $1B dollars locked up in startups and other invested businesses, but you probably wouldn't be seeing any of it for a while. And you have a 100m+ mansion you live in and your private jet. But the value's all on paper. You have very minimal cash flow income with your regular job that you got currently.
Cash Rich - You have $50M in your bank and you can do whatever the hell you want with it at any point of time. You also get a healthy cash flow income.
Random question I know, but just wondering what would be a prudent decision here. I have a similar decision I gotta make soon (obviously not in the above magnitude of course!). Cash is king?
This post has been edited 2 times, most recently by sparty419 14 months ago
Location: Mumbai, India
Depends on what kind of investments and what "not seeing any of it for a while" means, I guess. Start ups? Scary. Are you locked in to these investments (options, vesting periods) or can you trade them freely?
If it all goes Enron - it doesn't matter what it was hypothetically worth. I have a few friends who were paper-millionaires and never saw a dime of it when the economy tanked.
Also depends how old you are. $50M at the age of 60 might be the way to go, whereas if you're 22 and have many years ahead of you, maybe you take greater risks.
How are you going to afford a plane if you have no cash flow?
FYI you are not going to own a private jet without cash to back it and it's expenses up....I guess you need to define minimal cash flow off of 1 billion in investments.
35,600 posts and counting since 09-09-2002. tRCMB Dead Pool Commissioner.
Over the past 2 years I have seen a few people try, both have tons of money but it was all tied up in investments(1 was in land/hotels and the other in various funds including 1 he started). Both ended up selling the planes rather quickly when they needed cash for something else.
Fuck working. Give me $50 million.
If you have a net worth of $1 billion, then you have the assets to afford and maintain a private jet.
I prefer rcmb rich -- moms basement, no money, no friends, an Internet connection and the ability to type and masturbate furiously. Extra points if both at the same time.
Rich enough to have a monocle and no one would question it.
I thought everyone on the RCMB already was both???
Uh, assuming no debt, I'll take the billion in assets. Thanx. Pretty sure I can turn a mansion, a PJ, and however many startup risky assets into realizing more than 5% of its asset value. You can all visit me at my Buzzer Center suite (formerly known as the Breslin Center).
You need cash money to be able to pay the monthly bills, the maintenance bills, the crew, etc. You are not going to be able to do that with assets as the OP postulates. Net worth is not the way to own a jet, trust me....many have tried, most if not all have failed. Asset rich with very little liquid money is a sucky way to live, rich speaking.
This post was edited by pulling69 14 months ago
How about workers comp rich? Don't have to (can't) work, living tax free, fresh cash infusion every Monday am, money left over. Ballin!
Just to add, the reason I also ask this is because we always read about billionaires and millionaires in "net worth", but I find that to be very deceiving. How can you be rich in any way, if you can't pay for a cup of tea, even if you had a house and plane and investments "worth" billions?
This post was edited by sparty419 14 months ago
Cash, easier to move offshore...Easier to have fun with. Little to no potential of it all becoming worthless in a very short period of time.
i would rather bone your sister.
even if your goal is to get really rich, a bird in the hand is worth two in the bush.
I prefer no bush. But you can enjoy that if you wish.
I think I'd rather have it. I'm a reasonable, disciplined person when it comes to money and I'm sure it would last. Having it "locked up" in things like startups and small businesses leaves me a little more worried than if I knew it was already a done deal and in my possession.
I thought this thread was going to be about famous dicks.
what are the tax implications of the two proposed scenarios?
This post was edited by Diodotus 14 months ago
Not just screw you rich, but screw everybody rich.
"I think the world is run by C students"
Having been on both sides of the coin, the two scenarios you present each offer advantages and disadvantages.
Cash rich is nice for hookers and blow.
Asset rich is better for retirement.
I must be crazy to be in a loony bin like this.
Hood Rich…make ‘em keep guessin’.
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