# Another finanace question **URL:** \ **Category:** In My Humble Opinion\ **Created:** [April 29, 2017, 3:11pm UTC](https://boards.straightdope.com/t/another-finanace-question/785498 "2017-04-29T15:11:20Z")\ **Posts on this page:** 4\ **Page:** 1
**Author:** ![HoneyBadgerDC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/honeybadgerdc/32/1033_2.png) [@HoneyBadgerDC](https://boards.straightdope.com/u/HoneyBadgerDC)\ **Post date:** [April 29, 2017, 3:11pm UTC](https://boards.straightdope.com/t/another-finanace-question/785498/1 "2017-04-29T15:11:20Z")
We always here about how the top 10% or 20% has such a large percentage of the money. What do they do with this money. If the available money exceeds the viable investment market where does the money go? Do prices on investment just keep going up to accommodate this extra money? ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [April 29, 2017, 7:21pm UTC](https://boards.straightdope.com/t/another-finanace-question/785498/2 "2017-04-29T19:21:47Z")
The top x% has a majority of the _wealth_. Most of that wealth is in the form of real things: land, buildings, ships, airplanes, factories, farms, etc. Often, the ownership is abstracted through a corporation, so a wealthy person doesn’t literally own ships and airplanes, they own a percentage of a corporation that owns those thing and uses them as part of the business. They’ve also got some money sitting around in various bank accounts, but most of their wealth isn’t in the form of _money_ per se. If the supply of money goes up but the supply of actual things people want doesn’t, you get inflation, and the price of things goes up. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [April 29, 2017, 8:03pm UTC](https://boards.straightdope.com/t/another-finanace-question/785498/3 "2017-04-29T20:03:16Z")
> [@HoneyBadgerDC](#): > > We always here about how the top 10% or 20% has such a large percentage of the money. What do they do with this money. If the available money exceeds the viable investment market where does the money go? Do prices on investment just keep going up to accommodate this extra money? To a certain extent, yes, the investments get more expensive just to soak up the available money. Look, for instance, at the stupid investments made by venture capitalists. They ran up the value of Theranos to nine billion (with $400 million invested) before the Wall Street Journal reported that their proprietary technology didn’t actually work. Or Juicero, which raised $120 million for a home machine to squeeze packs of chopped fruits and vegetables to obtain a cup of juice. Or that Tesla’s valuation exceeded that of the Ford Motor Company and last I heard was approaching that of General Motors, despite producing much fewer cars. In short, many of these Silicon Valley companies have valuations that exceed any reasonable measure. On the other hand, though, Apple’s valuation is over 700 billion, which sounds crazy, but they do have over 200 billion in cash, and the PE ratio is under that of the S&P 500. And Warren Buffett, who generally only invests when he thinks a company is cheap and never really bought technology stocks, recently invested in Apple (about $18 billion). So some tech stock valuations _aren’t_ insane. ---
**Author:** ![Flyer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/flyer/32/7298_2.png) [@Flyer](https://boards.straightdope.com/u/Flyer)\ **Post date:** [April 29, 2017, 9:45pm UTC](https://boards.straightdope.com/t/another-finanace-question/785498/4 "2017-04-29T21:45:39Z")
A lot of that money is in the stock market, and isn’t “real” money until it’s withdrawn. Many of the well-known billionaires are, in a sense, billionaires only on paper. If you pay attention to the Forbes 400 lists, you’ll see that the rankings tend to vary somewhat based on how the stock of certain companies has performed in the previous year. This isn’t quite the same thing, but it’s an example of how that general principle can play out. > [@](#): > > Last year, Elizabeth Holmes topped the FORBES list of America’s Richest Self-Made Women with a net worth of $4.5 billion. Today, FORBES is lowering our estimate of her net worth to nothing. Theranos had no comment. > > Our estimate of Holmes’ wealth is based entirely on her 50% stake in Theranos, the blood-testing company she founded in 2003 with plans of revolutionizing the diagnostic test market. Theranos shares are not traded on any stock market; private investors purchased stakes in 2014 at a price that implied a $9 billion valuation for the company. > > Since then, Theranos has been hit with allegations that its tests are inaccurate and is being investigated by an alphabet soup of federal agencies. That, plus new information indicating Theranos’ annual revenues are less than $100 million, has led FORBES to come up with a new, lower estimate of Theranos’ value. > **[From $4.5 Billion To Nothing: Forbes Revises Estimated Net Worth Of Theranos...](https://www.forbes.com/sites/matthewherper/2016/06/01/from-4-5-billion-to-nothing-forbes-revises-estimated-net-worth-of-theranos-founder-elizabeth-holmes/#1729c7f43633)** > > FORBES once ranked Elizabeth Holmes as the youngest woman self-made billionaire. but problems at her company, Theranos, have led us to discount the value of her stake.