# How much liquidity do the world’s billionaires generally have? **URL:** \ **Category:** Factual Questions\ **Created:** [October 9, 2019, 7:40pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547 "2019-10-09T19:40:54Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [October 9, 2019, 7:40pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/1 "2019-10-09T19:40:54Z")
Inspired by an argument I’ve seen online a lot: “The richest of the rich could give away 99% of their money right now to solve the world’s problems and still be able to live the rest of their lives in obscene luxury! Jeff Bezos does not need multiple billions!” “But most of his wealth and income is tied up in Amazon stock! He can’t divest without screwing the company!” “That just highlights the problem with the capitalist system!” And so on. But it made me wonder: how much of their net worth could the world’s richest generally give away, right now on a whim, as a practical matter? IOW, what percentage of their assets are “real” (cash, property, etc.)? ---
**Author:** ![zimaane](https://avatars.discourse-cdn.com/v4/letter/z/a3d4f5/32.png) [@zimaane](https://boards.straightdope.com/u/zimaane)\ **Post date:** [October 9, 2019, 8:17pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/2 "2019-10-09T20:17:46Z")
For Jeff Bezos, Bill Gates, Warren Buffet and the like; most of their wealth is in the stocks of their companies. Since these companies are traded on public exchanges, it would be straightforward for them to sell. They would have to accept a lower price in order to unload it all at once, but it would not be hard to do. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [October 9, 2019, 8:26pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/3 "2019-10-09T20:26:45Z")
> [@zimaane](#): > > For Jeff Bezos, Bill Gates, Warren Buffet and the like; most of their wealth is in the stocks of their companies. Since these companies are traded on public exchanges, it would be straightforward for them to sell. They would have to accept a lower price in order to unload it all at once, but it would not be hard to do. They may not be able to dump stock in companies they started and took public. They may be limited to selling that stock in small increments to prevent the stock prices from crashing if the public believes they are baling out. ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [October 9, 2019, 8:54pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/4 "2019-10-09T20:54:51Z")
Tripolar is correct, that public perception of the value of those companies would collapse if the most significant shareholders began dumping stock. Aside from that argument, if all the billionaires were able to liquidate 99% of their holdings to be given away, who would buy it? There would be no wealthy people to acquire those holdings, as they are all liquidating… ….but hey lets have the governments around the world buy all of the holdings of these billionaires. Sounds like a fabulous idea. :rolleyes: ---
**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:** [October 9, 2019, 9:20pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/5 "2019-10-09T21:20:13Z")
> [@Omar\_Little](#): > > Tripolar is correct, that public perception of the value of those companies would collapse if the most significant shareholders began dumping stock. I’m not sure that’s true. The price would fall, but if managed correctly, it probably wouldn’t collapse. Imagine that Jeff Bezos announces tomorrow that he’s decided to devote his life to solving some charitable issue and has taken a vow of poverty. He’s stepping down from his CEO position and announces some kind of orderly plan for liquidating his stock to be used for that cause. Like, the value of Amazon would fall _some_. It would fall because Bezos is clearly a visionary CEO, and Amazon’s prospects would be somewhat less certain without him at the helm. And it would fall some due to knowledge about the liquidation. But it wouldn’t crater. As long as his claim of philosophical transformation was credible and the liquidation plan wasn’t crazy, I don’t see a collapse. Amazon is _still_ a profitable and gargantuan company with a credible story toward total economic domination. There will be plenty of people who want to buy it at a 10-15% discount and not _that many_ people who think “Bezos is dumping his stock! He must know something we don’t know! Sell sell sell!” The above assumes that we’re not parsing “The richest of the rich could give away 99% of their money right now” to literally mean at this instant. Realistically, any plan to fix major global problems doesn’t need $billions showing up in a bank account _tomorrow_, so I don’t see that as a major stumbling block. Bezos could liquidate his holdings over a few years, which would give plenty of time for the market not to run itself off a cliff and for whatever project he was funding to set itself up and start solving things in a reasonable way. I’m open to the idea that every single billionaire doing this en masse at the same time would be pretty disruptive, but any single billionaire or group of them could do this without capitalism folding. ---
**Author:** ![dorvann](https://avatars.discourse-cdn.com/v4/letter/d/df705f/32.png) [@dorvann](https://boards.straightdope.com/u/dorvann)\ **Post date:** [October 9, 2019, 9:35pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/6 "2019-10-09T21:35:19Z")
> [@iamthewalrus\_3](#): > > I’m not sure that’s true. The price would fall, but if managed correctly, it probably wouldn’t collapse. > > Imagine that Jeff Bezos announces tomorrow that he’s decided to devote his life to solving some charitable issue and has taken a vow of poverty. He’s stepping down from his CEO position and announces some kind of orderly plan for liquidating his stock to be used for that cause. > > Like, the value of Amazon would fall _some_. It would fall because Bezos is clearly a visionary CEO, and Amazon’s prospects would be somewhat less certain without him at the helm. And it would fall some due to knowledge about the liquidation. But it wouldn’t crater. > > As long as his claim of philosophical transformation was credible and the liquidation plan wasn’t crazy, I don’t see a collapse. Amazon is _still_ a profitable and gargantuan company with a credible story toward total economic domination. There will be plenty of people who want to buy it at a 10-15% discount and not _that many_ people who think “Bezos is dumping his stock! He must know something we don’t know! Sell sell sell!” > > The above assumes that we’re not parsing “The richest of the rich could give away 99% of their money right now” to literally mean at this instant. Realistically, any plan to fix major global problems doesn’t need $billions showing up in a bank account _tomorrow_, so I don’t see that as a major stumbling block. Bezos could liquidate his holdings over a few years, which would give plenty of time for the market not to run itself off a cliff and for whatever project he was funding to set itself up and start solving things in a reasonable way. > > I’m open to the idea that every single billionaire doing this en masse at the same time would be pretty disruptive, but any single billionaire or group of them could do this without capitalism folding. Yes it would be vital of Bezos or Gates to announce **beforehand** that they were liquidating their shares to donate to the proceeds to charity in order to mitigate a complete devaluation of Amazon or Microsoft stock respectively. I am sure that there would still be some devaluation but as long as they were forthcoming and assured people **beforehand** that they have complete confidence in the companies it would not be as bad if they just decided to start dumping their shares on the open market. ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [October 9, 2019, 9:49pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/7 "2019-10-09T21:49:02Z")
Again, who’s going to buy these trillions in stocks? ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [October 9, 2019, 9:58pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/8 "2019-10-09T21:58:47Z")
> [@Omar\_Little](#): > > Again, who’s going to buy these trillions in stocks? Nobody outright. Even a massive company would not pay outright to acquire such holdings, but they might engage in a conversion of stock that our hypothetical billionaire could sell more readily once the deal is done. ---
**Author:** ![Frankenstein\_Monster](https://avatars.discourse-cdn.com/v4/letter/f/ccd318/32.png) [@Frankenstein\_Monster](https://boards.straightdope.com/u/Frankenstein_Monster)\ **Post date:** [October 9, 2019, 10:05pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/9 "2019-10-09T22:05:48Z")
Jeff Bezos and his former wife together own almost 80 million Amazon shares (worth about 150 billion dollars) out of the almost 500 million outstanding, or 16% of the company. So he could get rid of all his (and his wife’s) shares if everyone who holds Amazon shares today would be willing to increase their holding by only 16% on average. Even on a slow day people trade more than 2 million Amazon shares on the exchanges. So they could conceivably sell a million shares a day every day ($2 billion/day) for a few months (he recently sold a million shares in three days and nobody noticed). ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [October 9, 2019, 10:34pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/10 "2019-10-09T22:34:50Z")
> [@TriPolar](#): > > …They may be limited to selling that stock in small increments to prevent the stock prices from crashing if the public believes they are baling out. > [@iamthewalrus\_3](#): > > I’m not sure that’s true. The price would fall, but if managed correctly, it probably wouldn’t collapse. > > Imagine that Jeff Bezos announces tomorrow that he’s decided to devote his life to solving some charitable issue and has taken a vow of poverty. He’s stepping down from his CEO position and announces some kind of orderly plan for liquidating his stock to be used for that cause… > [@dorvann](#): > > Yes it would be vital of Bezos or Gates to announce **beforehand** that they were liquidating their shares to donate to the proceeds to charity… It’s also worth mentioning that it would be _illegal_ for someone like Bezos to sell stock for undisclosed reasons that are material to the value of the company - that’s insider trading. So Bezos selling a few million shares without any prior announcement isn’t likely to generate much of a stir among investors, since it can be _assumed_ that he just needs some liquidity to build a spaceship or something. ---
**Author:** ![F.U.Shakespeare](https://avatars.discourse-cdn.com/v4/letter/f/aca169/32.png) [@F.U.Shakespeare](https://boards.straightdope.com/u/F.U.Shakespeare)\ **Post date:** [October 9, 2019, 11:24pm UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/11 "2019-10-09T23:24:28Z")
> [@Omar\_Little](#): > > Again, who’s going to buy these trillions in stocks? Lots of individual and institutional investors (like mutual funds, banks, etc.) ---
**Author:** ![Gray\_Ghost](https://avatars.discourse-cdn.com/v4/letter/g/c0e974/32.png) [@Gray\_Ghost](https://boards.straightdope.com/u/Gray_Ghost)\ **Post date:** [October 10, 2019, 12:31am UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/12 "2019-10-10T00:31:45Z")
What defines a “sale” of stock? Could one of these hyper-rich people choose to take a loan or line of credit out from some financial institution, pledging the stock as collateral? Would that be a “sale”? ---
**Author:** ![Marion\_Morrison](https://avatars.discourse-cdn.com/v4/letter/m/a87d85/32.png) [@Marion\_Morrison](https://boards.straightdope.com/u/Marion_Morrison)\ **Post date:** [October 10, 2019, 12:38am UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/13 "2019-10-10T00:38:13Z")
Alex, I’ll take “Things I don’t give a fuck about” for $400, pls. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [October 10, 2019, 12:42am UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/14 "2019-10-10T00:42:57Z")
> [@Gray\_Ghost](#): > > What defines a “sale” of stock? Could one of these hyper-rich people choose to take a loan or line of credit out from some financial institution, pledging the stock as collateral? Would that be a “sale”? If the stock can’t be sold it can’t be used as collateral. ---
**Author:** ![Colibri](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/colibri/32/1841_2.png) [@Colibri](https://boards.straightdope.com/u/Colibri)\ **Post date:** [October 10, 2019, 2:27am UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/15 "2019-10-10T02:27:45Z")
> [@Marion\_Morrison](#): > > Alex, I’ll take “Things I don’t give a fuck about” for $400, pls. **Moderator Warning** **Marion Morrison** , this is an official warning for threadshitting. If you don’t care about something, then don’t bother posting about it. Colibri General Questions Moderator ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [October 10, 2019, 3:43am UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/16 "2019-10-10T03:43:40Z")
> [@Gray\_Ghost](#): > > What defines a “sale” of stock? Could one of these hyper-rich people choose to take a loan or line of credit out from some financial institution, pledging the stock as collateral? Would that be a “sale”? No, if you pledge the stock as collateral, you still own it - just as you own the house that you have pledged as collateral against your mortgage. Just as with a mortgage, you will only be allowed to borrow some fraction of the market value of the stock, precisely because are still the owner, and you must usually repay the loan regardless of the value of the collateral - i.e. _you_ still bear the risk/reward of the stock going down or up. The proportion that you can borrow may be restricted by statute (Regulation T in the U.S.), and/or it may be based on the lender’s assessment of how risky the collateral is, i.e. how volatile the stock price is expected to be. > [@TriPolar](#): > > If the stock can’t be sold it can’t be used as collateral. Cite? So far as I know, there are no regulatory restrictions (in the U.S.) on using restricted stock as collateral. Of course, increased risk may mean that the lender requires more onerous terms, but such loans are certainly available. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [October 10, 2019, 9:10am UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/17 "2019-10-10T09:10:48Z")
> [@Riemann](#): > > Cite? So far as I know, there are no regulatory restrictions (in the U.S.) on using restricted stock as collateral. Of course, increased risk may mean that the lender requires more onerous terms, but such loans are certainly available. I’m finding mixed results on this.[This one article](https://www.forbes.com/forbes/1999/1101/6411420a.html#4316d88079bb)states that such stocks can be sold, and then warns that they may not: > [@](#): > > The spending money is fairly easily had. Banks and brokerages offer loans against restricted stock with the stock as collateral. Sound good? Proceed with care. The business is growing fast, loan terms vary widely and many lenders are working out the kinks. Just figuring out how to value restricted stock can be hard, especially with Internet and other technology companies. Your average bank isn’t playing this game, and you must choose your lender carefully (see box, p. 422). > [@](#): > > Whatever options you buy or sell, of course, mustn’t violate the restrictions on your restricted stock. Standard calls of the sort traded in Chicago, for example, can be exercised at any time. But it might not be legal for you to sell your shares for some time, and the call you sell has to reflect that. A securities firm has to create custom-made options to deal with the situation; you can bet that option prices will be structured to compensate the firm handsomely. [This article](http://www.survivorshipatoz.org/hiv/articles/how-to-use-stocks-and-bonds-as-collateral-for-a-loan/)states outright that restricted stocks may not be used as collateral: > [@](#): > > The federal government regulates the use of stocks and bonds as collateral for loans. There are limits on what securities can be used and how much can be borrowed against their value. > > Any stocks and bonds to be used must be freely salable and unrestricted. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [October 10, 2019, 10:23am UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/18 "2019-10-10T10:23:31Z")
> [@TriPolar](#): > > [This article](http://www.survivorshipatoz.org/hiv/articles/how-to-use-stocks-and-bonds-as-collateral-for-a-loan/)states outright that restricted stocks may not be used as collateral: I don’t know what on earth that site is (living with HIV/AIDS?), but the information on that page seems to be entirely spurious. The detailed table showing how the proportion that you may borrow varies with the price of one share is nonsense. The U.S. regulation governing margin accounts is called Reg T. You can borrow 50% of the value of stocks, and that proportion does not vary according to the value of one share, which would make little sense. > **[Regulation T (Reg T): Definition of Requirement and Example](https://www.investopedia.com/terms/r/regulationt.asp)** > > Regulation T, or Reg T, governs cash accounts and the amount of credit that broker-dealers can extend to investors for the purchase of securities. > **[Regulation T](https://en.wikipedia.org/wiki/Regulation_T)** > > Federal Reserve Board Regulation T (also referred to as Reg T) is 12 CFR §220 – Code of Federal Regulations, Title 12, Chapter II, Subchapter A, Part 220 (Credit by Brokers and Dealers). > Regulation T governs the extension of credit by securities brokers and dealers in the United States. > Its best-known function is the control of margin requirements for stocks bought on margin. The initial margin requirement for such margin stock purchases has been 50% since 1974, but Regulation T gives the Fede... I can’t find any credible reference to regulatory restrictions on using restricted stock as collateral, and googling “borrowing against restricted stock” indicates that such loans are certainly available, including from major firms such as Fidelity: > **[Control and Restricted Stock - Fidelity](https://www.fidelity.com/products/stockoptions/restrictedstocks.shtml)** > > Learn how fidelity's control and restricted stock specialists can assist you with your control & restricted stock needs. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [October 10, 2019, 11:09am UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/19 "2019-10-10T11:09:17Z")
> [@Riemann](#): > > I don’t know what on earth that site is (living with HIV/AIDS?), but the information on that page seems to be entirely spurious. The detailed table showing how the proportion that you may borrow varies with the price of one share is nonsense. The U.S. regulation governing margin accounts is called Reg T. You can borrow 50% of the value of stocks, and that proportion does not vary according to the value of one share, which would make little sense. > > [Regulation T (Reg T): Definition of Requirement and Example](https://www.investopedia.com/terms/r/regulationt.asp) > [Regulation T - Wikipedia](https://en.wikipedia.org/wiki/Regulation_T) > > I can’t find any credible reference to regulatory restrictions on using restricted stock as collateral, and googling “borrowing against restricted stock” indicates that such loans are certainly available, including from major firms such as Fidelity: > [Control and Restricted Stock - Fidelity](https://www.fidelity.com/products/stockoptions/restrictedstocks.shtml) You certainly may be correct because I don’t have any recent info on this. It is about time for an economic collapse, banks taking lottery tickets as collateral that can’t be cashed in even if they win will certainly help bring that on. I have some money in a Fidelity account, time to move that to something more secure. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [October 10, 2019, 11:19am UTC](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547/20 "2019-10-10T11:19:14Z")
I see no reason to infer that financial institutions lend any more recklessly against restricted stock than they do against other assets. Restricted stock may not be a lottery ticket, it covers a range of possible situations. [Next page](https://boards.straightdope.com/t/how-much-liquidity-do-the-world-s-billionaires-generally-have/841547.md?page=2)