i heard Microsoft had a “bill’s petty cash account” because even before he made millions hed often forget to carry any type of money and he’d often take a group he was working or meeting with out to lunch only to realize he didn’t have any money/cards on him so hed ask to “borrow some” until they got back to the office
So they kept some in the office for him to"borrow" from a secretary/assistant whod get paid back eventually and they just added it to the fund…
Before he made his millions he had a petty cash account? That statement would seem a whole lot more meaningful if “before” was instead “after”. 
I read that “every billionaire is a policy failure” and “nobody becomes a billionaire honestly”, JK Rowling excepted. I’ve not mixed with that crowd so I’ve no idea of their purchasing power and habits – although I’m told by one who knows that a certain America’s Cup contestant is an unpleasant fellow. Another prominent self-proclaimed billionaire is known to steal tips from his hostelries’ wait staff, even from the documented servers.
Do billionaires regularly whip out credit or debit cards? Is there a gender disparity? I suppose a few more account hackings might reveal such details.
I have no yacht experience but I helped a former client buyback private jet. The jet was ordered a couple of years in advance and built to his specifications, which included interior finishings, custom paint, and things like navigation etc. He consulted with his pilot on the flying bits. He paid some money up front by liquidating stocks and we set up a liquidity plan for the rest since he was going to make payments in stages as the plane was completed. I think it was roughly 10% down, 50% at the start of construction, a payment when the engines were delivered, and the remainder on delivery.
He knew roughly when these payments were coming so the portfolio was structured to have the liquidity he needed when he needed it. He didn’t just keep all the money in Treasury bills for a few years. I’m guessing yachts work roughly the same way.
Any firm large enough to handle billions will have its own internal system for allowing its customers to move their money around. A firm like Merrill Lynch will have its own checks just like any bank. Most accounts will keep a small percentage in cash that can be drawn upon. That’s handy for personal expenses or to make stock or other purchases without having to sell off current holdings.
Would Gates have $100 million in such an account? No idea. Would he have $100 million in some form that would be transferable to that account in a day or two? Almost guaranteed.
[QUOTE=Tired and Cranky;21899411The jet was ordered a couple of years in advance and built to his specifications, which included interior finishings, custom paint, and things like navigation etc.[/QUOTE]
I wonder how this will work with the current, younger, generations? Even me, as an X-er, want my things “now!” The idea of giving you money for something a few years away is preposterous. Note: that’s for depreciating assets. Investing in a new plant that might produce profits in two years is totally cool.
In 1999 Mark Cuban had just sold Yahoo for $2 billion and wanted to buy a $40 million Gulfstream jet. Instead of going through a broker or having someone else do it, he found one on eBay he liked, had his pilot test fly it, then wired them the money. It is still the largest single e-commerce transaction.
That is about $62 million in current dollars.
Exactly. A billionaire might not carry cash because he doesn’t need or use it. Some might line up for burgers or stop at the local equivalent of Starbucks, but “working” billionaires are probably too busy with meetings, calls, and travel to have the time to just wander into a store or restaurant. As they are working, they have help who take care of the details. His gopher Bob will order food, arrange for deliver, pay for it with a corporate card, and if cash money is needed, submit an expense claim. After all, the rich are no different from you and I - if more than $20 is called for, rarely is plastic NOT an option.
If they are in the habit of going out on their own for burgers, they probably carry cash at that time. (They might forget once in a while).
If it’s something that requires serious plastic, say $1,000 to $20,000 or more, they probably are doing this with an assistant in the wings who has the necessary plastic if they don’t. Beyond that, they have a line of credit arrangement of some sort wherever their money is parked so they can on a whim buy that $2M supercar or speedboat or rent the top floor of the hotel for the month. When you get into the millions, if they don’t make the arrangements, they have accounting minions who will shuffle the investments to make it happen. Usually multi-million dollar items like private jets are financed rather than bought outright. (A jet is a good investment because usually it is worth close to the same years later, unlike a car which depreciates the moment it’s driven off the lot).
JFK was notorious for not having cash on him, particularly when president, and expecting his handlers to take care of money.
I read a book a few years ago called “Richistan”. The Super-rich live in a different world. the author mentions different tiers. There’s the regular rich - typical ordinary CEO makes a few million a year plus bonus, has tens of millions socked away, and can fly first class, has a executive assistant to help with arrangements and can afford most things without question - a flight on short notice first class, a vacation stay anywhere in the world, whatever house they want to buy, any car, etc.
Then there’s the super rich, the near billionaire and better. They don’t have to mix with the hoi poli, they have a staff dedicated to smoothing the way. They tell them what they want, and the staff take care of details. They fly private jets, not even first class. They own houses (mansions) all over the world. When they plan to go to one, the staff makes sure the place is cleaned and ready, the fridges are stocked with their favourites, the Escalade is waiting to whisk them from the airport, their luggage is packed for them and unpacked at the destination. And - any staff have signed non-disclosure agreements… They want to go skiing in Aspen? A suite is booked, ski outfits and equipment is waiting. Going to Venice? Private speedboat whisks you to a personal villa and tickets for the film festival are waiting. Rarely do entertainers or mere CEO’s fall in this category. In this category, a minion would have the accountant on speed dial.
There’s the notorious documentary of Michael Jackson, in one scene he’s shopping in Vegas. “I want that, that, that…” he points to schlock in an artsy shop. He pays nothing, the shop wraps it and ships it and his minions make payment arrangements.
There are the generationally rich. I’ve known a few. For them, money does not enter into the equation. Want a Tesla 3 because you’ve heard about it? Well, just buy it and who cares if it’s $100k when the list is $35k if you won the lottery.
July and you feel like skiing? Just go. There’s New Zealand and S American with resorts, whaddya feel like? Your jet or mine?
I forget the name of the poster. He grew up with wealth. Family wanted the family *dog *to go with them on a vacation in Mexico, so hired a private jet just for convenience. Because it’s not in the money equation. And that’s a different tier from having your own private 747 on stand-by.
Then again, self made billionaires, after a decade or three of being a billionaire are a bit more down to earth. I remember the CEO of a global manufacturing company, who’s wife suddenly became enamored with the NBA finals (LA and someone about 8 years ago) at the last minute. They just freed up the calendar and had awesome tickets at the last minute for every final. The cost was immaterial and never entered into the equation of go or no go.
I remember being part of the handlers at a conversation between then MSFT CEO Steve Ballmer and a major manufacturing CEO conversation comparing the merits and sizes of their respective Bombardier jets capable of flying across the pacific ocean. Ballmer was “I’m a big guy, I need the largest one they have.” Said manufacturing CEO landed his private jet at a private airfield in Seattle, only to learn that Ballmer was in Vegas, so he just turned the plane around and flew to the private plane airport in Vegas where he had staff ready and waiting to whisk him over to meet Steve. On a separate visit with that same manufacturing CEO in Vegas, the hotel where he was staying at arranged for a brand spanking new Bentley stretch limo to take him across the street from one casino where the meeting was held, and the other casino across the street where he was staying in a private set of bungalows with his family and nannies. It literally took us about 2 minutes faster to walk to the waiting Bentley than it took to actually walk to his hotel (We had done the 5 minute walk from his hotel over to the meeting hotel an hour earlier). Just part of the service for a valued guest that on occaision plays a million dollars a hand.
Even then there was a market for the impatient to buy their way to the front of the line. People like my client could basically sell their plane before they took delivery at any point in the production process to other people who didn’t want to wait. The cost of new planes tended to rise over time so there was some built-in appreciation even for an undelivered plane. If the waiting list remained long, buyers would pay a premium above that to someone with an earlier production date. I know I read about this happening but have no personal experience with it.
I’d also forgotten entirely that my client didn’t pay cash for the whole plane. There was some secured lending involved but I wasn’t involved in arranging for that and don’t remember the details.
If a billionaire doesn’t carry cash, it’s because he or she has no chance to use it. And it’s not because they are rich and snooty, but because they are at risk for kidnapping, extortion, robbery, etc. So they often travel with security and the people they travel with handle mundane purchases.
This is the same reason why Presidents don’t carry cash. It’s why Hillary hasn’t driven a car for 20 years, and why a president can get confused in a grocery store. Rich and powerful people often become isolated whether they want to or not.
As for being easier to make lots of money when you are rich… It’s also easier to lose a lot of money. Elon Musk was one failed rocket launch away from bankruptcy when he first tried to launch orbital rockets.
Lots more rich people would lose their money if governments weren’t in the habit of bailing them out when they get into financial trouble. That’s the real problem.
A Bentley stretch limo is the most tasteless and absurd thing I can imagine, I hope you made that one up. I refuse to believe they make them in Crewe.
It doesn’t matter if Bentley has good taste. Someone somewhere in America will take any vehicle and make it stretch, or ludicrously stretch, depending on the current owner’s whims. It likely is not practical… but who cares?
The rich don’t carry money for the same reason you and I don’t - you don’t need it. Anything over $20 is plastic nowadays unless your credit score sucks. (Guess whose credit score really really does NOT suck?)
Plus, given the amount of money they can throw around, they have people who take care of these details and paying the bills for them. Who needs money for a cab when someone has arranged a limo? Just like the boss at the office doesn’t need cash, just can tell the intern “get me a Frappe latte mochachino” (whatever the hell that is) and the intern get reimbursed by the executive assistant from petty cash coming back from Starbucks.
I suspect people who spent their formative years not well off probably have a different perspective, but I’m sure most appreciate the convenience of having it all done for them.
it’s a completely different mindset when what we perceive as expensive is price irrelevant. Want to go to Hawaii? There’s almost always an open seat in First class; if not hire a private jet. By the time you put 8 people in the jet, it’s probably not much more than first class. That sort of expenditure is like you deciding whether you want to spend $3 on that Starbucks drink.
Put it into perspective. Imagine making $1M a year clear. that’s $20,000 a week. Try to imagine spending that much. Now imagine it’s $200,000 a week. The new Tesla looks cool? Buy one. It’s going to eat up a week’s income or less. Want a $5M apartment in Manhattan? a mortgage at 5% means about $250,000 a year, or $20,000 a month. Or, shuffle your investment and buy it outright. Or ask your accountant to handle the details. He’ll tell you if you’re overdoing it… unless you’re Michael Jackson, apparently he spent like a drunken sailor until he was way over his head because his minders didn’t have the guts to warn him. Now that he’s dead, he’s not spending and he’s never been richer.
I’m also reminded of Warren Buffet’s comments about money and his kids “I gave them enough money that they could do anything - but no so much that they could be nothing.”
But for the OP’s answer - depending on how complex their assets are, either their accountant or banker will take care of any big expenditures - line of credit or shuffle and liquidate some investments. I presume the accountant knows their boss, and whether it’s prudent to have a how much sitting in easily liquidated assets (like bonds). For really big assets - real estate, yacht, jet - these can be financed and represent a regular payment, not a lump sum - since they tend to hold plenty of value and can be sold for much of the original price when necessary.
In college and in the post-college years, I knew a few people who had small trust funds. (I never knew the exact amounts but this was probably a million or two. They seemed much less driven to find a job after graduating than those of us who had student loans and other bills to pay. One is still, after three decades, still self-employed, making very little money but living extremely frugally. I think his goal was never to have a conventional job.
Mike Ashley, a British billionaire, pulled out a wad of 50’s you could choke a horse with when he was searched in front of a tv crew while showing some dignitaries around his sports warehouse.
Kevin Smith had an interesting encounter with that when he briefly worked with Prince.
Long prelude for context, but you can scroll down to blue text.
I’ve got a friend who is pretty wealthy. She got a wad of money from her family, but sha has also worked hard to grow it. I’m not sure how much her entire holdings are worth, but I know she own a pretty big house here, rents an apartment in New York that she doesn’t stay in all that often. She sublets when she’s not there, and undercharges the tenants, makes up the different with the landlord, and the understanding is that if she wants to use the place, she gives them two weeks notice that they have to find other accommodations, or move to the storage room upstairs, which once upon a time was the servant’s quarters. Yeah, it’s that nice an apartment.
She also has a small-ish (for someone of her means) in California which she rents (again, very low) to a family with two children who are from Haiti, and probably thought they’d won the lottery when they hooked up wit her. The master bedroom is hers, and they use the other two. Keeping the house occupied is in her best interests, because it actually keeps her insurance low (apparently enough to make up for the hit she takes on the rent. Moreover, when she’s there, they do who laundry, cook for her, and clean the house, including vacuuming her room, cleaning her bathroom, etc.
I visited her their once. FTR, she treats them very well. The kids call hr “Aunt,” and she gives them birthday and Christmas presents.
She’s go two cars in Indy (I actually met her at a car museum, then I helped her fix something on her Bel Air), a Tesla and a 56 Bel Air, and a Prius in Cali. No car in NYC.
We turned out to have something else in common-- she also collects pinball machines, except she’s really serious about it. And she’s got a full set of cocktail-top arcade games.
She also collects vintage musical inastruments, and gold coins from around the world.
I’m going into such detail, to show that yes, in fact, she is rich. She is not Bill Gates rich, but she does have an endowed foundations. One gives tuition money to highly rated (and usually highly expensive) pre-schools to use for families living below the poverty live, or with a parent on disability. The other one gives money to families with older foster children who will turn 18 before they finish high school, so the kids can continue to be supported through graduation (or if the families won’t keep them, even with financial help, to help the kids themselves stay on their feet, and support them so they will finish high school.
OK. She’s not Richie Rich. But I’d guess the totality of her holdings are between $5-10,000,000.00. You’d recognize her last nam ihyjn8ue as being associated with an Indiana family (NOT the Pences, and not the Jacksons), so I’m just going to call her T. Anyway, like I said, her family gave her generous seed money when she finished college, but she built it by about 400%.
OK. Here’s my point: I would never ask someone about their financial situation unless 1) they had just proposed; 2) wanted to go into business with me; C) just asked to borrow more than $100 from me.
But once when I was having coffee with T, and a couple of other friends, someone just bluntly asked her "How much money do you really have?
T: Depends on what you mean by have. In my pockets? In my debit card account? Plus the annuity I’m building for retirement? How much would I have if I liquidated my entire holdings?
Nosy: How much cash could you get hold of in ten minutes?
T: 10 minutes? About $50,000 in cashier’s checks, or about $12,000 in cash.
Nosy: What about an hour?
This went on, with me trying ro make myself smaller and smaller, but it went something like this:
1 hr.: $1,500,000
24 hrs: $2,500,000
a week: $4,000,000
Then she said that above one hours were estimates because markets change, and for the same it was impossible to give anything but a ballpark figure fo liquidating all of her assets, or something like all but one living space and enough money to live frugally for a year, and it would probably take a year to do, and there would be a number before paying all the lawyers and accountants, and a number after paying the lawyers. And she wasn’t going to tell her any of those numbers, because she didn’t want to hire a bodyguard for her dog.
Then she said she had $6 in her pockets in ones, in case she needed to tip someone, and she carried two credit cards, one with a $700 limit, and one with a $10,000 limit, and a debit card, and what she had in the bank fluctuated.
So the answer it “it varies.” Some people like to carry cash, and some don’t. Another person I know who is wealthy, albeit, more like makes 2k a year, lives below is means, and invests conservatively. All he ever carries is a credit card with a $1,000, which he uses for absolutely, gas, food. He says it keeps down his impulse spending. He pays in it full twice a month, after each paycheck. He never has any ready cash-on-hand.
On the other hand, I know an auto mechanic who has such horrible credit, he can’t get a bank account. He finally got one of those secured debit cards that is check can be deposited into. He used to have to cash his paychecks at those places with the sigh that said “CHECK CASHING! MONEY ORDERS!” and charged him 10%. The debit card charges him only something like 2%, plus a flat monthly fee that like $19.
Now, HE carries LOTS of cash. When he withdraws cash from an ATM, he withdraws A LOT, to minimize the "foreign ATM fees he pays.
I would say “How much can you get together in a day” is a better standard, because it means emptying all bank accounts, CD, annuities, other retirement accounts and PERSONAL stock holdings, but not selling future potential earnings (other than retirement accounts that are not ALSO current sources of income, living space, and valuables that need to be auctioned, and can’t be sold in a day, except for far, far less than their value.
Well, that’s how MBS buys one. To the tune of over half a billion dollars, the deal completed in a matter of hours shortly after he spied it offshore while vacationing in France. (Much better link at the NYT, but may be paywalled)
I don’t know if I’d count the antics of wealthy Saudis as they’re pretty well known for gratuitous flexing, so that’s an outlier. For most wealthy people, such purchases tend to involve hours just selecting available options and waiting months or years for the final acquisition.
One thing I read said that the born rich/always rich are horrible tippers, while the people who were poor and made themselves rich are a lot more generous. I would imagine that someone moving in the world where service help is the norm would need more than $6 a day for tips. I presume at that point where tips exceed $1 she adds it onto the credit card slip instead. She sounds pretty level-headed.
Money is the last atboo subject in America.