Since money can be easily invested to earn interest and experience exponential growth, can I create a legal entity for the sole purpose of imposing my will on all of humanity in 1000 years? After a thousand years, the money will have grown enough to buy everything humanity owns.
So, would simple goals be achievable for a pittance, such as “Eliminate taxes of any kind” or “Colonize space”?
I don’t think it’s possible - as you acquire a larger share in anything, that which remains is likely to increase in value as a result of the scarcity.
The trouble with this is that once you’re dead, it’s hard to enforce your wishes.
So you set up a foundation and endow it with ONE MILLION DOLLARS, with instructions that the money is to be invested at 5% for the next thousand years, at which time it is to be used to CONQUER THE WORLD.
Except how do you guarantee that you’ll get that 5% rate in perpetuity? Some manager invests in the wrong fund, and suddenly the foundation is broke. And how do you guarantee that the foundation managers will share your vision, and not amend the mission statement so that your foundation is now supporting homes for wayward cats? And how do you guarantee that the currency doesn’t collapse, or go through hyperinflation, and your million dollars compounded doesn’t turn into a billion dollars, but now a loaf of bread costs a billion dollars? And how do you guarantee that our legal system will remain in place for a thousand years?
Take something like the Nobel Prize. Nobel decreed in his will that such a prize should be created. But nowadays the Nobel Prize isn’t continued because Nobel’s will declared that it should, it is continued because the people who control the foundation want it to continue. And the foundation has added new prizes since 1895, the continuation of the prize depends on the foundation not encountering financial disaster, and so on.
Also, there isn’t enough money in the world to buy the world. It wouldn’t make sense, because most things are not for sale. We only need enough money available to be able to buy and sell the things we actually buy and sell. The total amount of all the money possessed by all the people in the world is worth only a small fraction of the amount of wealth in the world.
There was a science fiction story I read about 40 years ago that was based on this idea, but I don’t remember its name or the author. In the story, the foundation wound up owning every thing in the universe.
This question is broken. Your invested money grows because the value of everything grows. After a thousand years, your money will have grown in proportion with all other investments. You will no more be able to afford to buy them then than now.
Well, just to be a dick, I’m going to set up a legal entity which will preserve something of mine which has some value, with the stipulation that if, 1,000 years from now your legal entity tries to buy it, the price will automatically be equal to all the money you have.
Slightly more realistically, I don’t think there’s any way to protect yourself from the government at the time just passing a law which would effectively tax all your money away from you. Laws can always be changed, so your legal entity could suddenly find itself no longer legal.
That can’t be right - what about compound interest?
The overall stock of wealth in the economy is also growing at a compound rate. Princhester is exactly right.
I guess I should amend my OP to state:
Since money can be easily invested to earn steady interest and experience inflation-adjusted exponential growth…
Also, instead of the goal of owning everything, the new goal is something grandiose like “Pay everyone’s grocery bills for a year” or “Pay off the national debt” or “Further colonize space”. And feel free to break the 1000 year timeframe if you find it too restrictive.
Hmm, this sort of begs the question. What’s the upper limit of an individual’s ownership of all human assets if lifetime is not a factor?
I thought it was a principle of law, and this may be anglocentric, to discourage or prohibit perpetual trusts. See rule against perpetuities.
Yeah, its generally pretty difficult, legally speaking, to set up something that will carry out very specific wishes over a long period of time. The system has a preference for distributing estates quickly. Thats not to say that a good will draftsman can’t do some pretty creative things though.
Now you’re talking. The key factor is the differential between the growth rate of your investments and the growth rate of the objective that you’re trying to attain. That was the problem with your own-the-world scenario–in the very-long run, it’s impossible for your investments to grow faster than the overall stock of wealth in the world.
Grocery spending is another story. If we restrict it to the United States, it grows roughly at the rate of inflation plus population growth–perhaps 5% per year. Your investments, if you’re willing to assume risk, can grow at perhaps 10% per year–maybe a little more, maybe a little less, and who knows what conditions will be like over the next 500 years. But we have to assume something, so we’ll assume your investments grow 5% per year faster than grocery spending.
Americans spend about a half trillion dollars a year on groceries. In 500 years, that will increase to $1.97*10^22. To have that amount, you’ll have to invest a grand total of . . . $39.56 @ 10% per year. Want to do it in a thousand years instead? Invest a penny. Such is the power of compound interest.
The national debt is about $9 trillion and growing by 5% per year, so figure 18 times as much, or $700 for a 500-year payoff. It sounds easy, but good luck getting your heirs to keep their hands off that money when it’s worth quintillions.
If I had heirs, a tiny fraction of a quintillion would easily satisfy them. But let’s assume the benefactor has no heirs.
Don’t trust the investment returns? Create 10 independent funds. Or 100,000. Still very affordable if each fund starts out at a penny. Can’t buy penny stocks? Merge the fund at the start and split it later. Highly unlikely that one of these 100,000 efforts won’t eventually succeed.
Don’t trust the foundation? Use a fraction of the returns to set up multiple protection agencies with the sole purpose of enforcing adherence to your wishes via legal and non-legal channels.
Don’t trust the government? Once your funds get rolling, pay multiple lobbyist organizations to ensure government approval and passage of laws to keep things on track.
Everyone has heirs by statute.
Ronald C. Semone writes:
> There was a science fiction story I read about 40 years ago that was based on
> this idea, but I don’t remember its name or the author. In the story, th
> foundation wound up owning every thing in the universe.
“John Jones’s Dollar” by Harry Stephen Keeler. I presume the OP read the story and asked about this because of it, since the question he’s asking is exactly the same as the idea in the story.
Thanks for the pointer. I had not read it, but found the link to the story here and enjoyed it.
But doesn’t this preclude the possibility of making a profit by investing money over any period of time?
In other words, why is it that I can make a profit by investing money for five years, but not by investing it for a thousand?
-FrL-
Nobody said you can’t make a profit by investing for a thousand years. It’s just that doing so would not earn you a larger share of the wealth of the entire world.
You’d still be a lot richer than most people, though, because there would be a lot more of them than when you started.
I am making assumption which may be naive. I would have thought that increased purchasing power is the same thing as having a larger share of the wealth of the entire world.
Is that incorrect? If so, why? If not, then how is it possible to make a profit in any meaningful sense without at the same time acquiring a larger share of the wealth of the entire world?
-FrL-