# Where do you keep a billion dollars? **URL:** \ **Category:** Factual Questions\ **Created:** [November 29, 2010, 2:06pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278 "2010-11-29T14:06:20Z")\ **Posts on this page:** 20\ **Page:** 8
**Author:** ![Susanann](https://avatars.discourse-cdn.com/v4/letter/s/7ab992/32.png) [@Susanann](https://boards.straightdope.com/u/Susanann)\ **Post date:** [December 9, 2010, 4:01pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/141 "2010-12-09T16:01:13Z")
Originally Posted by Susanann 1. Gold traded above $800 an ounce for only, exactly, just “2” days in 1980. Do you know how many actual people in the entire world, who never bought gold before, nor ever again bought gold since, bought gold ONLY in those 2 specific days in 1980? Nobody. Your premise of someone buying gold on those 2 days back in 1980, and who never bought gold before those 2 days, and never bought gold ever again, is a false premise because nobody actually did it. You cannot come up with a single name of anyone who did this, because nobody did. > [@Schnitte](#): > > Well, _some_ people must have done it, or otherwise the price quotation could not have arisen - commodity markets (just like stock markets or forex markets) quote as prices simply the last price at which transactions in the respective traded good were conducted by market participants. So even if the period we’re looking at is just two days, the number of people who bought gold during that period is larger than zero. NO!!! that does NOT!!! mean _some_ people must have done it…no more than you can prove that EVERYONE today who currently owns stock bought all of their stock on October 23, 1929, and never bought stock before October 23, 1929, and never ever again bought another share of stock after that, in spite of the fat that 90% of all the companies traded around the world back in October 1929 are now gone and their stock is completely worthless. Now you are just being silly. ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [December 9, 2010, 4:16pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/142 "2010-12-09T16:16:01Z")
> [@Susanann](#): > > …if Carter had been re-elected then gold probably would have went to well over $20,000 an ounce… And you accuse other people of being silly. ---
**Author:** ![Schnitte](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/schnitte/32/9033_2.png) [@Schnitte](https://boards.straightdope.com/u/Schnitte)\ **Post date:** [December 9, 2010, 4:16pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/143 "2010-12-09T16:16:24Z")
> [@Susanann](#): > > NO!!! that does NOT!!! mean _some_ people must have done it…no more than you can prove that EVERYONE today who currently owns stock bought all of their stock on October 23, 1929, and never bought stock before October 23, 1929, and never ever again bought another share of stock after that, in spite of the fat that 90% of all the companies traded around the world back in October 1929 are now gone and their stock is completely worthless. > > Now you are just being silly. Please tell me: Do you actually understand how stock markets, commodity markets, forex markets and the like produce the quotations and prices you read in the newspapers? Do you think these numbers fall from heaven, or are just made up by some guy sitting somewhere saying to himself, “Hey, XYZ Corp, which closed at $54.50 yesterday, will be $54.65 today!”, or are the result of cabbalistic experiences. No. These markets are literally that - marketplaces where buyers and sellers meet to trade in their products. When you read in the newspaper that XYZ Corp. traded at $54.50 yesterday, this means that there was actually one pair of two people - one representing a buyer, and one representing a seller - , who actualy concluded a deal transferring a number of XYZ shares from buyer to seller at a price of $54.50. Same goes for other markets, including commodity markets such as gold. So the fact that for exactly two days in 1980 (a statement which you haven’t backed up with sources yet, btw, but which I assume to be true now), gold was trading at a particular price demonstrates that there were purchases of gold performed at that price. Your whole talk about people who bought gold “ONLY” during these days and never before or after is immaterial. Anybody who bought (or sold) gold at a given day for a given price had to pay the price (or received the price), and this is independent of prior or subsequent transactions. By the way, you still haven’t given me all the answers I had asked for - but given that it is a recurrent theme in this thread that you refuse to address questions to which you don’t know the answer, I am afraid my curiosity will not be satisfied any time soon, and that the same goes for the plethora of other posters’ questions which still stand unanswered. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [December 9, 2010, 4:18pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/144 "2010-12-09T16:18:00Z")
> [@Lumpy](#): > > Perhaps more relevent than the price of gold in dollars (since the whole point of the debate is abandoning dollars for gold) would be the worth of gold against a price index for various goods- food, fuel, etc. In particular I remember reading a claim that despite the skyrocketing price (in dollars) of both gold and petroleum, the amount of gold necessary to buy a barrel of crude oil has remained remarkably consistant for decades. True or false? I did this for Food. [http://boardstest.straightdope.com/sdmb/showthread.php?t=583613&page=3&highlight=gold](http://boardstest.straightdope.com/sdmb/showthread.php?t=583613&page=3&highlight=gold) \*Right now, a oz of gold will buy about 40+ cases of MRE aka 500 meals. A worker will have to work for about a month to earn a oz. Now let us assume, the economy crashes. How many cases of MREs do you think you could buy for a gold coin? One? Your gold just got devalued by 40. During the Warsaw Ghetto Uprising, a gold coin bought a meal. Thus, gold got devalued by a factor of 500. During the 1930’s a oz would buy you about 80 meals. Unskilled workers would work about 20 days to earn a oz. Post WWII, one OZ would buy you about 20- 30 meals. You’d work about a week. During Roman times a OZ of gold could buy you about 1000 meals, thus the value was higher. You’d work about 2-3 months to earn a oz. Thus the value of gold has fluctuated from one meal per oz to 1000 meals. A week to 3 months of work. The value of gold has fluctuated greatly. \* ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [December 9, 2010, 4:29pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/145 "2010-12-09T16:29:00Z")
> [@Susanann](#): > > NO!!! that does NOT!!! mean _some_ people must have done it… Just following up on **Schnitte** ’s point, how do you think the value of gold is established? It just seems so obvious to me that the value of gold is what people will buy/sell it for, so it is self-evident that if gold trades at $800 on a given day (or $350, or $1,400) then people actually bought and sold gold on that day for that price. So, it isn’t like your black hole example at all. ---
**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:** [December 9, 2010, 6:18pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/146 "2010-12-09T18:18:20Z")
Susanann has clearly shown that she has no real understanding how markets work. I’m stepping out now. ---
**Author:** ![Knocks](https://avatars.discourse-cdn.com/v4/letter/k/96bed5/32.png) [@Knocks](https://boards.straightdope.com/u/Knocks)\ **Post date:** [December 11, 2017, 6:32am UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/147 "2017-12-11T06:32:51Z")
I found this thread in 2017 after googling ideas about to invest 1 billion dollars. I am impressed with such in-depth knowledge of economics and clarity of arguments from most of the thread’s participants. The supreme irony of it all is that this discussion took place just a year or two before Bitcoin–an asset that some people want to be the ultimate store of value (i.e. gold) and others think is the future of currency (i.e. money)–started to take off. How different would have these answers been had this thread been started in 2017? 2018? 2019? But I didn’t create a Straight Dope account to derail a 7-year old thread. I am actually researching what to do with a billion dollars. A lot of people here recommend getting a money manager/financial advisor. Call me stingy, but I don’t like that those guys charge a percentage of the money under their management. I am also not impressed with their ability to actually manage money, not to mention that if the person you hire happens to be Bernie Madoff, you will lose the entire billion dollars and no one will ever reimburse you. So I’m personally leaning towards keeping $500 million in cryptocurrencies (which will undoubtedly continue to rise and make me rich); cashing out the other $500 million, paying a capital gains tax on it (if I can ever remember all the different transactions that I made over the years to prove my cost basis to the IRS), and using the remaining $350 million to: - buy an office building (skyscraper) in a decent U.S city for capital preservation and rental income: $150 million - buy a mix of index funds and bonds for passive income: $100 million - bootstrap a business in an industry that I care about, hire top talent, and attack life’s challenges: $50 million - buy houses, cars, and women: $50 million Sound like a plan? ---
**Author:** ![Lucas\_Jackson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lucas_jackson/32/303_2.png) [@Lucas\_Jackson](https://boards.straightdope.com/u/Lucas_Jackson)\ **Post date:** [December 11, 2017, 7:33am UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/148 "2017-12-11T07:33:10Z")
> [@LouisB](#): > > Don’t trust that other guy; I’ll take care of it for you. LouisB is from Nigeria. Zombie or not, your money is safer with me. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [December 11, 2017, 9:34am UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/149 "2017-12-11T09:34:17Z")
I’d want to invest in several countries AND several asset classes. The logistics of getting all this started might be frenetic for a while; perhaps buying a small private jet might be a first step, just to speed these logistics. 🙂 But I clicked on the Zombie because misconceptions by BOTH the pro-gold and anti-gold folks are a pet peeve! 🙂 > [@Schnitte](#): > > Let’s delve into detail on the claim that gold beats shares even including dividend payments. A good way to make that comparison is the German share index DAX, which compensates for dividens. … set up in 1988 … > That’s just one example, of course. But **Susannan** , I think if you make the point that gold performs better on the long run than shares, the burden to back this up with some data is on you. It _is_ too bad that graphs showing SP500 or DJIA with dividends reinvested are hard to come by, but note that a SP500 div-reinvested index would also have to subtract tax on those dividends for an apples-to-apples. But more importantly, the fact that you use a _German_ index starting in 1988 should have been a tip-off that something was amiss! \* **Susannan** mentioned a time scale of centuries or longer.\* You’re going to answer that with three decades of performance? Yes, you go on to mention an American index (though gold was valuable for several _thousand_ years before the Mayan Empire let alone Columbus) but (Google _Fallacy of Survival Bias_) … Why didn’t you stick with Germany and see how well its stock market did during the first half of the 20th century! 🙂 In any event, whether to go 20/25/20/20/10/5 for my allocation of US stock/Foreign stock/Bond/Land/Gold/Crypto or some slightly different set of numbers would be the least of my worries! Just for starters, I’m wondering who to trust to build the vault where I’ll put my ton of gold! ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [December 11, 2017, 2:12pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/150 "2017-12-11T14:12:16Z")
> [@](#): > > So I’m personally leaning towards keeping $500 million in cryptocurrencies (which will undoubtedly continue to rise and make me rich) Very doubtedly indeed. Oh, cryptocurrencies probably won’t crash tomorrow, but they’re going to go down eventually, and neither of us has any idea when. And the only reason the price of cryptocurrencies changes is different people making different guesses as to when that time will be. Never make any investment where you can’t see, in real terms, where the increase in value comes from. If a potato farmer buys a piece of land, then next year he’ll still have the land, plus a bunch of potatoes: The value has increased by the value of the potatoes. If a car manufacturer buys a bunch of new robots, then next year, they’ll still have the robots, plus all of the extra cars the robots helped make. You can even apply it to intangibles: If a jeweler buys a bunch of gold, and turns it into beautiful jewelry, then next year, he’ll have all of the additional value of the beauty of his craftsmanship. But with bitcoins, where is the extra value? ---
**Author:** ![Lumpy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lumpy/32/446_2.png) [@Lumpy](https://boards.straightdope.com/u/Lumpy)\ **Post date:** [December 11, 2017, 4:37pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/151 "2017-12-11T16:37:53Z")
> [@Knocks](#): > > - buy houses, cars, and women: $50 million > > Sound like a plan? Nitpick: you don’t buy women, you lease them. 😛 ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [December 11, 2017, 5:05pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/152 "2017-12-11T17:05:56Z")
I wonder if Susanann sold her gold in 2010, as it’s down about 25% since then. ---
**Author:** ![Knocks](https://avatars.discourse-cdn.com/v4/letter/k/96bed5/32.png) [@Knocks](https://boards.straightdope.com/u/Knocks)\ **Post date:** [December 12, 2017, 6:06am UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/153 "2017-12-12T06:06:51Z")
Susanann would benefit from reading this thread every once in a while: [Gold collapsing. Bitcoin UP](https://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16/). ---
**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:** [December 12, 2017, 7:08am UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/154 "2017-12-12T07:08:32Z")
> [@Knocks](#): > > …I am impressed with such in-depth knowledge of economics and clarity of arguments from most of the thread’s participants… I’m not. This one was particularly entertaining: > [@aruvqan](#): > > I have a friend who would love to win a lottery, as she would take the innediate payout, that has the taxes already paid … and keep it in safe deposit boxes so she doesnt get any interest on the money so she can piss off the tax people … her entire value in cash, not making any taxable interest. She would remove her annual allowance and deposit it into a non interest bearing checking account. If you buy bonds and receive interest on your money, you have to give about 40% of the interest to the government in tax. If you withdraw your money in banknotes and put them in a safe deposit boxes, you are lending your money interest-free to the government. Giving the government 100% of the interest rather than 40% of the interest is not likely to “piss off the tax people”. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [December 12, 2017, 7:40am UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/155 "2017-12-12T07:40:48Z")
With a billion dollars, you are going to want to DIVERSIFY. If you really have a billion dollars, understand that you can pay someone to devote their entire life to managing your money. A team, even. Smart decisions are within your grasp. You will want to have some of it in physical safes, in cash. How much makes you feel comfortable? I think $10-$50 million in cash is plenty to live on for the rest of your life, even if it does not grow by one penny. Cash in a safe. So, you have various properties spread out here and there, with millions of $$ on site, a manager paying the taxes and maintenance &etc. It is your property, you can go there and have a sandwich, play xbox, you are a billionaire after all, relax. Do put a significant amount into US treasury bonds. $100 million? It will generate an income into an account which you can access. Be careful that all this money does not corrupt and kill you! Spread your money out among various international bonds. EU bonds. Russian bonds. Japanese bonds. Chinese bonds. Do you get the idea? Go ahead and take the profits in various currencies, acquire international properties. You are going to be ok. I like dividend growth investments. Might as well explore this sector. You are mortal. Study philosophy. Plan to leave your money mostly to charity, to help the worthy of the world if nothing else. Please give at least some of your money to charity; history will remember you well this way, and not the awful sinful way you probably deserve to be remembered if you live a long time as a billionaire. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 12, 2017, 1:39pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/156 "2017-12-12T13:39:52Z")
> [@Susanann](#): > > Savings accounts of a $ billion dollars are not insured by the FDIC. > > IF the United States defaults on its currency, then holding bonds, or any dollar denominated asset would cause you to go bankrupt. > > IF the world economy goes into a Depression, then stocks would nosedive. > > **Gold:** On the other hand, a billion dollars in gold will hold its value and will survive currency defaults,wars, revolutions, Depressions, disease, and anything and everything else that we have seen in the past 5000 years. > > A billion dollars in gold is still a pretty physical small package. [https://goldprice.org/spot-gold.html](https://goldprice.org/spot-gold.html) Gold Spot price $1250 > **[All the Gold in the World - Visualized in Bullion Bars](https://demonocracy.info/infographics/world/gold/gold.html)** > > This is how all the gold in the world compressed into a pillar looks like. You would been 25+ tons of gold. Not a small physical package. Storage costs on that much gold is not prohibitive but still a lot. A billion dollars is not just wealth, it is dynastic wealth. Your great grand children will be able to live on the money without anyone between you and them ever lifting a finger to earn a buck. The way to preserve dynastic wealth is to ladder treasuries. Rates are really low right now but over several generations it all balances out. You will get about 2.5% return on your money, no state and local tax that amounts to about $15 million/year in income. As each step on your ladder matures, invest in more treasuries. if the US ever defaults on its debt, there will be no country in the world that will have a stable debt market. At that point bullets will be more valuable than gold. > **[Interest Rate Statistics](https://home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics?data=yield)** > > NOTICE: See Developer Notice on changes to the XML data feeds. Daily Treasury PAR Yield Curve Rates This par yield curve, which relates the par yield on a security to its time to maturity, is based on the closing market bid prices on the most... ---
**Author:** ![Shinna\_Minna\_Ma](https://avatars.discourse-cdn.com/v4/letter/s/f08c70/32.png) [@Shinna\_Minna\_Ma](https://boards.straightdope.com/u/Shinna_Minna_Ma)\ **Post date:** [December 12, 2017, 2:26pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/157 "2017-12-12T14:26:01Z")
You [buy a nail salon](https://www.youtube.com/watch?v=ez6xH-su2xI)! ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 12, 2017, 3:15pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/158 "2017-12-12T15:15:19Z")
> [@Knocks](#): > > I found this thread in 2017 after googling ideas about to invest 1 billion dollars. I am impressed with such in-depth knowledge of economics and clarity of arguments from most of the thread’s participants. > > The supreme irony of it all is that this discussion took place just a year or two before Bitcoin–an asset that some people want to be the ultimate store of value (i.e. gold) and others think is the future of currency (i.e. money)–started to take off. How different would have these answers been had this thread been started in 2017? 2018? 2019? > > But I didn’t create a Straight Dope account to derail a 7-year old thread. I am actually researching what to do with a billion dollars. A lot of people here recommend getting a money manager/financial advisor. Call me stingy, but I don’t like that those guys charge a percentage of the money under their management. I am also not impressed with their ability to actually manage money, not to mention that if the person you hire happens to be Bernie Madoff, you will lose the entire billion dollars and no one will ever reimburse you. > > So I’m personally leaning towards keeping $500 million in cryptocurrencies (which will undoubtedly continue to rise and make me rich); cashing out the other $500 million, paying a capital gains tax on it (if I can ever remember all the different transactions that I made over the years to prove my cost basis to the IRS), and using the remaining $350 million to: > > - buy an office building (skyscraper) in a decent U.S city for capital preservation and rental income: $150 million > - buy a mix of index funds and bonds for passive income: $100 million > - bootstrap a business in an industry that I care about, hire top talent, and attack life’s challenges: $50 million > - buy houses, cars, and women: $50 million > > Sound like a plan? Bitcoin? Really? Why not just put half your money into Facebook stock? ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [December 12, 2017, 4:15pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/159 "2017-12-12T16:15:38Z")
How many hundred dollar bills can be shoved into a standard king-sized mattress? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [December 12, 2017, 4:30pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/160 "2017-12-12T16:30:15Z")
[Priceless investment advice from the Simpsons.](https://www.youtube.com/watch?v=e6LOWKVq5sQ) [Previous page](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278.md?page=7) [Next page](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278.md?page=9)