Don't you just hate rich people?

I don't.

justjared.com

How dare he be rich!

This seems like an opportune time to restate the obvious. The obvious shouldn’t need restating because it’s, well, obvious.

But apparently a little restating is in order here:

Money is not real. It is not bread. It is not a house. It is not anything. And, no, the Fed doesn’t print all the money that there is. As I sometimes point out, governments can print money, but they can’t print prosperity. They can’t print value. The value of that money comes from elsewhere.

Now, here’s the obvious part, value is not directly related to money. Most of the value that exists in America was never bought, never paid for. Let’s take one example that’s been making the news, Jeff Bezos. Bezos paid 50 million recently for his wedding. Where did that money come from? Bezos is worth about 244 billion, according AI. Does that mean he has 244 billion in the bank? No, it does not. Has he bought 244 billion dollars worth of stuff? Not even close. COULD he buy 244 billion dollars worth of stuff. No, he could not. We do know that he can spend 50 million on a wedding. And that seems to piss some people off. Let’s consider:

Where did 50 million come from? Where did 244 billion come from? The short answer is that he created it inside Amazon. He created Amazon on his kitchen table with his imagination and no more money than a lot of us have. But while a lot of us were doing other things, Bezos was testing out the internet, suspecting that it would open up huge markets. He wasn’t the first to see that. Others were into selling music (Napster) and the like. Bezos wanted to go after an internet market that no one else had yet touched. He chose books. He literally sold them one at a time, from his kitchen table. You could have done the same, but you didn’t. Neither did I.

We know how it turned out. Bezos blazed trails on the internet. Amazon did things that nobody else did. And, like many businesses, he went public. That is, he sold shares of Amazon, available to the public. This was essential, since for years he put more money into the business than he took out. He needed the money. In 1997 Amazon went public, with an IPO (Initial Public Offering). You could have bought shares for $18/ea. If you had bought $1000 worth of shares then, they would be worth over 2 million today. What’s that? You didn’t buy any? Neither did I.

Believe it or not, the success of Amazon was not a sure thing back then. We could have lost any money we put in. The stock went up and down and was by no means an instant success. It was a good fifteen years before Amazon started to be the giant that it has become. None of it was an accident, none of it was luck. It took hard work, long hours, risk taking, and smarts.

If my information is correct, Bezos received 555 shares of stock in that IPO, which, at $18, gave him a value of about $10,000. The day before, those shares had no value. No money changed hands. Remember that most wealth accrues in a similar manner. It does NOT involve rich people stealing from poor people.

There have been subsequent issues of stock, of which Bezos got a certain percentage. He is now worth 244 billion. He was never paid 244 billion. There has never been 244 billion. Still, his investments are worth 244 billion. They are worth it because of the efforts and risks that Bezos and partners have taken, the value that they have created.

But, hey, we were talking about a wedding, remember? Most likely, that 50 million wasn’t sitting in a bank. Rather, it was the value in stock that Bezos sold to pay for the wedding. When he sold that stock, that was the FIRST time that actual money changed hands.

OK, that’s where the money came from, where did it go? It went to hotels and their staff, to wedding planners, musicians, dress makers, gondoliers, food services and on and on. Think about it. Bezos made 50 million appear out of nowhere, and put that 50 million into the economy. And he did it with value he created in his company, not by printing it, like governmets do. When governments print money, it devalues your money. That’s why your money buys so much less now.

People are PO’d at Bezos for being rich. Never mind that he created that wealth, that value. He didn’t take it from anyone. He took 50 million of that value and converted it to cash at a cost of nothing to nobody, and he spread that wealth around. Do you really think it would have been better if he hadn’t sold that stock?

Oh, but he could have given it to charity. In fact, like most wealthy people, he has given far more than 50 million to charity.

I have seen many occasions where rich people threw money around and people resented it. Why? Is it better when they DON’T throw it around? When they throw it around, other people get that money. In my time, I have gotten some of that money. Thank you very much, rich people.

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