If you have a billion dollars, how many generations could your descendants live off

[yurbud]

the interest before one of them has to get a job?

[xultar]

1. none of them. I'm gonna have the funeral director fill and paper mache mummy

my body with it.

BUHWAWAWAWAWA!

[Zynx]

2. Almost an infinite number since the interest would be so substantial that the account would continue

to grow even with heavy withdrawals. Inflation might eventually somewhat catch up with it if it was invested too conservatively, but that would be so far down the road.

[yurbud]

3. what if descendants spent ALL the interest, so that every generation would further divide

the principal?

[barbiegeek]

7. They NEVER spend the principle

They live off the interest

[yurbud]

17. for the sake of the hypothetical, assume they spend all the interest though

[Warpy]

4. Look at it this way

An obscenely rich plutocrat finally married the silicone padded trophy wife of his adolescent dreams. The only fly in the ointment was that her mother was to accompany them everywhere, even on the honeymoon. Not wanting Mom around to cramp his style, he decided to send her shopping with a thousand bucks a day.

If he gave her a million, she'd be gone for just under three years.

If he gave her a billion, she'd be gone for almost three thousand years.

That kind of puts it into perspective, I think.

[Fleshdancer]

5. None. It would all be donated.

Raising your children to believe that they don't have to work is bad parenting.

[Spike89]

11. Really? Even if they truly don't "have" to work?

I value hard work, but I don't worship the concept. Not having to earn is not the same as not teaching your kids to strive, to create, and to participate. I'd agree with you if it was a binary decision to work or sit on your ass, but in the real world there are options besides sitting on your ass. I know plenty of retired people that don't "work" but do some truly wonderful things with their time.

[Fleshdancer]

18. I believe....

that as a parent, it's my job to teach my child to survive in this world long after I'm gone. It's not so much about earning as it is about self sufficiency, experiencing consequences when bad actions are chosen, and rewards when choosing right decisions. I'm not convinced these lessons are learned when children inherit massive wealth.

[yurbud]

21. that's part of my point: how many generations of spoiled trust fund babies would we

be burdened with from $1 billion?

[Burma Jones]

6. Depends on how much the damned Socialists take away from me goddamnit

Bunch of bellyaching do-nothings.....My money works hard for more money and me and my descendants deserve every fucking dollar of that money......



You did say a Billion Dollars and I don't know, but THAT much money might turn me into a complete Douchebag......

[barbiegeek]

8. Like They really have your money in US Banks

your funny

[Burma Jones]

15. True 'Dat..........

[yodoobo]

9. Probably about 5 or 6 generations

or about 100 years. But its pretty much impossible to predict.



Inheritance tax would take a good chunk at each generation.

At about generation 6, the number of people supported could be in the hundreds. (we are assuming that all descendants get an equal share)

assuming no losses and no taxes and no growth, in about 100 years 1 Billion would have the buying power of about 10 million.

Forgetting about inheritances taxes lets compile those assumptions

10 million dollars supporting 100 people would be about $100,000 per person. Even at 10% interest that would be only about $10k per year(in today's dollars).

Adding interest/growth back in (and keeping taxes out), you could probably stretch it to 7 or 8 generations, but at that point dividing the pie is going to be a much stronger force than compound interest, so 8 generations would probably be max limit.



Now if your talking about first born, direct descendants. Then that money/power could last for thousands of years.

[Juche]

10. Supposedly fortune is destroyed within 3 generations

I think 60% of the time it is gone by the time the kids get it, 90% by the time the grandkids get it. The reason is people don't learn the value of money if they have too big an inheritance.

But if you do it right, forever. You can easily keep up with inflation and lead a decent lifestyle for a small fraction of a billion when it is invested. Five million, when invested and after adjusting for inflation could pay you 100-200k a year.

[Johonny]

12. That's what I heard before too.

[yurbud]

20. so to get to five million is 200 descendants... if every generation had two kids...

I'm bad at math.

between 20 and 21 generations I think.

assuming everyone had kids at 20, that's 400 years of coasting.

If they waited until 30, it would be six hundred years.

[Juche]

27. It'd actually be eternal

Eternity I tells ya.

If you have a billion and you invest it in a safe investment that pays 2% a year after inflation and taxes, that is 20 million a year in new income.

If it only takes 5 million invested once to keep someone in a nice lifestyle for life (100k a year after taxes/inflation, which is a really nice lifestyle), then after just one year with a billion invested safely you have enough money to support 4 additional people.

And because the money compounds it actually grows faster than that (4 a year). After 10 years you have an extra 220 million, and can support an additional 44 people.

So basically eternity. Within 15 years you have enough new income from investments to support the next 5 generations of kids on 5 million each.

Well, maybe not eternity. I'm not too good at math either. A pool of needy people that doubles every 20 years is eventually going to outstrip finances that double every 35 years.

[4lbs]

13. It should be literally forever, unless one of them really screws up badly.

People with a billion actual liquid dollars get great interest rates. Not the meager 1% we lower-class people would get. They would get about 10% at the minimum (and the banks use that money for credit card funding which they charge people 20% and make lots of money).

So, that's at least $100 million annually in interest.

Take away 40% in taxes, and you are left with $60 million a year, or $5 million monthly, all without ever touching the original principal amount.

If you had 100 descendants over 5 generations, that's $50K monthly for each person for the rest of their lives, all without ever touching the original $1 billion.

1000 descendants over 10 generations? Each gets $5,000 monthly for the rest of their lives, AFTER TAXES, without eating into the original $1 billion.

[TreasonousBastard]

14. Depends on a lot of things...

the Rockefeller money isn't exactly running out, but it's been so divided over the generations of so many heirs that none of them feel very rich any more.

There's a lot more Mars money around, but the heirs are kinda required to actually work making at M&M's and stuff.

Now, if you're talking living strictly off returns from the original fortune, while reinvesting half of the returns, you're talking a kind of an annuity and that could go on for a long time. Assuming no taxes were paid (HA!) and a steady return of 10%, the billion gives you 50 million a year after reivesting half of the returns. Then it gives you 52.5 million the next year. And so on... But, inflation eats up maybe half of the returns each year, so the payout doens't increase in real dollars.

So, every year the return increases by over a million, while every year just how many new heirs appear? At some point inflation and the increase in heirs will mean the millions generated won't give everyone a decent income any more, but I'm not going to go through all the permutations of when that could happen.

(three kids + 5 spouses + eight grandkids = eighteen just two generations down... 50 million / 18 = 2 3/4 million each-- not bad, but it won't be long before it gets down to the breadlines)

[Fla_Democrat]

16. Dunno, cut me a check

and I'll have it put in my will that they have to come back and post updates. :evilgrin:

[harun]

19. None.

At least none living off of the interest. I would give 2.5% of it each year to charity. They could use it to start business's or invest but they wouldn't be allowed to do straight interest.

[Ozymanithrax]

22. Until the next banking crises, then you and your kids starve to death...

If it is just in savaings, it will be eatern up over time by inflation.

Put it in the stock market, and you may do OK for a while, but the Stock Market crashes are part of the system.

Have it involved with the wrong banks during a banking crises and goodby money.

[Lydia Leftcoast]

23. If I had a billion dollars and descendants (both hypotheticals)

I would set up a trust fund that said that they couldn't touch it till age 40 with the following exceptions:

1. Total disability or bankrupting medical bills

2. Unemployment benefits running out or inability to find a job for six months or six months of negative earnings in a business

3. Tuition room and board at an accredited college



Two reasons for this:

1. Too much money too young is bad for a person in more ways than I can count. They should have the experience of struggling and making their own way.

2. Forty is when people start having midlife crises. If they want to start over, the money will let them.

[jaksavage]

24. Makes lots of young republicans

I have friends who will inherit, it rots their soul.

Had a friend whos granny gave her $100,000 in blue chips in 1967, worth over 5 million in 1999. She dabbles in real estate. At a major colorado ski area!

Close to home I know someone who recieves a pension from a deceased spouse. The extra 2000 a month helps the family with kids and grandkids get along nicely, but they all have to work.

Passing money down insures inequality.

[yurbud]

26. I think it was Warren Buffet who said he wants to leave enough for his kids that...

they can do anything they want, but not so much they can do nothing.

That's a pretty good rule of thumb.

[zbdent]

25. first ... none ... my wife and I have no kids ...

but ...

If you have a billion sitting around, I will give it a try to see how long I can live off it without needing a job ...

oops, I guess that buying an NFL team would just blow it immediately ...