avatarDenis Gorbunov

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The Hidden Cost of Wealth the Rich Don’t Want You to Know

You probably enjoy more freedom than them!

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I never thought I’d come to this realization.

But I did.

No more chasing a billion dollars. I want to be financially free but I also want to live stress-free.

Because billion-dollar stuff can keep you awake at night.

What You (Must) Do With Your Money

The best job description for your billionaire self becomes a ‘ruthless manager’.

You don’t make billions by buying an index fund and waiting for compound interest for 60 years.

You create a novel product and scale its production by setting up a business. You hire and fire people. You make sure they make you money.

If a team of 30 can do the work of 50, you slash 20 lazy asses and reinvest the saved costs.

That’s the foundation of your fortune.

There’s a problem, though.

The stage is yours. Everyone’s watching you. Be prepared to give away $20 million, especially if you betray your investors’ trust.

If you’re mega-rich, your fortune isn’t stuffed under the mattress. You can’t simply spend it in a shopping mall. Your wealth is complex:

  • Bonds
  • Stocks
  • Real estate
  • Private equity
  • Cryptocurrencies

You don’t open your brokerage account and sell a stock. Your money managers fret over market cycles and earnings calls.

So what do you do? You focus on the really important stuff.

For example, you tweet that Dogecoin rocks and make money on it. Or just have fun watching it rise to the Moon and then plunge like a brick.

You have a different notion of money than regular folks.

We have needs and wants. The needs — food and shelter — require little money.

The wants can drive us bankrupt.

Being mega-rich, you’ve covered your needs for the next 10,000 years without having to work again. Inflation-adjusted.

So you focus on your wants. This is what your money is for. You live only once.

There’s another problem: Your assets are not entirely yours.

Let’s take the already obvious protagonist.

Elon holds $90 billion of Tesla stock. If you were his friend, would he sell Tesla shares worth a couple of billion dollars

  • to give you a village looking out onto the Swiss Alps?
  • to invite you on a trip to Vegas and buy an entire casino for you?

Probably not. Even if he’s very fond of you.

What will happen if Elon suddenly dumps his Tesla stock?

The opposite of the soaring Twitter stock when Elon announced his 9% ownership.

Tesla stock will fall harder than a lead balloon dropped from the sky.

Elon must disclose his buys and sells. There’s a strong public response to every move he makes. People assume he acts on insider information… which may be true.

Or he may be just having fun. A billion here. A billion there.

Does it make any difference?

Elon is an almighty finance-business-investment guru. But he has constraints.

Much of his wealth is concentrated in a few companies. Their survival strongly depends on what he does.

He holds his stake, people believe the company is doing fine.

He sells, people run away in panic.

Tesla loses its ‘Buy’ rating. The S&P 500 dips. Experts begin talking about a recession. My grandmother asks me who the hell Elon is and why he’s bankrupting the economy.

Too many people depend on Elon’s actions.

And Elon depends on too many people to keep his wealth.

This is the hidden cost of wealth.

You should be happy you’re not mega-rich. You’re probably more free than the truly wealthy.

Discover the tips on building wealth the rich don’t want you to know in my newsletter ‘Stay Invested’

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