I think that, somewhere north of $1 ~ $5 million is life-changing on its own. There’s no need for someone to have tens of millions or hundreds of millions. Tens of millions is like, changing multiple lives in a family with how much that can stretch.
Whenever someone has billions to their name, it is boggling to think about. That it becomes just ‘fuck you’ money at that point because more often than not, not a lot of billionaires out there being charitable. When they know they’re set for a few lifetimes just by a single billion alone.
No single person should ever have that amount of gross wealth.
A simple estimation based on investing that amount of money into a total world stock market index fund (e.g. VTWAX) would be your yearly expenses divided by 3.25% (pretty conservative rate). The idea is that you withdraw 3.25% of your wealth from the stock market every year, and you’ll be able to withdraw that much purchasing power every year forever due to compound interest pushing the number up as you withdraw. Realistically if you’re not withdrawing the full amount blindly during market downturns you can kick that number up to 4% or even more, but 3.25-3.5% is basically impossible to go broke with, and most likely will quickly increase your nest egg to double/triple/etc in most universes.
So, if my expenses were 50k/year in post-tax money, I would need to invest ~1.5 million in order to withdraw 50k of “free” money per year forever, inflation-adjusted. You can do the rest of the math on how many post-tax expenses a normal person/family has and will quickly reach the conclusion that hey, a billion dollars is kinda fucking crazy.
Historically it has not been enough to draw down funds that are invested in a broad American stock market index like the S&P500. But that doesn’t make it impossible. A 20-30 year run that looks like the Nikkei 225 between 1990 and 2020 could wipe out portfolios on a 3% withdrawal rate. Even a 2% withdrawal rate would’ve run out of money in 32 years.
I’m kinda bearish about the continued dominance of the “invest in publicly traded large cap American equities” strategy over the coming decades, so I’m a bit more conservative in my savings rate, and what securities/assets I’m actually invested in, including soft assets like my own earning ability if I were to bail on this country and move somewhere else (fluency in another language, job skill sets that translate outside of the US borders, relationships/network with people who don’t rely on the US).
And I know that’s not the central point you’re making. But there are plenty of people who might not feel secure with $1.5 million or even $3 million or $6 million in investible wealth, especially if it’s tied up in one particular asset or asset class, or otherwise less liquid than publicly traded securities.
This right here is why everything is so fucked up.