Did I catch your eye with this wildly counterintuitive statement? Good. Are you saying "Bill Gates lives in a mansion on the shores of Lake Washington that is worth around 100 million dollars, which is obviously a lot more than 500 dollars?". Because that is a normal response to a statement that is factually false.

Finding the exact value of Bill Gates mansion is not an easy thing to do, and there are a number of ways to do so: the cost it took to make it, the property tax bill, and its market value. Its market value is kind of a theoretical quality, since 9 figure mansions are not a very liquid asset on the market. However, most sources estimate its worth around $100,000,000. That is a lot of money. It is also a nice round figure because most sources estimate Bill Gates current net worth at around $100,000,000,000. 100 million versus 100 billion. A quick and easy unit cancellation. Maybe Gates stock will go up and his home value will go down, and it will be 80 million versus 120 billion, or vice versa, but working with the spherical cows of money, we can quickly ascertain that Bill Gates' home represents 1 part in 1000 of his wealth.

And this is where the eye catching statement comes in. Compared to an "average" persons wealth, Bill Gates by comparison lives in a house that costs the equivalent of $500. Lets take an average college educated man in the Seattle area of Bill Gates age, and say that his net worth is 500,000 dollars. Once again, this is an estimate, and you can adjust it, but for a round figure, we can use it for now. If we take 1 part in 1000 of his wealth, it would equal around 500 dollars. So we can say that Bill Gates living in a $100,000,000 mansion is the equivalent of a typical well-to-do Seattlite living in a 500 dollar house. What would 500 dollars get you for a house, in Seattle? This is obviously a ridiculous question, because there is no way to build a legally-habitable house for that price. According to Zillow, the cheapest home for sale in Seattle is a $60,000 one-room houseboat. So imagine someone with 60 million dollars who chooses to live in a one-room house boat. That is what Bill Gates is in effect doing. His mansion, while one of the most expensive houses in the United States, represents a tiny fraction of his net worth on paper. For most Americans, their homes represent most of their net worth, and even for the wealthy, they are still a sizable portion of it. But for Bill Gates, his home represents literally what a new pair of shoes or dinner at a fancy restaurant would be to many middle class people.

The reason that this is hard to wrap our minds around is that for most of us out here, the amount of money involved are so far out of our reach that they all blur together. If most of us take the richest person we know---maybe someone who had good technical skills and worked up to management in a technology company---they probably have a few million dollars. That is pretty impressive to most of us. That is kind of on the level where their money still compares to normal money. But then take someone like LeBron James or Brad Pitt, a successful and well-known celebrity. They probably have money in the hundreds of millions of dollars range. They are probably 100 times richer than the richest person you know. But LeBron James and Brad Pitt have 100 times less money than people like Bill Gates or Jeff Bezos. The scale is hard to comprehend, and doesn't really tie in with any normal uses we have for money. Bill Gates has the same amount of assets as 100,000 millionaires, which is incredible, but Bill Gates also doesn't use as many resources as 100,000 millionaires.

And this is where this might go in a direction contrary to what many people would get out of this. Talking about how (literally) incredibly rich Bill Gates is might seem to be me launching into a complaint about oligarchy or wealth concentration, and while in one way it is that, in another way it is the opposite. Because lets say we skip over the entire Elizabeth Warren plan for a wealth tax and just went straight to appropriation of assets. The People's Revolutionary Coordinating Committee for Redistribution of Wealth seizes Bill Gates' house, and reassigns him to live in a houseboat. And then what? It is a 66,000 square foot house with many facilities, but what use could it be put to? It could probably be repurposed into a good inpatient clinic for a dozen, or a few dozen people, but what else? If you took all of Bill Gates' assets that he actually uses, as opposed to his paper wealth, what could you actually do with them? While Bill Gates has 100 billion on paper, the physical things he owns: this house, other houses, cars, boats, airplanes, probably total around a billion dollars altogether. That is a lot of money, but it still means that 99% of Bill Gates supposed fortune is financial instruments that are abstracted from reality. And the reason why I think Warren's plan for a wealth tax is a good idea is not because I think that wealth can do anything---because it is not translatable to actual physical property that is useful, but because it represents a ticking time bomb of pretend money that should be deflated.

I hope you don't mind my sneakiness here: I wanted to present the physical, and ridiculous, image of Bill Gates living in a corrugated tin shack, to tackle the more complicated issue of the fact that while the United States has a tremendous problem with wealth disparity, so much of that wealth is in the form of theoretical, abstract money, and not in the form of anything that could be used.

Log in or register to write something here or to contact authors.