Money can buy you love... of money
Money, for most of us, is an object that allows us to enjoy the materialistic pleasures of this overwhelmingly materialistic life.!-- more»Updated:
Money, for most of us, is an object that allows us to enjoy the materialistic pleasures of this overwhelmingly materialistic life. It is, after all, a tool used in a sophisticated barter system in which we exchange currency in its various forms for objects and services that gives us pleasure and security. But what is money for the super-rich, by which one means those billionaires who can afford to use millions as bait to catch more millions? According to economist Christopher Carroll at the Johns Hopkins University, these billionaires are a different kettle of fish — and not like the rest of us swimming about amassing wealth to exchange it for goodies. In a National Bureau of Economic Research paper titled, ‘Why do the rich save so much?’, Carroll posits the theory that the super-rich actually make so much money because they love money — much more than the things that money can buy.
The super-rich, states Carroll, can’t accumulate the amounts of money they have with the intention of spending it because it is not humanly possible to spend such an amount. He gives the example of Oracle founder Lawrence J. Ellison, whose net worth in 2006 was around $ 16 billion, a figure that should increase when the Forbes list of richest people is out later this month. With a 10 per cent rate of return, Mr Ellison will need to spend more than $ 30 million — $ 183,000 an hour — a week to keep from accumulating more money than he already has. Buying assets like property won’t help Mr Ellison ‘spend’ — in the classical sense of ‘losing that flab’. And one can only throw so many parties and have so many meals to make use of that kind of money. Also, the amount is so humungous that even his heirs will face the same ‘problems’ of spending that he does.
So people like Mr Ellison must be saving so much because they simply love money. Considering that there aren’t too many billionaires like Warren Buffet, who gave $ 42 billion to charity last year, perhaps there is an intrinsic reason why the rest of us get succour from the idea that the best things in life are free.
First Published: Mar 03, 2007 06:41 IST