[Are there any] Billionaire Boglehead!!!

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Canogapark66
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[Are there any] Billionaire Boglehead!!!

Post by Canogapark66 » Mon Dec 23, 2013 1:53 pm

Are there any Billionaire Bogleheads? ... Based on my calculations, a high earning income individual that is frugal and financially disciplined and sets up a three fund portfolio bolgehead style, they should eventually (1-2 generations) be able to create 1+ billion dollars of wealth for their family. I guess my question is:

1) Has anyone set out to do this? If not why? whats holding them back? lifestyle? goals? etc? Have the boglehead views just not been around that long?

2) Other than transferring wealth once passed and heirs blowing it, what other downfalls can there be with this plan?

3) Ideas, thoughts welcome!

Thanks!

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Re: Billionaire Boglehead!!!

Post by VictoriaF » Mon Dec 23, 2013 1:57 pm

The Bogleheads have not existed long enough to account for several generations of wealth building. Given enough time--or high enough inflation--there will be some billionaires in our ranks.

Victoria
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Re: Billionaire Boglehead!!!

Post by linenfort » Mon Dec 23, 2013 2:00 pm

Seems a bit high. Even if a million dollars fell into your lap and then you had 40 years to invest it, you'd need a CAGR of almost 19% to make a billion.
http://www.moneychimp.com/calculator/di ... ulator.htm

Well there is a billionaire Bogle. :happy
Is it too early for an all-bond-portfolio thread?

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Re: Billionaire Boglehead!!!

Post by The Wizard » Mon Dec 23, 2013 2:01 pm

We had a net worth vs age poll a year ago which was insightful.
I don't seem to recall any reported net worth values over $100M but perhaps those outliers got truncated?
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Re: Billionaire Boglehead!!!

Post by englishgirl » Mon Dec 23, 2013 2:02 pm

Given enough inflation, I'm sure all of our descendants could eventually become billionaires.
Sarah

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Re: Billionaire Boglehead!!!

Post by Canogapark66 » Mon Dec 23, 2013 2:09 pm

linenfort wrote:Seems a bit high. Even if a million dollars fell into your lap and then you had 40 years to invest it, you'd need a CAGR of almost 19% to make a billion.
http://www.moneychimp.com/calculator/di ... ulator.htm

Well there is a billionaire Bogle. :happy

linenfort:

I am talking over 1-2 Generations... Meaning 100+ years of saving/compounding... Now just 40 years to invest...

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Re: Billionaire Boglehead!!!

Post by Canogapark66 » Mon Dec 23, 2013 2:10 pm

friar1610 wrote:Here's a related question that I've thought about from time-to-time. (I don't mean to hijack this thread, so if it's appropriate to move to another thread, the moderator should do so.)

What if you are a Boglehead - three fund port or a slice-and-dicer with perhaps no more than 6-8 funds - and also fairly frugal. You hit one of the really Powerball or Megabucks jackpots and end up with, let's say,
a $50M lump-sum after taxes. Do you just allocate that humungous amount across your Boglehead portfolio or do you now need "professional" money management where you pay a fee to have someone put you in more sophisticated investments?

This is a dilemma I would love to have personally.
NO Hi-Jacking Please... This is unrelated, please move this to another thread [I moved it, see: [Billionaire Boglehead!!! How to allocate your portfolio?] --admin LadyGeek]

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Re: Billionaire Boglehead!!!

Post by linenfort » Mon Dec 23, 2013 2:28 pm

I guess it's like Victoria said. We haven't had enough generations yet.
And of course not every fortunate heir to a Boglehead will stick with the plan, but it's only a matter of time before someone does.
Is it too early for an all-bond-portfolio thread?

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Re: Billionaire Boglehead!!!

Post by The Wizard » Mon Dec 23, 2013 2:29 pm

All we have to do is get Sergey Brin to sign up here and swear allegiance to Staying the Course and we've got one.
How hard can that be?

And the OP is asking about billionaire right now, 2013, not five years from now...
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Re: Billionaire Boglehead!!!

Post by femur » Mon Dec 23, 2013 2:36 pm

3) Ideas, thoughts welcome!
Ill have my great-grandson update the thread in the year 2110 or so and let you know :)

(im 31 years old)

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Re: Billionaire Boglehead!!!

Post by JoMoney » Mon Dec 23, 2013 3:02 pm

I don't care to be the richest corpse in the graveyard. At this point, I'm still focused on getting to the point of having more than I need. I hope to someday be trying to figure out how to create a legacy, but that's putting the cart before the horse.
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Re: Billionaire Boglehead!!!

Post by bucksfan2 » Mon Dec 23, 2013 3:17 pm

Canogapark66 wrote:Are there any Billionaire Bogleheads? ... Based on my calculations, a high earning income individual that is frugal and financially disciplined and sets up a three fund portfolio bolgehead style, they should eventually (1-2 generations) be able to create 1+ billion dollars of wealth for their family. I guess my question is:

1) Has anyone set out to do this? If not why? whats holding them back? lifestyle? goals? etc? Have the boglehead views just not been around that long?

2) Other than transferring wealth once passed and heirs blowing it, what other downfalls can there be with this plan?

3) Ideas, thoughts welcome!

Thanks!
What is the point? Being worth a billion and living frugally doesn't sound like all that much fun. I would much rather build a nice nest egg for myself and family and enjoy life. Lord knows no one makes it out of this life alive, why not enjoy yourself?

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Re: Billionaire Boglehead!!!

Post by hsv_climber » Mon Dec 23, 2013 3:20 pm

friar1610 wrote: What if you are a Boglehead - three fund port or a slice-and-dicer with perhaps no more than 6-8 funds - and also fairly frugal. You hit one of the really Powerball or Megabucks jackpots and end up with, let's say,
a $50M lump-sum after taxes.
One of the rules to win a lottery is to buy a ticket, which contradicts to the definition of the "frugal Boglehead".

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Re: Billionaire Boglehead!!!

Post by linenfort » Mon Dec 23, 2013 3:22 pm

The OP wrote: 2) Other than transferring wealth once passed and heirs blowing it, what other downfalls can there be with this plan?
Not exactly a downfall, but some Bogleheads might choose not to give the bulk of their wealth to their offspring, like Bill Gates has chosen not to.


The Wizard wrote:And the OP is asking about billionaire right now, 2013, not five years from now...
Well that's the confusing part. The opening statement is
Are there any Billionaire Bogleheads?
However, a good part of the rest of the text seems to be concerned with the future. Not right now. Not 2013.

My parents invested in the 500 index fund pretty early on. They're still alive and well, knock on wood. So, there has not been any wealth transfer from them to me, let alone to the next generation. If the Vanguard Group was founded in 1975 and you want to talk about 2013, exactly how many generations are we supposed to squeeze out of this time frame? Or are we supposed to find Boglehead-like investors whose investments predate index funds?
Last edited by linenfort on Mon Dec 23, 2013 3:25 pm, edited 2 times in total.
Is it too early for an all-bond-portfolio thread?

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Re: Billionaire Boglehead!!!

Post by Canogapark66 » Mon Dec 23, 2013 3:24 pm

bucksfan2 wrote:
Canogapark66 wrote:Are there any Billionaire Bogleheads? ... Based on my calculations, a high earning income individual that is frugal and financially disciplined and sets up a three fund portfolio bolgehead style, they should eventually (1-2 generations) be able to create 1+ billion dollars of wealth for their family. I guess my question is:

1) Has anyone set out to do this? If not why? whats holding them back? lifestyle? goals? etc? Have the boglehead views just not been around that long?

2) Other than transferring wealth once passed and heirs blowing it, what other downfalls can there be with this plan?

3) Ideas, thoughts welcome!

Thanks!
What is the point? Being worth a billion and living frugally doesn't sound like all that much fun. I would much rather build a nice nest egg for myself and family and enjoy life. Lord knows no one makes it out of this life alive, why not enjoy yourself?
I think its possible to do both, I am 28 yrs old and have a very nice sized portfolio and I plan to build wealth for me and my family, but am also planning to help my children and their future family build wealth by setting guidelines for keeping and continuing to build wealth.

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Re: Billionaire Boglehead!!!

Post by Mel Lindauer » Mon Dec 23, 2013 3:37 pm

linenfort wrote:Seems a bit high. Even if a million dollars fell into your lap and then you had 40 years to invest it, you'd need a CAGR of almost 19% to make a billion.
http://www.moneychimp.com/calculator/di ... ulator.htm

Well there is a billionaire Bogle. :happy
Even though other mutual fund founders have become multi-billionaires, Jack Bogle is not one of them. The way he set up Vanguard means that the billions that could have been in his pocket are now in our pockets, because we the Vanguard shareholders are the owners and beneficiaries of Jack's largess.
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Re: Billionaire Boglehead!!!

Post by hoopy » Mon Dec 23, 2013 3:39 pm

There are books that discuss this kind of thing, i.e. intergenerational wealth transfers, and how to make sure family wealth is durable. They don't have an explicit goal of growing family money to a billion, that would make their books "get rich quick"-y.

A couple of interesting ones I read a few years ago are:
- Wealth: Grow It and Protect It by Lucas.
- Family Wealth: Keeping It in the Family--How Family Members and Their Advisers Preserve Human, Intellectual, and Financial Assets for Generations by James E. Hughes

I forget which one it is, I think it may be the one by Hughes, where he talks about how to prepare the next generation for wealth, so they don't fritter it away. Both of these books are written for people who already have a lot of money. If you look at them on amazon, you'll see a lot of similar books recommended to you. This appears to be a flourishing but low-key sub-genre of financial literature.

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Re: Billionaire Boglehead!!!

Post by travellight » Mon Dec 23, 2013 3:49 pm

Some Bogleheads could get to the next decimal point down (100 million) by the time they check out.

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Re: Billionaire Boglehead!!!

Post by VictoriaF » Mon Dec 23, 2013 3:51 pm

travellight wrote:Some Bogleheads could get to the next decimal point down (100 million) by the time they check out.
Is there a form I could check to get my 100 mil?

Victoria
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Re: Billionaire Boglehead!!!

Post by travellight » Mon Dec 23, 2013 3:59 pm

lol, Victoria... I was being a bit too brief and pithy.

I ran some firecalc numbers and someone with a 48 year horizon who is worth 4 million has a chance of getting over 100 million in net worth. And that is spending a lavish 80k per year.

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Re: Billionaire Boglehead!!!

Post by The Wizard » Mon Dec 23, 2013 4:00 pm

linenfort wrote:I guess it's like Victoria said. We haven't had enough generations yet.
And of course not every fortunate heir to a Boglehead will stick with the plan, but it's only a matter of time before someone does.
Actually, we have plenty of generations if you start counting in 1930 or thereabouts.
Of course Bogleheads and mutual funds weren't around then, but you have to start someplace.
Best way to become a billionaire (in 2013 dollars) is to start a big company like US Steel, Microsoft, or Google.
Even if one had a million dollar salary starting in 2000, it would be practically impossible to grow it to $1 Billion in forty years without the multiplier effect that comes from starting a successful company.
And that's the way it is...
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Re: Billionaire Boglehead!!!

Post by VictoriaF » Mon Dec 23, 2013 4:04 pm

The Wizard wrote:
linenfort wrote:I guess it's like Victoria said. We haven't had enough generations yet.
And of course not every fortunate heir to a Boglehead will stick with the plan, but it's only a matter of time before someone does.
Actually, we have plenty of generations if you start counting in 1930 or thereabouts.
Of course Bogleheads and mutual funds weren't around then, but you have to start someplace.
Best way to become a billionaire (in 2013 dollars) is to start a big company like US Steel, Microsoft, or Google.
Even if one had a million dollar salary starting in 2000, it would be practically impossible to grow it to $1 Billion in forty years without the multiplier effect that comes from starting a successful company.
And that's the way it is...
As The Wizard, you have special powers to bypass both working for a company and starting a company. A billion should be yours in a snap.

Victoria
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Re: Billionaire Boglehead!!!

Post by The Wizard » Mon Dec 23, 2013 4:07 pm

VictoriaF wrote:
As The Wizard, you have special powers to bypass both working for a company and starting a company. A billion should be yours in a snap.

Victoria
You might think so, but actually, I have very little entrepreneurial vigor.
There are times when I just like to get away and go for a hike...
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Re: Billionaire Boglehead!!!

Post by Garco » Mon Dec 23, 2013 4:10 pm

@CanogaPark, I wonder whether there are any billionnaires -- Bogleheads or not -- who hail from Canoga Park. I lived there way back when (1950's), even attended Canoga Elementary for a few years. But people tended to move to the edges of the S.F. Valley. Some of the original founders of the Valley were anything but Boglehead in their thinking. Think "Chinatown" more than what the good man Jack has done.

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Re: Billionaire Boglehead!!!

Post by Canogapark66 » Mon Dec 23, 2013 4:19 pm

The Wizard wrote:And the OP is asking about billionaire right now, 2013, not five years from now...
Well that's the confusing part. The opening statement is
Are there any Billionaire Bogleheads?
However, a good part of the rest of the text seems to be concerned with the future. Not right now. Not 2013.

Talking about the future, not right now. I haven't heard of or found any long term index fund market holding type bogleheads that have held for long enough.

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Re: Billionaire Boglehead!!!

Post by linenfort » Mon Dec 23, 2013 4:21 pm

Mel Lindauer wrote:
linenfort wrote:Seems a bit high. Even if a million dollars fell into your lap and then you had 40 years to invest it, you'd need a CAGR of almost 19% to make a billion.
http://www.moneychimp.com/calculator/di ... ulator.htm

Well there is a billionaire Bogle. :happy
Even though other mutual fund founders have become multi-billionaires, Jack Bogle is not one of them. The way he set up Vanguard means that the billions that could have been in his pocket are now in our pockets, because we the Vanguard shareholders are the owners and beneficiaries of Jack's largess.
Is he not a single-billion billionaire? Whether he is or not, I will count him as one generation before my parents, since he made all this possible. (Dad loved stocks before he discovered index funds).

I love that Vanguard investors are co-owners of the funds. It's one of the reasons Vanguard is my main brokerage house.
----
One of the posts above mentions Canoga Park. Ever since I saw canogapark66's user name, I have wondered (before this thread) if s/he has seen the tourist ad parody on youtube.
Is it too early for an all-bond-portfolio thread?

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Re: Billionaire Boglehead!!!

Post by Mel Lindauer » Mon Dec 23, 2013 6:08 pm

linenfort wrote:
Mel Lindauer wrote:
linenfort wrote:Seems a bit high. Even if a million dollars fell into your lap and then you had 40 years to invest it, you'd need a CAGR of almost 19% to make a billion.
http://www.moneychimp.com/calculator/di ... ulator.htm

Well there is a billionaire Bogle. :happy
Even though other mutual fund founders have become multi-billionaires, Jack Bogle is not one of them. The way he set up Vanguard means that the billions that could have been in his pocket are now in our pockets, because we the Vanguard shareholders are the owners and beneficiaries of Jack's largess.
Is he not a single-billion billionaire? Whether he is or not, I will count him as one generation before my parents, since he made all this possible. (Dad loved stocks before he discovered index funds).

I love that Vanguard investors are co-owners of the funds. It's one of the reasons Vanguard is my main brokerage house.
----
One of the posts above mentions Canoga Park. Ever since I saw canogapark66's user name, I have wondered (before this thread) if s/he has seen the tourist ad parody on youtube.
He's not even close to being a billionaire. I think he's openly said his wealth is in the low eight figures. He gives half of his income to charity, so he's definitely not aiming for billionaire status.
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Re: Billionaire Boglehead!!!

Post by stemikger » Mon Dec 23, 2013 6:26 pm

Canogapark66 wrote:Are there any Billionaire Bogleheads? ... Based on my calculations, a high earning income individual that is frugal and financially disciplined and sets up a three fund portfolio bolgehead style, they should eventually (1-2 generations) be able to create 1+ billion dollars of wealth for their family. I guess my question is:

1) Has anyone set out to do this? If not why? whats holding them back? lifestyle? goals? etc? Have the boglehead views just not been around that long?

2) Other than transferring wealth once passed and heirs blowing it, what other downfalls can there be with this plan?

3) Ideas, thoughts welcome!

Thanks!
To me, being a Boglehead is knowing when you have enough which is something many billionaires will never have.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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Re: Billionaire Boglehead!!!

Post by InvestorNewb » Mon Dec 23, 2013 6:32 pm

Anyone with mega millions or billions is better off building their own portfolio with individual stocks. Just think about how much they would save in fees.

0.05% may not seem like a lot, but it is at that level.
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Re: Billionaire Boglehead!!!

Post by cfs » Mon Dec 23, 2013 6:33 pm

Thanks for asking. Are you kidding me? That billion is one billion miles away, but the goal should be to reach the land of critical mass, that point in your life when you work because you want to and not because you have to. Thanks for reading and have a Merry Christmas.
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Re: Billionaire Boglehead!!!

Post by FrugalInvestor » Mon Dec 23, 2013 6:39 pm

Canogapark66 wrote:[I think its possible to do both, I am 28 yrs old and have a very nice sized portfolio and I plan to build wealth for me and my family, but am also planning to help my children and their future family build wealth by setting guidelines for keeping and continuing to build wealth.
You can set guidelines but you can't force people to follow them. That's the biggest impediment to building wealth for future generations. Being given wealth and being able to handle it well are often incompatible with one another.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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Re: Billionaire Boglehead!!!

Post by J295 » Mon Dec 23, 2013 6:52 pm

In making hypothetical calculations for multiple generation accumulation don't forget estate tax implications.

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Re: Billionaire Boglehead!!!

Post by Abe » Mon Dec 23, 2013 7:03 pm

It's more interesting to me to hear about someone who died with say 5 million, but no one knew he had it than to hear about someone who died and had a billion. I don't know why. Maybe it's because I never related to a billion. It's just not going to happen. After I die, I don't really care.
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Re: Billionaire Boglehead!!!

Post by VictoriaF » Mon Dec 23, 2013 8:01 pm

Abe wrote:It's more interesting to me to hear about someone who died with say 5 million, but no one knew he had it than to hear about someone who died and had a billion. I don't know why. Maybe it's because I never related to a billion. It's just not going to happen. After I die, I don't really care.
People who have billions don't die.

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Re: [Are there any] Billionaire Boglehead!!!

Post by LadyGeek » Mon Dec 23, 2013 8:25 pm

FYI - I moved one attempted thread hijack into a new thread (by request): [Billionaire Boglehead!!! How to allocate your portfolio?]. Also, I retitled this thread.

Please try to stay focused on the investing aspects.
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Re: [Are there any] Billionaire Boglehead!!!

Post by The Wizard » Mon Dec 23, 2013 8:50 pm

LadyGeek wrote: ...Please try to stay focused on the investing aspects.
You can say that, but I still stand by my point: no one gets to billionaire status by investing in index funds.
You get there by building a new empire of some sort...
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.....

Post by pinecrest » Mon Dec 23, 2013 9:26 pm

.....
Last edited by pinecrest on Mon Feb 24, 2014 6:22 pm, edited 1 time in total.

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Re: [Are there any] Billionaire Boglehead!!!

Post by TheTimeLord » Mon Dec 23, 2013 10:05 pm

Canogapark66 wrote:Are there any Billionaire Bogleheads? ... Based on my calculations, a high earning income individual that is frugal and financially disciplined and sets up a three fund portfolio bolgehead style, they should eventually (1-2 generations) be able to create 1+ billion dollars of wealth for their family. I guess my question is:

1) Has anyone set out to do this? If not why? whats holding them back? lifestyle? goals? etc? Have the boglehead views just not been around that long?

2) Other than transferring wealth once passed and heirs blowing it, what other downfalls can there be with this plan?

3) Ideas, thoughts welcome!

Thanks!
There are under 1,500 Billionaires in the world according to Forbes.
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Re: Billionaire Boglehead!!!

Post by jackholloway » Mon Dec 23, 2013 10:25 pm

VictoriaF wrote:
Abe wrote:It's more interesting to me to hear about someone who died with say 5 million, but no one knew he had it than to hear about someone who died and had a billion. I don't know why. Maybe it's because I never related to a billion. It's just not going to happen. After I die, I don't really care.
People who have billions don't die.

Victoria
But they are beheaded and the brain frozen in liquid nitrogen.

(I wish I was joking...)

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Re: [Are there any] Billionaire Boglehead!!!

Post by joe8d » Mon Dec 23, 2013 10:36 pm

What is the point? Being worth a billion and living frugally doesn't sound like all that much fun.
Agree. It's bad enough just being a frugal Millionaire.
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Re: [Are there any] Billionaire Boglehead!!!

Post by abuss368 » Mon Dec 23, 2013 10:54 pm

I can't relate to a Billionaire!

Is Donald Trump a billionaire or millionaire?
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Re: [Are there any] Billionaire Boglehead!!!

Post by TheTimeLord » Mon Dec 23, 2013 11:01 pm

abuss368 wrote:I can't relate to a Billionaire!

Is Donald Trump a billionaire or millionaire?
http://www.forbes.com/profile/donald-trump/

According to Forbes he is worth $3.5 Billion.
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Re: [Are there any] Billionaire Boglehead!!!

Post by abuss368 » Mon Dec 23, 2013 11:11 pm

StarbuxInvestor wrote:
abuss368 wrote:I can't relate to a Billionaire!

Is Donald Trump a billionaire or millionaire?
http://www.forbes.com/profile/donald-trump/

According to Forbes he is worth $3.5 Billion.
I thoughts it was $6 Billion and over one half of that is the intangible asset related to his brand and name?
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Re: Billionaire Boglehead!!!

Post by island » Mon Dec 23, 2013 11:18 pm

bucksfan2 wrote:
Canogapark66 wrote:Are there any Billionaire Bogleheads? ... Based on my calculations, a high earning income individual that is frugal and financially disciplined and sets up a three fund portfolio bolgehead style, they should eventually (1-2 generations) be able to create 1+ billion dollars of wealth for their family. I guess my question is:

1) Has anyone set out to do this? If not why? whats holding them back? lifestyle? goals? etc? Have the boglehead views just not been around that long?

2) Other than transferring wealth once passed and heirs blowing it, what other downfalls can there be with this plan?

3) Ideas, thoughts welcome!

Thanks!
What is the point? Being worth a billion and living frugally doesn't sound like all that much fun. I would much rather build a nice nest egg for myself and family and enjoy life. Lord knows no one makes it out of this life alive, why not enjoy yourself?
+1

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czeckers
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Re: [Are there any] Billionaire Boglehead!!!

Post by czeckers » Tue Dec 24, 2013 7:30 am

I think this theoretically could work if each generation has only one child. Otherwise, the dilution factor of dividing the wealth by more and more family members with each successive generation could have an insurmountable impact.

Let's say on average each family member has two children at age of 25, that means the portfolio value will have to double in real terms every 25 years just to stay even. If you want it to grow, you'll need at least two doublings every 25 years. That's about 6% real return annually (guesstimate doing math in my head). That's theoretically doable if no taxes and no one actually wants to spend any of the money. Once you take these last two factors into account, you could see why it is difficult for an inheritance to grow from generation to generation. Given inheritance taxes and the fact that in a taxable portfolio dividends would be taxed at regular income rates, the tax piece alone could break the plan even if all heirs become frugal bogleheads.

I don't know of any billionaire heirs to the Rockefeller, Morgan, or Carnegie fortunes... And they started with a much much larger portfolio than you or I.

-K
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VictoriaF
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Re: [Are there any] Billionaire Boglehead!!!

Post by VictoriaF » Tue Dec 24, 2013 8:26 am

abuss368 wrote:Is Donald Trump a billionaire or millionaire?
He is both. He has millions and billions.

Victoria
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Norris
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Re: Billionaire Boglehead!!!

Post by Norris » Tue Dec 24, 2013 10:55 am

He's not even close to being a billionaire. I think he's openly said his wealth is in the low eight figures. He gives half of his income to charity, so he's definitely not aiming for billionaire status.
What a beautiful human being is Jack! Bogleheads and many others have benefited from his wisdom and compassion.
Merry Christmas everyone!

Norris
Life is really simple, but we insist on making it complicated. Confucius

Canogapark66
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Re: [Are there any] Billionaire Boglehead!!!

Post by Canogapark66 » Tue Dec 24, 2013 4:39 pm

czeckers wrote:I think this theoretically could work if each generation has only one child. Otherwise, the dilution factor of dividing the wealth by more and more family members with each successive generation could have an insurmountable impact.

Let's say on average each family member has two children at age of 25, that means the portfolio value will have to double in real terms every 25 years just to stay even. If you want it to grow, you'll need at least two doublings every 25 years. That's about 6% real return annually (guesstimate doing math in my head). That's theoretically doable if no taxes and no one actually wants to spend any of the money. Once you take these last two factors into account, you could see why it is difficult for an inheritance to grow from generation to generation. Given inheritance taxes and the fact that in a taxable portfolio dividends would be taxed at regular income rates, the tax piece alone could break the plan even if all heirs become frugal bogleheads.

I don't know of any billionaire heirs to the Rockefeller, Morgan, or Carnegie fortunes... And they started with a much much larger portfolio than you or I.

-K

Yes, it seems the tax part of it will make it very difficult... As lets say portfolio reaches $100 Million and Dividends are 4%, that's 4 Million Taxable Income that year, most likely a portion of those dividends or portfolio would have to be sold off yearly and used to pay taxes... Unless of course once the portfolio reached a certain level where tax implications started require selling of portfolio the family then moved to Monaco or another tax haven which would help cancel out selling of portfolio.

Thoughts?

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arcticpineapplecorp.
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Re: [Are there any] Billionaire Boglehead!!!

Post by arcticpineapplecorp. » Tue Dec 24, 2013 6:26 pm

Didn't you hear...it's not cool to be a billionaire (according to Sean Parker):

http://www.huffingtonpost.com/2011/03/0 ... 32409.html
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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Re: [Are there any] Billionaire Boglehead!!!

Post by letsgobobby » Tue Dec 24, 2013 7:28 pm

The Wizard wrote:
LadyGeek wrote: ...Please try to stay focused on the investing aspects.
You can say that, but I still stand by my point: no one gets to billionaire status by investing in index funds.
You get there by building a new empire of some sort...
Let's run some real numbers.

Save $100,000 annually for 50 years (say, age 20-70). With a 10% nominal return you end up with $116,000,000 nominal.

Now draw down 1% per year, and live for 30 years. Stay invested in a 100% equity portfolio.

According to firecalc, several scenarios would have grown as high as $1,980,000,000 at the end of the period, with perhaps a dozen over $1,000,000,000.

Of course it's nominal, but at that point - who's counting?

So I'd say it is in fact possible to become a billionaire investing only in index funds. Not for everyone.

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