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Started By
Message
How much wealth until you can hide FU money?
Posted on 12/6/18 at 9:54 am
Posted on 12/6/18 at 9:54 am
Buddy and I got in a convo about Elizabeth Holmes the founder of Theranos that had a net worth of $9 Bil before fraud and civil penalties made it “$0”. I mean no way she doesn’t have money somewhere right? Filtering off $10 or $20 mil from $9 bil is not that hard.
At some point, everyone would hide some money right? Offshore, Switzerland, etc. I have no idea, I’m sure there’s places for those with $100mil plus most of us wouldn’t even think about.
At what point is someone able to hide away enough that if the shite hits the fan you disappear and have money put away you can survive care free for life? It wouldn’t take much, $5 to $10 mil right? Buy a nice house $500k through multiple foreign Corporations and live off of 2% bank interest of $9 mil. That’s $180,000. I could hustle up a great life fairly easily on that somewhere like Thailand.
Are people doing this at $100 mil net worths? $500mil? Every wealthy person I know has a ‘oh shite’ plan to some degree. They don’t want to go back to real work again.
At some point, everyone would hide some money right? Offshore, Switzerland, etc. I have no idea, I’m sure there’s places for those with $100mil plus most of us wouldn’t even think about.
At what point is someone able to hide away enough that if the shite hits the fan you disappear and have money put away you can survive care free for life? It wouldn’t take much, $5 to $10 mil right? Buy a nice house $500k through multiple foreign Corporations and live off of 2% bank interest of $9 mil. That’s $180,000. I could hustle up a great life fairly easily on that somewhere like Thailand.
Are people doing this at $100 mil net worths? $500mil? Every wealthy person I know has a ‘oh shite’ plan to some degree. They don’t want to go back to real work again.
5
Posted on 12/6/18 at 10:03 am to baldona
quote:
Buddy and I got in a convo about Elizabeth Holmes the founder of Theranos that had a net worth of $9 Bil before fraud and civil penalties made it “$0”. I mean no way she doesn’t have money somewhere right? Filtering off $10 or $20 mil from $9 bil is not that hard.
At some point, everyone would hide some money right? Offshore, Switzerland, etc. I have no idea, I’m sure there’s places for those with $100mil plus most of us wouldn’t even think about.
At what point is someone able to hide away enough that if the shite hits the fan you disappear and have money put away you can survive care free for life? It wouldn’t take much, $5 to $10 mil right? Buy a nice house $500k through multiple foreign Corporations and live off of 2% bank interest of $9 mil. That’s $180,000. I could hustle up a great life fairly easily on that somewhere like Thailand.
Are people doing this at $100 mil net worths? $500mil? Every wealthy person I know has a ‘oh shite’ plan to some degree. They don’t want to go back to real work again.
She was "worth" $9 billion but the vast majority and maybe all was because of her ownership of Theranos. I think it is easy to squirrel away cash in most instances, however I'm not sure about this one.
Not sure how she could've taken cash off the table.
Posted on 12/6/18 at 10:09 am to baldona
Just depends on if they made distributions after capital raises or all of their equity was rolled.
And since theranos was a private company she wouldn’t have been able to easily sell shares to tuck away somewhere
And since theranos was a private company she wouldn’t have been able to easily sell shares to tuck away somewhere
Posted on 12/6/18 at 10:09 am to baldona
quote:
Are people doing this at $100 mil net worths?
Probably a bit less than that. I am not 100M wealthy.
The easy solution to this is to buy physical gold and store it in a location not in the US.
Posted on 12/6/18 at 10:18 am to whodatigahbait
Sure but still multiple billions, if you can’t filter off 0.5% (like 1/2 of 1%) come on. She also rose and fell quickly, not a lot of time. But someone worth say $100 mil for 30 years. Not that hard to work out a way to have hidden money.
Someone like Holmes knew it was only a matter of time. In that situation, how dumb are you to not prepare financially?
Someone like Holmes knew it was only a matter of time. In that situation, how dumb are you to not prepare financially?
Posted on 12/6/18 at 10:19 am to whodatigahbait
None of that $9B was liquid, other than the salary she was taking.
That's not how that works. All the $9B means is what the company was worth (based on the last private investment) and how many shares she has.
That's not how that works. All the $9B means is what the company was worth (based on the last private investment) and how many shares she has.
Posted on 12/6/18 at 10:19 am to brian_wilson
quote:
The easy solution to this is to buy physical gold and store it in a location not in the US.
Absolutely. Diamonds, Rare Art, etc. things that are easily moved and sold to people that don’t want it public.
Posted on 12/6/18 at 10:21 am to lilsnappa
quote:
None of that $9B was liquid, other than the salary she was taking.
None? Come on. If you have a $9 bil company you are filtering off some money. $10 mil is one bad real estate transaction for a research lab in Cambodia. That’s nothing.
Eta: We are talking about someone that basically falsified data and tests to even become that wealthy. I very much doubt everyone in her accounting dept. was pure also.
This post was edited on 12/6/18 at 10:23 am
Posted on 12/6/18 at 10:32 am to baldona
The problem with your plan is most of these people start out legit and then result to fraud to keep the company going. You then convince yourself what your doing isn't wrong. It wasn't a giant ruse, she didn't set out to funnel off X% of the highest value she could get her company to.
Posted on 12/6/18 at 11:24 am to baldona
quote:
None? Come on. If you have a $9 bil company you are filtering off some money. $10 mil is one bad real estate transaction for a research lab in Cambodia. That’s nothing.
Eta: We are talking about someone that basically falsified data and tests to even become that wealthy. I very much doubt everyone in her accounting dept. was pure also.
Not when the company is VC backed and has negative cash flow.
Posted on 12/6/18 at 1:30 pm to Mingo Was His NameO
quote:
The problem with your plan is most of these people start out legit and then result to fraud to keep the company going. You then convince yourself what your doing isn't wrong. It wasn't a giant ruse, she didn't set out to funnel off X% of the highest value she could get her company to.
Disagree. Sure some do, but plenty set out to make money first and foremost no matter what. My little understanding of Holmes’s as an instance is that the very basis of her testing was fraudulent from very early on. She rode that train hard. Sure, she could have had every intention of trying to figure it out. But she lied from early on for a reason.
Most of these ‘American greed’ guys are shady AF through and through. If it’s not one scheme it’s another.
That’s besides the point. Again, once you hit a certain point of wealth you don’t want to be poor again. You don’t risk absolutely everything unless you have to or you are dumb.
Posted on 12/6/18 at 2:37 pm to baldona
quote:
Buy a nice house $500k through multiple foreign Corporations and live off of 2% bank interest of $9 mil. That’s $180,000. I could hustle up a great life fairly easily on that somewhere like Thailand.
I wouldn’t call that FU money. If you have to move to Thailand to make it work, it’s not FU money.
Posted on 12/6/18 at 3:07 pm to baldona
quote:
Are people doing this at $100 mil net worths?
I’d say certainly by then, if not a bit sooner.
Though rather than FU amounts of money I’d wager it’s just enough to live comfortably—say upper-middle class. You or your heirs can rebuild from that position. It wouldn’t be easy, but it wouldn’t be nearly as stacked against you as being flat broke.
Posted on 12/6/18 at 8:50 pm to whodatigahbait
quote:
Not when the company is VC backed and has negative cash flow.
They would have had their own people auditing where every dollar went.
Posted on 12/7/18 at 7:22 am to EA6B
quote:
They would have had their own people auditing where every dollar went.
Yeah, no. This instance for example, you guys act like VC’s are perfect and miss nothing. Again $9 bil evaluation and I’m talking $10 mil. The VC’s missed the fact the entire business was a fraud, but they are going to be able to keep an eye on every cent?
As the owner/ CEO you guys are assuming we are talking about only pay/ stocks/ employee reimbursement which is very wrong. As CEO you can fairly easily divert something as measily as routine supplies, return them using a different bank account in your name, and profit. With one person with you in accounting and a billion dollar company, it’s fairly easy to divert small amounts of cash in supplies/ COGS that are assumed to be in storage or used.
Maybe Holmes is not a great example. My point is simply at what amount of wealth does someone take the measures to never be poor or have to ‘work’ again?
This post was edited on 12/7/18 at 7:24 am
Posted on 12/7/18 at 7:27 am to baldona
quote:
None? Come on. If you have a $9 bil company you are filtering off some money.
what money?
that $9B was based on stock evaluations. i don't think she was even vested and those stocks weren't transferrable at the time. Theranos was privately-held, not a publicly-traded company.
and he company itself wasn't generating tons of revenue and was not profitable when the fraud was found. what money is she filtering?
Posted on 12/7/18 at 7:29 am to baldona
quote:
Again $9 bil evaluation and I’m talking $10 mil.
how does she turn $10M of that stock equity into $10M of cash equity? does she get a loan or something? who is she going to sell to? even if she sells some insane markup (like $100M in stock for $10M in cash), the buyer is going to ask why the CEO is doing this AND the buyer would have to keep it silent (b/c if word got out that $9B would go to $0 quickly)
Posted on 12/7/18 at 7:43 am to baldona
quote:
If you have a $9 bil company you are filtering off some money. $10 mil is one bad real estate transaction for a research lab in Cambodia. That’s nothing.
Posted on 12/7/18 at 10:38 am to baldona
quote:
Maybe Holmes is not a great example. My point is simply at what amount of wealth does someone take the measures to never be poor or have to ‘work’ again?
Holmes is a terrible example, and you my friend are an idiot.
Posted on 12/7/18 at 10:38 am to EA6B
quote:
They would have had their own people auditing where every dollar went.
Exactly
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