****NEWSFLASH: BILLIONAIRES DON'T HAVE THE CASH YOU THINK THEY DO....... ****

Billionaires can be "broke," too. Yes, you read it right.

One of the biggest misconceptions about money is that a person worth X has X to blow.

But that's not the case. AT ALL.

I'll explain...

Let's take the world's richest man, Jeff Bezos, for instance.

Compared to his multi-billion dollar fortune, he only makes $80K a year—and has for the past 20 years.

A cool salary, yes, but nothing crazy. (Also drives a $17K Honda.)

However, his $145B net worth sits in STOCK.

Jeff Bezos is likely the most liquid billionaire alive.

Could he liquidate that stock and sit on a 100 billies in cash?

Yes—in theory. But it would come at a CRAZY cost. Taxes. He'd lose ownership in Amazon. Etc.

So in spite of what people think, he doesn't actually have $145B to just go out there and blow.

And he's probably the most liquid billionaire alive.

For other more conventional fortunes—let's face it, Amazon is a once-in-a-lifetime company—the liquidity becomes scarce.

Let's take a look at someone like pre-president Donald Trump. Or pick any real estate titan.

Let's say you're worth $5B, own some high rises, etc. Real estate is HIGHLY illiquid AND subject to leverage.

Meaning of that $5B fortune, 90% is probably locked up in those buildings.

The average liquidity for a billionaire is 18% of net worth.

Sounds reasonable but I call bullshit—unless liquidity includes securities (stocks/bonds).

In real life, I'd venture to say 2.5-5%. Which means a billionaire may have $25M in cash.

WHICH IS A LOT OF F*****G CASH!

And there's a reason for this. On a micro-micro level, think of it this way.

If you get your allowance from your parents, what happens then? You spend that ish.

But if your money gets locked in a college fund, what happens when you turn 18?

Exactly.

And again, net worth is just a projection, an estimate.

Like Mark Cuban says, with non-liquid assets, your net worth can be whatever you want it to be.

Let's look at Kylie Jenner. She sold her company, runs away with $340M.

LOT OF MONEY. Not quite billions.

HOWEVER...

If she wanted to, she can leverage that obscene amount of cash into $3.4B overnight.

Do the math. 10% down payment on three high rises, 90% financed.

Boom.

She'd be giving up the liquidity, sure. But she'd control billions of dollars, once again.

The cycle of life.....and the cycle of money.

But just remember, just like love, money's a lot more nuanced and multi-faceted than just a $ sign.

I'm out.