Elon Musk is the world's first trillionaire. How scared should you be?
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What does it mean to be a trillionaire?
Okay, welcome back to Gary's Economics. Today we are going to explain everything you need to know about the world's first trillionaire. Okay, so this week, the world got its first trillionaire. It is Elon Musk. Congratulations to Elon Musk. We're going to explain to you everything that means today. The first thing is what is a trillionaire? What is a trillion? We've had this long running problem in explaining inequality with the fact that like a billion dollars is like so much money that it's like impossible to conceptualize. And people don't understand the difference between a million, which is like quite a lot of money, but like amount that Nowadays a lot of ordinary people will accumulate especially in countries like the UK the US and a billion which is like Oh my god, like it's insane so much money I think the best the best example we've had to explain the difference between a million and a billion up till now is a million minutes
is just under two years and a billion minutes is just under 2000 years. So a million minutes ago was a couple of years ago. A billion minutes ago was like Roman Empire. The problem you have is if you try to extend that to a trillion, then you say like a trillion minutes is just under two million years. And then once again, you're back with the problem of this number is so big that the human brain can't comprehend it. So we probably have to go down to seconds. A million seconds is a week and a half. A billion seconds is 32 years, and a trillion seconds is 32,000 years. Basically, a trillion is just an unbelievably stupidly enormous number, and it's really hard to just understand how big it is.
What assets does Elon Musk own that contribute to his wealth?
I think one of the best ways to understand the wealth of the super rich is to look at the passive income that they receive from the ownership of that wealth. So we often use the statistic that if you look at somebody who's worth a billion dollars or a billion pounds at a rate of 5%, they will make something like a million dollars or a million pounds a week. If we extend that to a trillion, then we see if somebody's worth a trillion dollars, then they will make every year $50 billion. They'll make a billion dollars a week. I think probably the one that's maybe easiest to understand is that a trillionaire making passive income at a rate of 5% will make $137 million every day, $5.7 million every hour.
It's about $100,000 a minute, $1,600 a second. So that is the passive income that Elon Musk will be making every single day, every single second. He'll be making about $1,600 every single minute. He'll be making about $100,000 passive income, not from his work, just from the assets that he owns without even getting out of bed. So that's the number, the number trillion itself. It's ungodly large. It's absolutely enormous. And the second thing is this thing people have been speaking about quite a lot this week, which is that one trillion dollars is assets that Elon Musk owns. It is not money in a bank. So some people have been saying, oh, well, it doesn't matter because it's not like money in a bank. The truth is, it's probably much more dangerous for somebody like Elon Musk to own real assets, which is like real physical infrastructure out there in the world.
things that you need, things that your government need, things that your country needs, rather than just money in a bank. In this specific case, Elon Musk is a trillionaire because he owns, well, he already owned Twitter and Tesla, but he also owns about half of SpaceX, which sends rockets into space. He owns a ton of satellites. That was floated on the stock market last week and basically traders think that this company is worth $2 trillion and Elon Musk owns about half of it.
Should the public be concerned about Elon Musk's wealth?
So just his ownership in SpaceX itself is worth nearly a trillion dollars. I'm not an expert on SpaceX and obviously there's going to be some speculation about whether SpaceX really is worth a trillion dollars. When somebody owns assets that are worth a trillion dollars, if somebody owns a company that's worth a trillion dollars, that is either because it is making an enormous amount of profit or traders think that in the future it will make an enormous amount of profit.
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Chapters
8 chapters
1
What does it mean to be a trillionaire?
0:00–1:46
2
What assets does Elon Musk own that contribute to his wealth?
1:46–3:51
3
Should the public be concerned about Elon Musk's wealth?
3:51–5:34
4
How could the rise of trillionaires affect future generations?
5:34–7:40
5
Is society facing a return to feudalism due to wealth concentration?
7:40–11:19
6
What historical parallels can be drawn with colonialism and the Industrial Revolution?
11:19–13:33
7
How does wealth inequality impact asset ownership across society?
13:33–15:41
8
What actions can individuals take to address wealth inequality?
15:41–46:05