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Friday, February 10, 2017

Can billionaires actually liquidate their entire net worth?


Can billionaires actually liquidate their entire net worth? by Pascal Lorig

Answer by Pascal Lorig:

Yes they can. The most famous billionaire that comes to mind is Pablo Escobar. He had nothing but cash. Though there are many stories and rumours about his wealth it is indeed true that it was all money.

But what about the top 100 guys on forbes wealthiest people in the world. Well, the top 10 most probably have a billion in cash or real estate. The problem stock share billionaires have is, they hold a large number of shares of one ( in most cases their own) company. For instance Google, Microsoft, Facebook etc.. What will happen to the stock price if all of a sudden 10 million shares get available for sale? The price drops massively, cause the offer is now x times higher than the demand. So your wealth will drop noticeably. Plus other shareholders will go nuts and also throw away their shares. Why would the CEO sell so many shares of his own company? Did he loose faith? There must be trouble going on. So in the end this could end badly. That is why CEOs are most likely bound to their shares.

So the easiest way to liquidate your fortune is by having it already in cash or real estate. And if it is in stock shares, you need to have a diverse portfolio.

Can billionaires actually liquidate their entire net worth?


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