How to instantly become a millionaire
This is definitely a click-bait title. No one can instantly become a millionaire. It takes time and effort and IQ and luck to earn that much money. That’s what we are told at least. But there is a simpler way, and it starts with a friend, one hair, and a 10 francs bill.
For this to work properly, you need a friend who would like to become a millionaire as well. That shouldn’t be too hard to find…
Your friends also needs a 10 francs bill. Don’t worry, he is going to get it back.
Here is what you are going to do:
- Meet with your future millionaire friend.
- Pluck one hair from your head.
- Sell your friend this one hair for 10 francs.
- Have your friend do steps 2 and 3 (that’s how he gets his bill back)
- Bam, just like that, you’re both part of millionaire’s club
Let me explain: by selling your friend one of your hair for 10 francs, you’ve established its market value. Since you most likely have around 100,000 hair on your head, by extrapolating, you are now in possession of 1 million francs (10 francs / hair x 100,000 hair).
You’re probably telling yourself right now: « I knew this was going to be a stupid article », and you’re right, it is kinda silly. But it’s not sillier than the way the wealth of other millionaires and billionaires is calculated.
See, when you hear in the news that Jeff Bezos is now worth $214 billion (even though he’s bald), it’s exactly the same kind of math. Jeff Bezos doesn’t have $214 billion on his bank account. Jeff Bezos owns shares of Amazon and a bunch of them, 51.7 million to be exact. So when one share of Amazon sold for $3,719, by extrapolation, Jeff Bezos is a part of $100+ billion club. (For the nerds who will say that 51.7 million times 3,719 isn’t equal to 214 billion, that’s because Jeff Bezos owns other things than just Amazon shares.)
Every time you hear that companies have lost 100 billion, it’s not like a huge pile of cash was set on fire. The company hardly lost anything. Because the 100 billion weren’t there in the first place.
Market capitalisation is just a mathematical construct. But it’s the least terrible way we have to put a value on companies.
Saying that Jeff Bezos has 214 billion is assuming that he is able to sell all his shares at the latest quoted price. That’s unlikely, because such a sell pressure would bring the price down considerably (the more there is of something, the cheaper it gets). That’s not to say that Jeff Bezos, or any other billionaire for that matter, isn’t wealthy. But the numbers are misleading.
I guess the title of this article should have been « The abstraction of market capitalisation », but who would have read that?