Comment by sandworm101 | Hacker News Reader

Comment by sandworm101 | Hacker News Reader

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>>> available at $50 million in net worth is indistinguishable from $50k [+], but the price is 1000x higher.

I cannot disagree more. At 50m you have a totally different perspective in this day and age. Investment for profit is often not the primary concern. Wealth protection, transfer from one generation to another, access control, family members, lawsuits ... lots of things that are not relevant with 50k in the bank but become big deals with 50m. The investment advice sought and offered to those with 50m to protect is altogether a different product than that offered to those with 50k.

If you have 50m in the bank, "saving" for your kid's college expenses is a radically different question than if you only have 50k. Protection is far more a priority than any 'saving' concept.

And taxes! That tiny amount of interest on 50k won't be taxed at nearly the same rate as that from 50m. Therefore an expensive but "tax efficient" scheme based on expensive lawyer advice, not robots, is worth the money.

> And taxes! That tiny amount of interest on 50k won't be taxed at nearly the same rate as that from 50m.

Actually, it will probably be taxed at a lower rate. Interest on a savings account is taxed as ordinary income, while investment income on a $50m portfolio will likely be taxed at the 15% (or perhaps 20%) capital gains rate.

That's what the advice does, it makes sure your interest is gets investment treatment. Ideally, it isn't taxed. Ideally, the attorneys setup a structure whereby gains aren't treated as any sort of income until one decides to realize them.

> Ideally, the attorneys setup a structure whereby gains aren't treated as any sort of income until one decides to realize them.

There's no need to "structure" that. Buy stock and hold will do it.

What use is that? If you never sell them then you cannot spend the money. The goal is to get cash money into the client's pocket without them having to pay taxes.

I have < $50k of savings but most of my money is still in Betterment being taxed as capital gains. If you're using a savings account as an investment strategy the tax on your tiny interest payments is the least of your problems.

At $50M, the capital gains tax rate will currently be 25%, because even with tiny percentage gains you're going directly to the top CG tax bracket.

you quoted him one word too late. He said the quality was indistinguishable and you went on about the categorical differences between the two.

The only difference is the 50m makes profit with little or no risk. And the consequence of this is consistent inflation, lowering of the purchasing power of dollar, quanitative easing and military keynesianism, along with other things.

One example is if you had $10m in real estate, infinitebank with loan you super low interest rate and then you invest it in a limited $200m fund which had some quasi-guaranteed rate. I can't remember the details but the risk was zero or low. Can't remember the fund name.

However, the advisor to the 50k person probably knows more than the advisor to the 50m person. The high networth advisor is even more of a salesman with no real knowledge.

But at the world's largest wealth management firms, 50m clients are not so encouraged. Wouldn't want to be a threat to the Managing Director or CEO.

good luck with that zero risk thing...

Tell that to them, not me.

I am just recounting what happened in a corner office with 2 Morgan executives who make about $1 million a year.

This is what they claim.

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