, Columnist
How the Top 1% Keeps Getting Richer
The wealthiest invest less in housing and more in stocks, generating higher returns.
Don't do it!
Photographer: Joe Raedle/Getty ImagesThis article is for subscribers only.
Why are people like Bill Gates, Jeff Bezos and Mark Zuckerberg so incredibly rich? Sure, they’re great businesspeople, and they had the right ideas at the right time. But most importantly, when their businesses succeeded, they owned a large portion of the equity.
Equity, or stock, is the riskiest type of asset ownership. It’s the most volatile, and it’s the first to get wiped out when a company goes bankrupt. But it also has unlimited upside -- the gains can, in theory, be infinite. It’s the entire upper tail. So of course the largest fortunes that we see -- the richest individuals -- were made through equity ownership.