Money
This 1-Minute Animation Puts $110 Billion of Wealth in Perspective
Just over a week ago, Bill Gates reclaimed the familiar title of the world’s richest person after seeing his net worth jump to the $110 billion mark.
The recent gains can be attributed to a surge in Microsoft’s stock price, after the tech company surprised the market by winning a $10 billion cloud contract from the Pentagon. This also pushed Gates past fellow Seattle billionaire Jeff Bezos, who currently holds a $108.7 billion fortune.
With these numbers topping a hundred billion dollars, they can be difficult to comprehend. Luckily for us, Twitter user @betty__cam put together a short animation that simplifies things.
$110 Billion, Visualized
The following one minute animation starts with the median household wealth in the United States of $61,937, working its way up to the Bill Gates fortune of $110 billion:
Along the way, the animation points out comparable dollar amounts to put things in perspective.
This includes the amount that people should save for retirement ($1.33 million), Katy Perry’s mansion in Beverly Hills ($19 million), settlements paid by the NYPD in a year ($230 million), and even the wealth of Elon Musk ($27.1 billion).
Millions vs. Billions
Part of the impact of the animation comes as it flips from millions to billions of dollars.
For example, the retirement figure of $1.33 million is clearly a solid chunk of money — but when that turns into a tiny speck in contrast to $1 billion, it’s evident that we’re talking about very different scales.
This is also illustrated when we look at seconds:
- 1 million seconds = 11.5 days
- 1 billion seconds = 31.71 years
- 110 billion seconds = 3,488.1 years
Go back a million seconds in time, and we’re talking about last week — go back Bill Gates’ wealth in seconds, and you’ll be hanging out with the Ancient Babylonians.
The Equities Effect
The short animation helps put this immense amount of wealth in perspective, but it also has raises a fair question: why is Bill Gates’ net worth growing if he signed The Giving Pledge, a commitment to give away at least half of his net worth to philanthropic causes?
The disconnect lies in the fact that fluctuations in Gates’ net worth are largely connected to the movement of Microsoft’s stock price, as well as the stock market in general.
Even though he’s no longer an active officer of the tech giant, Gates still owns close to 1% of outstanding shares — and with Satya Nadella at the helm, Microsoft’s market capitalization has soared to a record-setting $1.15 trillion. Gates also has over 60% of his assets invested in the stock market, which sits at all-time highs as well.
For the above reasons, Bill Gates gave away $35 billion in wealth in 2019, but still ended up gaining $16 billion in overall net worth.
Technology
Bitcoin is Near All-Time Highs and the Mainstream Doesn’t Care…Yet
As bitcoin charges towards all-time highs, search interest is relatively low. How much attention has bitcoin’s recent rally gotten?
Bitcoin Near All-Time Highs vs. Search Interest
Just about every financial asset saw a huge drop in March, but few have had the spectacular recovery that bitcoin has had since then.
Up more than 300% from the March lows, bitcoin is within $1,000 of its all-time high ($19,891) established three years ago. While 2017’s run-up saw a huge surge in Google searches, interest this time around is less than a quarter of what it was back then.
This graphic overlays bitcoin’s price changes against Google search interest for “bitcoin” between 2017-Nov 2020, showing the muted relative search interest for its recent rally. Despite Google search interest being low, it is turning upwards, potentially hinting at a rise to cap off 2020.
Nobody’s Searching? Maybe Bitcoin is Already Mainstream
Bitcoin’s mainstream attention in 2017 was exceptional, and was likely the first time many people had even heard about the digital asset.
After doing all of their Google research back then, it’s possible that the general population is now well aware of the cryptocurrency and doesn’t need to search up the basics again. Add to this that bitcoin is now easily purchasable through popular services like Robinhood and Paypal, and you have fewer people who need Google to figure out the intricacies of bitcoin wallets and transactions.
While people might not be searching for information on bitcoin, the media has certainly picked up on its movement over the past year. Mainstream coverage regarding the cryptocurrency is currently at a relative all-time high for the past 12 months.
Even if current mainstream coverage isn’t far from previous peaks, it’s still likely that people are seeing an increase in bitcoin content in their news feeds following the recent surge.
This rally is also attracting increased talk on social media sites like Twitter. That said, while there has been a rise in the volume of bitcoin-related tweets in November 2020, numbers are still quite low compared to the amount of tweets in 2017.
Daily tweet volume reached above 60,000 recently, but is still far from the +100,000 daily tweets that were being sent at the top of 2017’s bull run.
Where in the World is Google Search Interest for Bitcoin?
Even if worldwide search interest isn’t as high as it was in 2017, there is one country where bitcoin is being googled more now: Nigeria.
Since 2015, the Nigerian Naira has lost more than 50% of its value against the U.S. dollar. This, coupled with the country’s high share of unbanked citizens means that alternative currencies and payment methods have steadily risen in popularity and utility.
FinTech startups like Chipper Cash are providing Nigeria and other African nations with no-fee P2P payment services, along with the ability to trade bitcoin. The service is also beta testing the buying and selling of fractional shares of popular U.S. stocks.
Started up in 2018, Chipper Cash’s monthly payment values are now over $100 million, and the company has attracted investment from top VC funds like Bezos Expeditions as they provide a valuable service in an emerging market.
If Bitcoin is Mainstream, Where Does It Go From Here?
While bitcoin is proving itself to be a useful medium of exchange around the world, it’s still primarily a speculative asset. As 2020 saw massive increases in money supply across the board, bitcoin reacted best compared to other speculative assets, with its ascent to $19,000 almost completely uninterrupted since the $10,000 price area.
Time will tell if 2017 is set to repeat itself, or if bitcoin is getting ready to set new all-time highs going into 2021.
Investor Education
Ranking Asset Classes by Historical Returns (1985-2020)
What are the best-performing investments in 2020, and how do previous years compare? This graphic shows historical returns by asset class.
Historical Returns by Asset Class (1985-2020)
Mirror, mirror, on the wall, is there one asset class to rule them all?
From stocks to bonds to alternatives, investors can choose from a wide variety of investment types. The choices can be overwhelming—leaving people to wonder if there’s one investment that consistently outperforms, or if there’s a predictable pattern of performance.
This graphic, which is inspired by and uses data from The Measure of a Plan, shows historical returns by asset class for the last 36 years.
Asset Class Returns by Year
This analysis includes assets of various types, geographies, and risk levels. It uses real total returns, meaning that they account for inflation and the reinvestment of dividends.
Here’s how the data breaks down, this time organized by asset class rather than year:
| U.S. Large Cap Stocks | U.S. Small Cap Stocks | Int'l Dev Stocks | Emerging Stocks | All U.S. Bonds | High-Yield U.S. Bonds | Int'l Bonds | Cash (T-Bill) | REIT | Gold | |
|---|---|---|---|---|---|---|---|---|---|---|
| Ticker | VFIAX | VSMAX | VTMGX | VEMAX | VBTLX | VWEAX | VTABX | VUSXX | VGSLX | IAU |
| 2020* | 1.5% | -5.5% | -10.3% | -0.7% | 4.9% | -0.5% | 2.6% | -0.7% | -16.4% | 21.9% |
| 2019 | 28.5% | 24.5% | 19.3% | 17.6% | 6.3% | 13.3% | 5.5% | -0.1% | 26.1% | 15.9% |
| 2018 | -6.2% | -11.0% | -16.1% | -16.2% | -1.9% | -4.7% | 1.0% | -0.1% | -7.7% | -3.2% |
| 2017 | 19.3% | 13.8% | 23.8% | 28.7% | 1.4% | 4.9% | 0.3% | -1.3% | 2.8% | 9.3% |
| 2016 | 9.7% | 15.9% | 0.4% | 9.5% | 0.5% | 9.0% | 2.5% | -1.8% | 6.3% | 6.6% |
| 2015 | 0.6% | -4.3% | -0.9% | -16.0% | -0.3% | -2.0% | 0.3% | -0.7% | 1.6% | -12.3% |
| 2014 | 12.8% | 6.7% | -6.4% | -0.2% | 5.1% | 3.9% | 8.0% | -0.7% | 29.3% | -1.2% |
| 2013 | 30.4% | 35.8% | 20.3% | -6.4% | -3.6% | 3.1% | -0.4% | -1.5% | 0.9% | -29.0% |
| 2012 | 14.0% | 16.2% | 16.5% | 16.8% | 2.4% | 12.5% | 4.5% | -1.7% | 15.7% | 6.5% |
| 2011 | -0.9% | -5.5% | -15.0% | -21.0% | 4.6% | 4.2% | 0.8% | -2.9% | 5.5% | 5.5% |
| 2010 | 13.4% | 26.0% | 6.8% | 17.2% | 5.0% | 10.9% | 1.7% | -1.5% | 26.6% | 26.0% |
| 2009 | 23.3% | 32.7% | 24.9% | 71.5% | 3.2% | 35.6% | 1.6% | -2.4% | 26.3% | 20.2% |
| 2008 | -37.0% | -36.1% | -41.3% | -52.8% | 5.1% | -21.3% | 5.5% | 2.0% | -37.0% | 5.4% |
| 2007 | 1.3% | -2.7% | 6.8% | 33.6% | 2.8% | -1.8% | 0.1% | 0.7% | -19.7% | 25.8% |
| 2006 | 12.9% | 12.9% | 23.1% | 26.3% | 1.8% | 5.7% | 0.5% | 2.1% | 31.8% | 19.3% |
| 2005 | 1.4% | 3.9% | 9.8% | 27.7% | -0.9% | -0.5% | 1.8% | -0.5% | 8.3% | 13.0% |
| 2004 | 7.3% | 16.2% | 16.5% | 22.1% | 1.0% | 5.2% | 1.8% | -2.0% | 26.7% | 1.4% |
| 2003 | 26.2% | 43.1% | 36.1% | 54.7% | 2.1% | 15.1% | 0.4% | -0.9% | 33.3% | 19.2% |
| 2002 | -23.9% | -21.8% | -17.6% | -9.6% | 5.8% | -0.6% | 4.2% | -0.7% | 1.3% | 20.8% |
| 2001 | -13.3% | 1.6% | -23.1% | -4.4% | 6.8% | 1.3% | 4.6% | 2.6% | 10.7% | -0.4% |
| 2000 | -12.0% | -5.8% | -17.1% | -29.9% | 7.7% | -4.1% | 5.4% | 2.5% | 22.2% | -9.6% |
| 1999 | 17.9% | 19.9% | 23.6% | 57.3% | -3.4% | -0.2% | -0.6% | 2.0% | -6.5% | -1.7% |
| 1998 | 26.6% | -4.2% | 18.0% | -19.4% | 6.9% | 3.9% | 10.2% | 3.5% | -17.7% | -2.4% |
| 1997 | 31.0% | 22.5% | 0.0% | -18.2% | 7.6% | 10.0% | 8.9% | 3.5% | 16.8% | -23.2% |
| 1996 | 18.9% | 14.3% | 2.6% | 12.1% | 0.3% | 6.0% | 8.3% | 1.9% | 31.4% | -7.7% |
| 1995 | 34.0% | 25.6% | 8.4% | -1.9% | 15.3% | 16.2% | 14.3% | 3.1% | 10.0% | -1.7% |
| 1994 | -1.5% | -3.1% | 4.9% | -10.1% | -5.2% | -4.3% | -7.3% | 1.3% | 0.4% | -4.9% |
| 1993 | 7.0% | 15.5% | 28.9% | 69.4% | 6.7% | 15.1% | 10.7% | 0.2% | 16.3% | 13.9% |
| 1992 | 4.4% | 14.9% | -14.7% | 7.8% | 4.1% | 11.0% | 3.3% | 0.6% | 11.2% | -8.7% |
| 1991 | 26.3% | 40.9% | 8.7% | 54.5% | 11.8% | 25.2% | 7.5% | 2.5% | 31.5% | -12.5% |
| 1990 | -8.9% | -22.8% | -27.9% | -16.1% | 2.4% | -11.3% | -2.7% | 1.6% | -20.3% | -8.3% |
| 1989 | 25.5% | 11.0% | 5.6% | 56.9% | 8.6% | -2.6% | -0.6% | 3.7% | 3.9% | -6.8% |
| 1988 | 11.3% | 19.7% | 22.8% | 33.9% | 2.8% | 8.8% | 4.4% | 2.1% | 8.6% | -19.6% |
| 1987 | 0.3% | -12.7% | 19.3% | 9.3% | -2.8% | -1.7% | 4.5% | 1.3% | -7.8% | 19.0% |
| 1986 | 16.8% | 4.5% | 67.5% | 10.4% | 13.9% | 15.6% | 10.1% | 5.0% | 17.7% | 17.9% |
| 1985 | 26.4% | 26.2% | 50.3% | 22.9% | 17.6% | 17.5% | 7.0% | 3.8% | 14.6% | 1.7% |
*Data for 2020 is as of October 31
The top-performing asset class so far in 2020 is gold, with a return more than four times that of second-place U.S. bonds. On the other hand, real estate investment trusts (REITs) have been the worst-performing investments. Needless to say, economic shutdowns due to COVID-19 have had a devastating effect on commercial real estate.
Over time, the order is fairly random with asset classes moving up and down the ranks. For example, emerging market stocks plummeted to last place amid the global financial crisis in 2008, only to rise to the top the following year. International bonds were near the bottom of the barrel in 2017, but rose to the top during the 2018 market selloff.
There are also large swings in the returns investors can expect in any given year. While the best-performing asset class returned just 1% in 2018, it returned a whopping 71.5% in 2009.
Variation Within Asset Classes
Within individual asset classes, the range in returns can also be quite large. Here’s the minimum, maximum, and average returns for each asset class. We’ve also shown each investment’s standard deviation, which is a measure of volatility or risk.
Although emerging market stocks have seen the highest average return, they have also seen the highest standard deviation. On the flip side, T-bills have seen returns lower than inflation since 2009, but have come with the lowest risk.
Investors should factor in risk when they are looking at the return potential of an asset class.
Variety is the Spice of Portfolios
Upon reviewing the historical returns by asset class, there’s no particular investment that has consistently outperformed. Rankings have changed over time depending on a number of economic variables.
However, having a variety of asset classes can ensure you are best positioned to take advantage of tailwinds in any particular year. For instance, bonds have a low correlation with stocks and can cushion against losses during market downturns.
If your mirror could talk, it would tell you there’s no one asset class to rule them all—but a mix of asset classes may be your best chance at success.
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