I am sure in the past couple weeks you have read some sort of headline revolving around “Kylie Jenner Not Actually Being A Billionaire” or maybe in the past you’ve heard that Donald Trump and Wilbur Ross have inflated their net worth among many others. While some may be upset that these people aren’t being transparent (even though it is unheard of to ask the “normal” person for their net worth), I want to look into this further and understand why a lot of rich people exaggerate their net worth.
Benefits of Faking A Higher Net Worth
There are some obvious benefits to being wealthy. Even just wealthy enough to not have to trade time for money (A.K.A. not working a 9-5 job). But for those who fall under the uber-rich category, they have more benefits than we can even think of. They are in exclusive circles, made up of other elites that know the tricks to make the most amount of money and even avoid mega tax bills. So with that in mind, what is the point of lying about being even more wealthy than you already are?
Well, the biggest reason is the publicity. Think about it. Publicity, or people knowing and talking about how wealthy you are benefits you in so many ways. Let’s dive into this a tad more.
When people are talking about you more, people want to know more about you. They become very interested in all of your happenings and whereabouts. This gives you the perfect opportunity to leverage your fame. Maybe you write a book and release it when you’re at the height of your publicity, more people would buy it since they want to know more about you.
Maybe you launch a lip kit (Kylie Jenner style) or some sort of online course to show people how you made money in real estate/stocks/etc. for you to make even more money from.
Also, when people hear about how wealthy you are, you are more likely to be included on the “Wealthiest People In The World” lists. These lists are scoured by people looking for investors each day. You will be brought onto so many more potentially lucrative deals and even asked to be part of elite clubs that are unknown to those who are under a certain net worth.
Lastly, the benefit of higher net worth is the status that comes with it. Our world, specifically in the U.S., idolizes those who have a high net worth. They become celebrities. Look at Elon Musk or Jeff Bezos. People follow them for what they are doing of course, but how often do you see magazines writing about them or gossip sites? All the time!! It is because people want to know what it would actually be like to have that much money.
Hence why ‘Keeping Up With The Kardashians’ has been on TV for more seasons than most TV shows last for. People want to see the inside of these people’s lives. They want to see what it really would be like to have that much money. If it changes you if you are still a good person. They envision themselves in your shoes and you (the uber-wealthy) can profit off of this opportunity almost limitlessly, especially with the frenzy of social media currently.
Anyways, I am sure you would agree that those who do have a known level of wealth, also come with a lot of followers. These followers are pretty loyal and will totally buy almost anything that persons put out as a product. This is why making it known that you are extremely wealthy, can really help you become even richer.
Some Examples Of People Who Fibbed About Their Net Worth
Wilbur Ross
Ross is a former US Commerce Secretary. It was found out pretty recently that he inflated his net worth by Forbes. Apparently, he was claiming that his net worth to be $2.9 billion and was on the Forbes 400 Billionaires List for 13 years strong until this the fall of 2019, Forbes uncovered that he is actually not even a billionaire.
Both Forbes and Bloomberg estimated his net worth to be $2.9 billion however after some federal filings had to be submitted for him to become US Commerce Secretary, they uncovered that he only declared $700 million in assets. When questioned, he told Forbes that $2 billion was actually transferred to a family trust where it didn’t have to be reported but Forbes did some digging and found out that the $2 billion never really existed. Later that year the Commerce Department confirmed this to be true, he was never actually a billionaire.
According to Forbes, Trump jumped through some hoops just to try to prove to them how wealthy he was so he could have a higher spot on their list of wealthy folk. He would call them using fake names stating that he had a greater share in what he owned for properties than what was known and that his properties were valued far higher than what their actual market price was.
Donald apparently would try to take the writers out to lunch and tell them astronomical figures for his wealth level. These writers would know that he was inflating it to a point but with their job, they can only really confirm any dollar amount of wealth for things owned publicly. Plus a lot of assets are quite difficult to estimate market values for, so while some of what Trump was saying could have been true, it is hard to confirm any of his numbers according to Forbes.
Apparently, Trump kept going to Forbes to tell them that he owned more than what his father did so he could be much higher on the list of Forbes Richest People.
The youngest child of Kris Jenner, the momager we know and love, was the cover for Forbes Youngest Billionaires before she was even 21 years old. She claimed the title of youngest self-made billionaire, making her first on the list, ahead of Zuckerberg who held the spot for years prior to Jenner.
However, after selling 51% of her Kylie Cosmetics ownership to publicly traded Coty, reporters were able to dig a little further into the deal to see how Kylie Cosmetics was actually doing. If you ask Kris or Kylie, they would say that the company was valued at more than $1 billion however what the reporters uncovered was that the company had declining sales for over two years and that the business was significantly smaller than what they were leading the public to believe.
They even hired CPA’s to draft up financial statements of Kylie and the company to be shown to the public to help convince. These, however, could not be confirmed as accurate. Forbes wouldn’t take listen to just what Kris was saying and put Kylie on the billionaire’s list for no reason, they needed proof. This is when Kris took her story elsewhere and it started to become the hottest trending topic in the nation. Making everyone believe Kylie Jenner was indeed a billionaire.
After this happened, Forbes didn’t have too much of a choice and tried to talk with the Jenner/Kardashian clan again to get some more accurate numbers. This is when they were able to provide some information on the sale with Coty before it happened, making Forbes believe that she was a billionaire. Unfortunately for Kylie, since the company she sold to is public, we were able to find the truth.
While the young mogul is definitely wealthy, her estimated net worth is around $600 million, not quite a billionaire yet but I am sure she will become one in the near future at the pace she is going.
While I do understand that the public can feel deceived when these folks who seem to have unthinkable amounts of money keep lying about their net worth, I kind of get where these uber-wealthy people are coming from. They are really trying to be business savvy when you think about it. The higher they can get you to believe they are worth, the more you are interested in them and more likely to buy their products, therefore, making them closer to the net worth they lied about, to begin with.
While lying isn’t OK, I also think that the general public has an obsession with knowing how much money these rich influencers and stars have. It is enticing, don’t get me wrong. But they are also people too and they are just trying to make insane amounts of generational wealth to set up for their family. After all, isn’t that what you’re trying to do to? I can say that I am definitely trying to set up as much generational wealth as I can. I don’t want to have to work a desk job my whole life and I don’t want the future generations that come after me to have to either, hence why I am making the necessary sacrifices to do that.
While it is easy to call them greedy or get mad at their deceptiveness, I think if you put yourself in these celebrities’ shoes it is pretty understandable. They are just trying to make the most amount of money while they have this spotlight.
What are you thoughts on folks lying about their net worth? Would you do it if you were in their shoes?
Gina DiMasi is an organizational finance whiz. Gina is an avid investor, educator and aficionado of bitcoin and other modern investments. In addition to being an all around nice person, Gina has a degree in personal finance studies from Framingham State University. When she's not running numbers or blogging up a storm, Gina actively volunteers with Habitat for Humanity.
MANAGE YOUR MONEY TOGETHER
Here are some simple guidelines for DINKS to build wealth:
1) Collaborate: Meet regularly to talk about money, set goals together, track and monitor them.
2) Understand and respect your partner. Take time to understand your partners values about money.
3) Watch the numbers. Get a budget, monitor your spending and track your net worth.
4) Max your retirement. Maximize contributions to your tax deferred retirement accounts.
5) Invest in stock. Stocks perform better than bonds or cash.
6) Avoid high interest debt. Credit cards and title loans are financial cancer.
7) Diversify. Don't put all your eggs in one basket.
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