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How the World’s Richest People Can Lose Billions in a Single Day

GOBankingRates Logo By Joel Anderson of GOBankingRates | Slide 1 of 11: The world’s richest man is Jeff Bezos, worth some $158 billion as of this writing, even after losing $38 billion in his divorce. But the phrase “as of this writing” is pretty crucial because his net worth fluctuates daily. That’s because Bezos is among a class of billionaires who have almost all of their net worth in shares of a single public company. Instead of a Scrooge McDuck-style vault of gold, about 95 percent of Bezos’ net worth is tied up in his nearly 80 million shares of Amazon — about 16 percent of the company. And given how volatile stock markets can be, Bezos is always just one bad trading day from having billions of dollars shaved off of his net worth.
For the average investor, this should serve as an important cautionary tale about the importance of a diverse portfolio: when you have all your eggs in one basket, you live and die with that basket. This is why any financial advisor worth their salt will tell you it’s so important to use mutual funds and/or ETFs to spread your investments out across hundreds — even thousands – of different stocks in addition to investing in bonds and other types of securities as well. Here’s a look at billionaires whose net worths have taken a massive tumble in a single day all because theirs was one of the company stocks that plummeted.

The world’s richest man is Jeff Bezos, worth some $158 billion as of this writing, even after losing $38 billion in his divorce. But the phrase “as of this writing” is pretty crucial because his net worth fluctuates daily. That’s because Bezos is among a class of billionaires who have almost all of their net worth in shares of a single public company. Instead of a Scrooge McDuck-style vault of gold, about 95 percent of Bezos’ net worth is tied up in his nearly 80 million shares of Amazon — about 16 percent of the company. And given how volatile stock markets can be, Bezos is always just one bad trading day from having billions of dollars shaved off of his net worth.

For the average investor, this should serve as an important cautionary tale about the importance of a diverse portfolio: when you have all your eggs in one basket, you live and die with that basket. This is why any financial advisor worth their salt will tell you it’s so important to use mutual funds and/or ETFs to spread your investments out across hundreds — even thousands – of different stocks in addition to investing in bonds and other types of securities as well. Here’s a look at billionaires whose net worths have taken a massive tumble in a single day all because theirs was one of the company stocks that plummeted.

© Seth Wenig/AP/REX/Shutterstock

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