Neither statement is true. Teresa no longer has much wealth in Heinz stock. The super wealthy can expect to see 10% or better return on their investments over the long term. It's to their advantage to take on higher risk investments because unlike small investors they can ride out any storm. They never get forced out of their investments at the low point, and have highly paid advisors to tell them when to sell at the high.
The rich tend to get richer. This has always been true. If you can break into the club, it gets easier to make money the longer you're there.
"'It's unlikely she's getting a total yield of 5%. I understand that a large portion of her wealth is in Heinz stock.'
"Neither statement is true."
I don't know how much Heinz stock she owns. I do know that there are a lot of companies paying dividends in the same range. 1% isn't an unusual dividend rate. There are also plenty of companies not paying dividends. I also know she reports a lot of income from tax-exempt bonds. Yields there are not in the 5% range.
"The super wealthy can expect to see 10% or better return on their investments over the long term."
Absolutely. So can the not-so-wealthy. I didn't say otherwise.
"Yield" isn't "return." "Yield" usually refers to income generated, through interest or dividends. "Return" refers to yield and any appreciation you get.
But capital appreciation isn't pertinent to the discussion, here. You don't pay tax on the capital appreciation of your investments until you sell them. That is the point of several posters here, that rich people prefer long-term capital appreciation to a high income yield.
If you have a billion dollars, you might well invest it in a way to produce only a (relatively) tiny stream of current, taxable income, but in a way to produce long-term capital gains that aren't taxed until you sell and realize the gain.
This is even more true if you're the beneficiary of trusts that just don't show up on your 1040 anyway.
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