"'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.
sitetest
Teresa's had several years now of tiny incomes on her investments. She must be building up one humongous capital gains tax bill! Does that make sense though as we're at the precipice of Socialism in America? Tax rates will be really going up, if her socialist husband has his way. It seems like risk management would lead her to realize some of her capital gains taxes now and be done with it.