How does paper wealth differ from real spendable money during a bubble?
Replied byRay Dalio
Founder at Bridgewater Associates
Niche: Finance
Revenue: Not Publicly Disclosed/month
Location: Westport, Connecticut, United States
Started: 1975
Wealth is not the same as money. You cannot spend paper wealth; you must sell your assets to get cash to buy goods. When everyone tries to sell their assets simultaneously to raise cash, the price plummets, revealing that the paper wealth was temporary.
0
From the Full Interview
This answer is part of a full interview with Ray Dalio, Founder at Bridgewater Associates.
Share this Answer
Found this insight valuable? Share it with your network to help others learn from Ray Dalio's experience.
Cite This Answer
Use this answer in your research, article, or academic work
Related Answers
How does the Trump Savings Plan address the wealth divide in the United States?
By Bill Ackman
Finance
Not Publicly Disclosed/mo
Why did you borrow three hundred million dollars from JP Morgan during your firm's crisis?
By Bill Ackman
Finance
Not Publicly Disclosed/mo
How does directly underwriting policies allow you to save money for customers?
By Emily Yuan
Finance
Approx. $3.3 Million/mo
How does the speculation phase of a bubble impact the real economy?
By Ray Dalio
Finance
Not Publicly Disclosed/mo
Did JPMorgan Chase face a real threat of bankruptcy during the 2008 financial crisis?
By Jamie Dimon
Finance
Approx. $15 Billion/mo
What does the term formidability mean to you when evaluating early-stage founders?
By Paul Graham
Finance
Not Publicly Disclosed/mo
What structural advantages does an accelerator batch environment provide to founders?
By Paul Graham
Finance
Not Publicly Disclosed/mo