As we’ve discussed before, there are a handful
of people walking around right now with a hyper-exclusive jet-black American Express
credit card in their wallets that they could theoretically use to buy anything currently
for sale, regardless of its cost. In fact, the current record we could find
charged on such a credit card is $170 million charged by Chinese billionaire, Liu Yiqian,
who no doubt is the world record holder for those sweet, sweet flight mileage points. But let’s imagine for a moment that a super-rich
person didn’t have such a card or for whatever reason wanted to buy something worth millions
of dollars not with a credit card, but cash. Could they? Well, surprisingly, in many countries no,
with some exceptions. So let’s now talk about how the uber-wealthy
actually go about paying for things worth millions upon millions of dollars. To begin with, for the most part, paying for
something worth a pile of Ferraris is the same as paying for any other item, with the
fancy auction houses and stores we researched all offering the same basic payment options
as stores for us peons. For example, Sotheby’s auction houses notes
that customers can pay for any items they purchase “by bank transfer, cheque or cash
(subject to any restrictions and legal limits)” while famed luxury superstore Harrods notes
that you can pay for any item they have for sale with PayPal if you really wanted to. As for how the immeasurably wealthy actually
end up paying for such items, most of the time they just put it on their card. What about transaction limits, you say? As you can probably imagine, the credit cards
used by millionaires and billionaires are different to the ones doled out to us mere
mortals and come with a host of additional benefits to ensure the holder doesn’t up
and take all of their money elsewhere. Although the existence of these cards isn’t
exactly a secret, banks that issue them don’t usually allow customers to apply for them,
instead in most cases invite particularly wealthy customers to use them. While the most famous of these cards is arguably
the Black American Express card alluded to at the start of this piece, there are a number
of similar credit cards out there that fulfill essentially the same function, in that they
allow the holder to buy any item they wish regardless of its value and provide a ridiculous
number of services that come for free with simply having the card at all, including what
almost amounts to something of a personal assistant in some sense, or at least someone
who can figure out how to make whatever you want to happen, happen. This might be something as simple as tracking
down tickets to a sold out show and acquiring them, to more outlandish requests. If your imagination isn’t all that great,
according to one executive at Amex asked about the more bizarre requests the company has
fulfilled on behalf of customers holding their Centurion card, he noted they had a card holder
once call up and ask for a handful of sand from the Dead Sea be delivered to their address
in London. The company handled it from there, sending
an international courier to the shores of the Dead Sea on a motorcycle. The courier then posted the sand to the customer. Apparently the sand was to be used in a school
project for the customer’s kid. In another case, the cardholder wanted to
appear on a soap opera, but wasn’t sure how to make this happen. The Amex representative managed to get the
woman an audition for a role in such a show. Yet another bizarre request was from someone
wanting Amex to find the horse ridden by Kevin Costner in Dances with Wolves. They were not only able to track this down
for the customer, free of charge for this sort of service, but were also able to arrange
for purchase of the animal and then had it transported to Europe where the customer lived. In any event, contrary to popular opinion,
these cards do often have a maximum limit, it’s just that this limit is informed by
the holder’s personal wealth and the relationship they have with their respective bank. So in the case of billionaires and the like,
since any theoretical limit put in place would exceed the value of almost any item available
for purchase on Earth, it’s easier to just say the card has no limit, even though the
bank would almost certainly query such an individual trying to charge a billion dollars
to their card unless they got pre-approval for the transaction. In the event a billionaire, for whatever reason,
decided that they instead wanted to pay for something worth millions of dollars out of
pocket rather than putting it on a credit card, they could just as easily also pay using
a debit card or a personal check. As with credit cards, there’s no set limit
to the amount of money an individual could spend in this manner on a single transaction. There would just be similar caveats to the
credit card payment method of certain transactions likely to be double checked if they were truly
outlandish and out of the ordinary for a given account holder. And, of course, in these cases the one added
caveat of the money needing to be in their account at the time, unlike a credit card
purchase. On that note, for anyone curious, the largest
known personal check ever written was for $974,790,317.77 in 2014 by one Harold Hamm
to pay his ex-wife a court mandated settlement after a divorce. Amazingly, Hamm’s ex-wife originally refused
to cash the check, feeling the amount was too small given Hamm’s then net worth of
$18 billion. However, she abruptly changed her mind the
next day and cashed it anyway. According to Forbes, the process of cashing
the check went ahead mostly like any other, with the exception of the bank calling Hamm
to make sure the check was genuine before depositing the money into his ex-wife’s
account. The largest known business check on the other
hand was written in 2008 by the Mitsubishi Financial Group to basically bail out Morgan
Stanley during the 2008 financial crisis. The total amount? A cool $9 billion. It’s noted that ordinarily such a massive
amount of money would have been sent via a wire transfer but because the day the money
was needed was Columbus Day (a day banks are closed) Mitsubishi decided to just cut Morgan
Stanley a check instead of waiting for the banks to reopen. You’ll note in all of this that we’ve
not yet dealt with the issue of paying cash. Interestingly, even though a billionaire could
pay for a $100 million yacht with a personal check or use a debit or certain credit cards,
as alluded to previously, they generally couldn’t pay with cash. Why? Well, to put it simply, nobody would accept
it and even the payer probably wouldn’t want to pay this way either as there are a
surprising number of very serious laws that are easy to unknowingly break when talking
about handling large sums of cash. While, for example, U.S. law dictates that
any debt (regardless of size) that the debtor attempts to settle with cold hard cash cannot
be refused (U.S. Code Title 31 §5103), when looking at buying something directly, it would
seem no such guarantee to be able to use cash is available, and this seems to be true in
many nations the world over. Beyond this, although most banks we researched
note that there’s generally “no limit” to the amount of money a customer can theoretically
withdraw from their account at once, in practise actually walking into a bank and attempting
to withdraw a million dollars, even if you can easily afford it, is a bit of a process. For starters, many banks simply don’t have
all that much cash held in reserve at any one time, so a request to withdraw such a
large amount quite literally couldn’t be physically honored in many cases. For this reason, most banks the world over
ask that customers wanting to withdraw large amounts of cash should call several days ahead
so that accommodations can be made. If a customer does call ahead to their bank
with a request to withdraw an especially large amount of money, providing they have the money
in their account and can prove who they are over the phone, there really shouldn’t be
any issues in getting money within a reasonable time frame, though understandably the more
money you request, the longer it will take to be delivered either to the bank or your
home. Further, most who do this should expect to
have the bank look into what they’re planning on using the cash for to make sure the customer
is not being scammed. For the super wealthy, however, they’re
likely to face much less scrutiny on that front, especially if withdrawing such large
sums is a frequent thing for them. For example, a man known to do exactly this
is boxer Floyd Mayweather, who revealed in an interview that he periodically has millions
of dollars in cash delivered to his home by his bank, largely just because he can. In keeping with his nickname “Money”,
Mayweather has been known to, at least in a few instances, walk around with more than
a million dollars in cash on his person and, seemingly in desperate need of a financial
advisor he’ll actually listen to, was once observed flashing a bank receipt showing that
he had over $100 million, in his checking account. On the less flashy and more humble side of
carrying a lot of cash, keeping with his overall “cool guy” persona, in 2013 George Clooney
gathered up 14 of his closest friends and presented each one of them with a briefcase
containing exactly $1 million in cash. The star explained to his stunned friends
that the money was a gift to thank them for their support when he was just a struggling
actor, reportedly stating: Listen, I want you guys to know how much you’ve
meant to me, and how much you mean to me in my life. I came to L.A., I slept on your couch. I’m so fortunate in my life to have all
of you, and I couldn’t be where I am today without all of you. So, it was really important to me that, while
we’re still all here together, that I give back… I know we’ve all been through some hard
times, some of you are still going through it… You don’t have to worry about your kids;
you don’t have to worry about school; you don’t have to worry about paying your mortgage. Going back to somewhat more non-charitable
examples, Mayweather is by no means an outlier in this regard and numerous celebrities and
millionaires who apparently don’t understand inflation and the power of compounding interest
have been observed withdrawing obscene amounts of money from their checking accounts either
to show off or make it rain especially hard that day. And don’t even get us started on Nicholas
Cage… Something they generally don’t do, however,
is spend all that money at once in a single place because a lot of businesses won’t
accept that much cash in one transaction. Along with the obvious issues of security
and practicality when it comes to accepting payment for something worth millions of dollars
in cash, especially large cash deposits often come with a lot of additional scrutiny from
both banks and the respective government of the country you’re making them in. In the UK, for example, under current UK Money
Laundering Regulations any business or sole trader that accepts cash payments in excess
of £10,000 has to register as a “high value dealer” with HMRC and accepting a cash payment
of this magnitude without doing so carries heavy penalties. Business and individuals who are “only ever
paid large amounts by credit card, debit card or cheque” on the other hand aren’t required
to do this and as a result, many UK businesses will simply not accept cash payments in excess
of this amount. Likewise, in the United States, banks are
required by law to report individual cash transactions of $10,000 or more to the IRS
under the Bank Secrecy Act of 1970. Additionally under current US tax law, all
individuals and most (but not all) American businesses are required to report any individual
cash payments of $10,000 or more to the IRS, even if the money isn’t deposited into a
bank account. As in the UK, most businesses don’t want
this kind of hassle so tend to avoid accepting payments in excess of this amount. And failure to follow the rules on this sort
of thing comes with both heavy fines and, for individuals, even potential jail time. It is noteworthy that the relatively small
amount of $10,000 as the trigger point has been something widely railed against in recent
years given this figure has not been adjusted for inflation since the law was established
in 1970. For your reference, $10,000 in 1970 would
be about $65,000 today. Curiously, one of the few places we found
that doesn’t specifically seem to limit the amount a customer can pay at once with
cash are auction houses. That said, as you may have noticed when we
listed the payment methods accepted by Sotheby’s earlier, the auction house has a disclaimer
about cash payments, noting that all such payments are “subject to any restrictions
and legal limits”. The auction house isn’t exactly forthcoming
with what exactly these supposed “legal limits” are and it’s noted in the book
Money Laundering Through Art: A Criminal Justice Perspective that the auction house has never
really made it clear how much cash they’re willing to accept at once for a piece they
sell. The same is true of Christie’s who don’t
even make mention of a limit on cash payments on any official documentation they’ve ever
released. This is largely because auction houses in
the US are under “no specific obligation to report any suspicious operations” to
the authorities, unlike many other institutions that handle large sums of money. Because of this, an auction house is likely
the only place, at least in the United States, where you could conceivably pay for something
worth millions of dollars in cash and not have it be that big of a big deal. It’s worth noting that your bank would still
report the withdrawal of the cash to pay the auction house to the IRS who in turn would
probably be very curious about where exactly the money went come tax season. Thus, the insanely wealthy person could very
much expect to get a call about what they were doing with those funds, or at least their
accountant would likely get such a call. Unsurprisingly from all this, while it’s
technically possible to pay for something worth millions of dollars at an auction house
with cash, in relatively recent history with so many other more convenient ways to pay,
we were unable to find any evidence of such a transaction ever taking place, though presumably
Floyd Mayweather has had some whopper of cash payments for things over the years, unless
he’s just re-depositing that cash he withdraws after he’s gotten sufficient “showing
off” mileage out of it. Either way, given the truly shocking number
of laws there are concerning large cash transactions, opening one’s self up for scrutiny from
the IRS is something even the obscenely wealthy don’t enjoy. Those guys got Al Capone- they can get anyone.
