Ninety. Nine. Percent.
I've had the opportunity to rub shoulders with a few billionaires over the past few weeks, and it's remarkable how differently they think about money than the people who don't have it. Sure, they may buy a nice car (or jet), but after a certain level the only thing you can do with that kind of money is plug it back into something meaningful.
Hats off to Zuck and the other people who try to turn their success into something even greater than, well, their success.
You are thinking about it the wrong way. You don't spend $45B on stuff for yourself. You spend $45B on changing the way governments and populations live work and how power is balanced.
When Bud Fox asked Gordon Gekko "How much is enough" Gekko knew immediately that Fox wasn't in the same league. Money isn't about stuff, it's about power and influence.
I think new rich crowd will almost completely replace old generation wealthy in next 50 years or so. People who are born in this decade will have very hard time understanding philosophies and life style choices of Gorden Gekko.
See: The Millionaire next door
World is a strange place. Very few millionaires win and lose spectacularly. Nearly all of rich people out there are silent and invisible.
Peter Thiel, the godfather of "today's centi-millionaires", has a butler.
— At least he had one in 2007:
just because via social media you see more of the "new rich", which have desire to make public statements and be as visible as possible, doesn't mean that's all there is.
$45B is even overkill for that. Each presidential candidate spent (or had spent on their behalf) roughly $1B in 2012. Zuckerberg therefore could have doubled a candidates spending for each presidential election for the rest of his life and still have half his fortune. $45B is that huge.
EDIT: The multiple downvotes seem to indicate I said something that is disagreeable. I'm not implying that buying elections would be a better use of Zuckerberg's money, just that he has so much money that elections are just more "stuff" he could buy without even thinking hard about it.
That is clearly not true. If that sort of ROI existed in anywhere near the general case, a lot more people and companies would spend a lot more money on it, and they don't. Perhaps there exists lobbying opportunities with these kinds of ROIs, but they are limited, and there definitely isn't a 5,000% floor on it.
I think the problem with the zerohedge article (and the report it summarises) is that, first, they seem to assume that all corporate welfare benefits the businesses doing the lobbying locally (not to businesses in general, which is probably more the case -- Ford lobbying against foreign competition will help Chevrolet equally, regardless of how much either firm spends on lobbying), and second, that corporate welfare only exists because of lobbying: Politicians still need to get elected, and creating industry, jobs and high-profile ribbon-cutting opportunities in their districts (regardless of whether businesses lobby them for it or not) is likely to remain a popular tactic in the absence of lobbying.
The best thing politicians can do for the common good, is to get the hell out of the way and let productive people be productive.
It's nice when vanity projects end up helping the masses (and we'll have to wait and see how successful it is at that). However, we shouldn't act like this very public display of wealth (again, before anything is even done) has motives that are so different from, say, giant statues of oneself or giant mausoleums.
What's the difference between it being all done in vanity and it being all done in goodwill? It's literally the same thing to the rest of the world, the only difference is some internal chemical state in his brain.
Instead, it has to be "charity" now. Very few rich people ever did charity well.
Usually a billionaire giving his fortune away does it out of vanity, out of guilt, for the tax breaks, out of conviction that their success in business makes them equally expert in solving the world’s problems or last but not least as “legacy” as explained by John Caudwell:
It's like hating Ford because they make cars, while ignoring all other automobile companies.
And they want to build cars for all poor people, but those cars can only travel to certain destinations on certain roads, but Ford making and providing these cars means other organisations who sell bicycles or mopeds or small cars (which provide a lot more freedom) are hampered.
I like the future Bill Gates and Elon Musk want to bring. I do not like the future the Koch Brother's envision.
I won't excuse the whole "killer instinct" thing they all have in common. It's just how humans sometimes work.
Don't get me wrong - Koch et al is a weird company but there's room for that, too. W.R.T energy I hope you're right but it moves slowly.
Even if you happen to be in majority with your progressive views, in this instance, there is no guarantee for that generally, especially if we consider the entire global populace.. is what I was trying to point out.
"Everyone ... wants to shape the world in their specific ideal."
Most people give up on this idea in their mid-20s though or never really believe that they can.
Yes, well that's 100% the distinction.
The OP seems to think that the obvious choice is for money to "go to something meaningful" without specifying what "meaningful" actually is. Within this context, that would seem to mean the "meaningful" thing is "greater -good" charity. My point is that more frequently, this type of money go toward direct influence of power like setting up Super PACs, hosting power networks like Sun Valley Conference, establishing think tanks, grants to universities for certain research etc...
And you will.
At the Cleveland church he went to, significant portions of his time spent there was to write checks to parishioners.
I'd say it takes roughly the same amount of effort to spend money as it does to make it. You still need an organization, you still need to make really hard decisions day in and day out. It seems that there's something fundamental about philanthropy that doesn't scale.
Personally, I think the work a person does to earn that kind of money, assuming of course it's from legitimate commercial activity, is plenty enough, one shouldn't feel morally compelled to donate it back. But like you said, what else are you going to do with it? Doesn't make a lot of sense anymore to leave billions to heirs.
> Playboy: What does the money actually mean to you?
> Jobs: I still don’t understand it. It’s a large responsibility to have more than you can spend in your lifetime—and I feel I have to spend it. If you die, you certainly don’t want to leave a large amount to your children. It will just ruin their lives. And if you die without kids, it will all go to the Government. Almost everyone would think that he could invest the money back into humanity in a much more astute way than the Government could. The challenges are to figure out how to live with it and to reinvest it back into the world, which means either giving it away or using it to express your concerns or values.
> Playboy: So what do you do?
> Jobs: That’s a part of my life that I like to keep private. When I have some time, I’m going to start a public foundation. I do some things privately now.
> Playboy: You could spend all of your time disbursing your money.
> Jobs: Oh, you have to. I’m convinced that to give away a dollar effectively is harder than to make a dollar.
Agreed. And not to get too political, but I'm thankful that individuals in the U.S. are exceptionally generous, and do think about these things. And that those who DO earn copious amounts of money have the choice of what to donate it to - rather than having 90% of it confiscated and doled out by someone else who didn't earn it.
You don't give people fish to eat, you teach them how to fish.
Teaching isn't presently scalable. You can look to the failures of our public school system for evidence. One might be tempted to look to other countries for systems that work better, but there has to be a political path forward for implementing those systems here.
One good teacher can only teach so many. That good teacher may not be good at teaching teachers. Teaching is not warfare, where good soldiers can teach other people to teach soldiers.
Teachers that are good at teaching teachers can only teach so many teachers. Any attempt to scale a working method will eventually run out of talent. And if you don't stop when you run out of talent, then the quality of your teaching will inevitably go down. Universities can only get so big.
Billionaires who want to put their wealth towards education are pretty limited in their options.
Yah, I don't necessarily disagree with their mindset. I've crossed a lot of spectrums, including chilling and rubbing shoulders with the rich to scraping by. I definitely do agree with a lot of the lofty 'moon shots' and some of these people have achieved remarkable things not just for themselves, but for society as well.
But, with Zuck, I just don't know. Gates got rich off operating systems and crushing opponents at all costs (a success story for capitalism). Zuck, from advertising and selling 'your' data. It's admirable that he's giving 99% away, but, I just don't get a warm fuzzy feeling about it.
Time will tell and I hope it turns out good.
IMO that's a really narrow-minded read of what Facebook is. >1B people log into products he founded every day. He lets advertisers target you using data you've provided, as you sit on the platform he helped build, but I'm not convinced that makes him an evil dude.
FB might not be some evil company, but they are definitely not nice guys.
Okay perhaps he was young and naive. But is Facebook naive now in Belgium where they want to track people outside of facebook "for their own safety"?
This is EVIL!!
So, yes, you can do a lot worse (to your society) with $$billions.
(Sorry for the rant. Please carry on.)
Leave it to your children so you can perpetuate hereditary wealth on a grand scale. Because your great-great-great-great-great-great-great grandchildren should never have to work, right?
Having said that, the first thing I thought of was the tax implications. If the shares were to eventually be sold (but not donated), the State of California alone would earn roughly 6 billion dollars in tax revenue. And the Federal Government another 13 - 15 billion. Assuming a lot of variables that could push the value up or down, of course, and the fact that they would be unlikely to sell the majority of their shares any time soon. My understanding is that by donating the appreciated stock to a charity, under current laws, there is zero tax due. I wonder if there's a state financial forecaster or analyst in Sacramento having a bad day today.
There is a saying "you can name the price if I can name the terms". Zuckerberg saying this and when he actually does this are two different things. (Per my other comment). I am not saying that he won't (how would I know?) but this is a promise that is based on a future event that, given the age of both parents, could easily be 50 or 60 years in the future. And of course exactly nothing will happen if he changes his mind (he isn't going to issue a press release on that) and nobody has any access to his finances anyway. So he is free to say anything he wants for any reason and that of course could change. That said it's his money and he can do what he wants with it. And there is no reason to even announce this if not playing some PR angle.
Edit: And to my point I just got a WSJ Technology Alert email with the headline "FACEBOOK'S MARK ZUCKERBERG IS GIVING AWAY 99% OF HIS SHARES" and then further down in a paragraph "over the course of their lives".
Here is the world's smallest fiddle...
And either way, the charitable organizations deserve to be supported and will do good for society, and they get to pick how it is used. Which doesn't seem like a bad thing, when the Federal government can barely agree on any budget at all.
tl;dr Giving capital gains away is very tax advantageous!
Regardless, he's saving a fortune in tax by donating money to his own foundation. It could turn out to be awesome like the Gates Foundation, but it could also be a decades long experiment in tossing money down the drain as he works on pet projects. Hopefully the former!
If so, I'm disappointed that Mark didn't choose to be Zuckerberg-Chan.
Honestly, why are you disappointed?
It's otaku humor.
The hyphenating of both names is an interesting concept, but would in all practicality be a difficult thing to pass on after a few generations if it were the standard. Though maybe I'm not thinking thorough it properly.
Where isn't it possible?
> Surnames combined with a hyphen, such as Meier-Müller, are still allowed. Combined surnames are not official registered names, but may be used in everyday situations and recorded in your passport and identity card.
So, it's not "official" but you can use it everywhere including on your official documents.
By donating stock directly, he still gets to deduct the full value of the stock without paying any tax, and the charity (or more likely, private foundation) gets to keep the full value without paying any tax. And it could take as long as it wanted to liquidate the stock and get the best price.
Yes, and the foundation will likely not liquidate the stock, but use the proceeds of some kind of swap contract.
Basically, if the Zucks own the LLC, then until funds actually leave the LLC they really haven't made a donation at all.
As someone doing research at a top university, I am constantly annoyed by short term vision and optimizing for publication number at all costs. This system is broken.
Alfred Sanger got 2 Nobel Prizes, and he spent a lot of time without publishing before each. Clearly something impossible to do these days.
"Top" "Elite" universities are usually optimized for their metric – which is the Shanghai index, which is based on number of publications in english-language magazines.
In countries outside of the Anglosphere often research at universities can go a lot slower, as they have no chance in the Shanghai index anyway.
The Fraunhofer institute has, in cooperation with Sony, VW and Mercedes, worked on self driving cars since 2002. Sometimes you just have to throw a few million euro and a few decades onto a project to get some results.
Good intentions in philanthropy are a dime a dozen, actual results are less common.
I'm curious how they plan to liquidate that shares as it will have quite some effect on the dynamics of Fb and on this:
I will continue to serve as Facebook's CEO for many, many years to come
Also, you can get loans at very low rates by putting shares into collateral. This is how Larry Ellison funds much of his endeavors.
They'll donate 99% of their shares along their lifetimes. In the meantime, they'll get cash in several ways: dividends, salaries, bonuses, etc.
Empires grow and empires crumble.
Anyway though, it's still a lot. And I hope they follow what other billionaires have been doing; not just throwing it at charities, but putting it into research and even funding entirely new projects.
Funding startups and research labs that have no economic goal or an economic return to shareholders is something that is very needed. I see much of the funding coming from this.
Are you referring to The Giving Pledge ? Both Mark and Priscilla have signed it :
"We salute the Giving Pledge movement, and are proud to be part of its declaration that those who have been fortunate should give back at least half of their wealth during their lifetimes."
You might be interested in reading about Chuck Feeney (the founder of Duty Free Stores), who was the original guy advocating for such hands-on charitable work.
Four hundred. And fifty. Million.
I hope you understand that your personal experience is anecdotal evidence at best and perception bias for you didn't take into account the downside for the rest of the population.
What about this stubborn family member who refuses to have a facebook account because he believes in privacy as a fundamental freedom, how exactly facebook is bringing you closer to him/her?
Please define active user as it could mean anything, then again don't, as number of used (which is more appropriate than users for facebook) and advertising dollars are hardly valid metrics for bringing people together and positive life changing.
Turns out you are right actually, some are suffering through the experience and feel they are forced to use facebook, note that they are mostly in the same demographic group which happen to be the next generations of adults.
This tin foil hat edge case is a boat that has sailed a while ago, facebook is a major privacy problem and as we know privacy is the foundation for liberty and freedoms. But Facebook is also censorship and manufacturing public opinion.
Not only that, but contrary to your personal experience facebook usually makes people miserable and feel bad about themselves and other personal experience point to it being bad and getting worse at giving you the meaningful posts.
If you care about your loved ones and family you should help them get away from facebook, not trap them in by putting all you interactions with them there.
A.We can all confidently agree that a large number of users use fb.
B. Most of what you have linked is opinion pieces. The first one I clicked had private chat transcripts from Zuckerberg when he was a kid and fb was nothing like what it is today.
C. Some studies are referenced which show people are miserable using social networks. Similar results have been "derived" for almost anything: news, video games, television, cell phones etc. I recommend taking it with a pinch of salt.
D. You say that advertising dollars mean nothing. Exactly the opposite is true. Try getting coke, kraft, apple and other brands to associate themselves with something that makes miserable.