Here’s a great problem to have: What to do with billions of dollars of personal wealth.
Bill Gates and Larry Page, worth more than $100 billion combined, had some notable thoughts on the pressing economic matter at this year’s TED conference in Vancouver. Gates, the founder of Microsoft (MSFT), elaborated on prior claims that he’d leave most of his $75 billion to his foundation rather than his three kids. When asked if he would at least bequeath enough to his kids to make them billionaires, Gates answered, “Nope, they won’t have anything like that. We want to strike a balance so they have the freedom to do anything, but not a lot of money showered on them so that they can go out and do nothing.”
Page, Google’s (GOOG) CEO and co-founder, is notoriously protective of his private life and didn’t address inheritance plans for his two kids. But he did muse about putting Elon Musk in his will. Page quipped that, rather than leaving his $30 billion fortune to some cause or nonprofit group, he’d rather give it to a visionary entrepreneur like Musk — who helped found Tesla (TSLA), PayPal, SpaceX and other ventures — so he could put the billions to work doing something revolutionary.
Musk, for instance, has plans for a “hyperloop” that could transport people between San Francisco and Los Angeles (nearly 400 miles) in less than one hour. And he hopes to colonize Mars and eventually send 80,000 people there, a scheme Page called “philanthropical” because it might benefit humanity by developing alternatives to Earth, should we render it uninhabitable.
The 'giving pledge' — some do, some don't
Gates might quibble with Page’s approach, since he and his wife Melinda run the type of foundation that relies on donations from wealthy individuals. The Gateses are also members of the “Giving Pledge,” a group of capitalist hall-of-famers who promise to commit the majority of their wealth to philanthropy once they die. Musk is also a giving pledge member; Page isn’t.
Probing what rich people do with their money has become a kind of international parlor game during the past few years, since the rich are getting richer in many parts of the world, while most of the rest of us are either stuck in place or falling behind. Pope Francis has even weighed in on the matter, saying earlier this year, “Those who have demonstrated their aptitude for being innovative and for improving the lives of many people by their ingenuity and professional expertise can further contribute by putting their skills at the service of those who are still living in dire poverty.” The pope is still waiting for donations.
Still, Gates isn’t the only billionaire trying to raise his kids like a mere millionaire. Warren Buffett, who’s worth nearly $60 billion, bequeathed his son Peter a grand total of $90,000 for personal use and once turned him down for a loan. (Buffett has also given each of his kids a $1 billion philanthropic fund to devote to causes of their choice.) Amazon (AMZN) CEO Jeff Bezos ($27 billion) reportedly refuses to hire a nanny for his four kids, and his wife MacKenzie picks them up from school most days in a Honda minivan.
On the other hand, you could argue there's public demand for flamboyant heirs and heiresses to envy, ogle and hate. Paris Hilton, Justin Murdock and the Ecclestone daughters provide ongoing grist for tabloids and celebrity websites. The new reality show Rich Kids of Beverly Hills might offend, but it also fascinates and lights up Twitter (TWTR).
And some rich kids seem to do good, eventually. Megan Ellison, daughter of Oracle (ORCL) CEO Larry Ellison ($48 billion) dropped out of film school but became one of Hollywood’s biggest funders of artsy, independent movies — the kind that typically struggle for funding — after coming into an unspecified fortune around the age of 25. With billions to burn, it must be a relief to find something worthwhile to spend it on.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.