Superyachts exist because the ultra-rich 'can’t figure out what to do with their money,' FTX's Sam Bankman-Fried says
Superyachts owned by Russian oligarchs have been snatched up by government officials around the world as a result of sanctions placed on close allies of Vladimir Putin, who is facing the economic wrath of the U.S. and European Union due to his invasion of Ukraine.
These yachts are a symbol of the massive wealth its owners have accumulated, but not all billionaires spend their money in such a lavish fashion.
Sam Bankman-Fried, the CEO of crypto exchange FTX and multi-billionaire, has taken an extreme yet pragmatic view of how to spend the $20 billion in wealth he’s generated in just a short period of time. In fact, his philosophy of effective altruism is what led him to trade cryptocurrency in the first place.
“When you think about yourself personally, about spending money on yourself, how much can you spend usefully on yourself?” Bankman-Fried said on Yahoo Finance Live (video above). “You can buy nice food. You’re talking about hundreds of thousands a year, right? You get to millions a year with fancy things, but after the 10th car, it’s not fair what you’re doing.”
“It’s hard to spend more than millions a year in an effective way on yourself, even if you wanted to,” he continued. “And I think that’s why we see superyachts — because a lot of people literally can’t figure out anything else to do with their money."
Instead of cashing out on superyachts or private jets, Bankman-Fried has adopted a more modest lifestyle of sleeping on beanbag chairs and driving a Toyota Corolla to get around, according to Bloomberg's recent profile of the billionaire. The 29-year-old, who amassed his fortune through his cryptocurrency platform, plans to keep 1% of his earnings and give the rest away.
His reasoning boils down to the tenets of effective altruism, a philanthropic movement that aims to maximize the impact of donated dollars.
“When you take a step back and think about it from an altruistic perspective, from a donation perspective, it would take billions a year just to eradicate a single sort of neglected tropical disease, and there’s a lot of them,” Bankman-Fried said. “And that’s only talking about global health in terms of existing diseases that are spreading.”
Given the scale of diseases and other causes of suffering around the globe, Bankman-Fried hopes to amass the kind of money that would meet the magnitude of the challenge. But at what point does one actually begin giving away wealth rather than investing it for future good deeds?
Last year, Bankman-Fried donated $50 million to pandemic relief and climate change causes, he told Bloomberg. This year, he pledged to donate sums in line with major foundations, between a few hundred million to $1 billion to be exact.
Meanwhile, the larger share of Bankman-Fried's fortune will accumulate value, if all goes according to plan, in hopes of greater returns when it comes to improving the world ahead.
“When you’re talking about having an impact on the world, I think that the point at which there’s nothing more to do with resources to help make the world better, you’re talking about pretty big numbers,” he said. “I think at least tens of billions, if not hundreds of billions and maybe trillions.”
Grace is an assistant editor for Yahoo Finance.
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