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Ikea founder leaves fortune to no one, structures it to ensure it lasts forever
- thinkloop 9y ago"The structure, which Kamprad established in the 1980s, assures that the Almhult, Sweden-based company stays outside the family’s direct control." "His wealth will now be dissipated " "Kamprad was not interested in money" Does anyone care about money less than Billionaires?
- tonyedgecombe 9y agoIf something is scarce you tend to care about it a lot more.
- superasn 9y agoI read this in the book on how to get rich by felix denis in which there is quote: “Money, it turned out, was exactly like sex. You thought of nothing else if you didn’t have it, and thought of other things if you did.”
- blowski 9y agoWhen you have $2.50 to your name, but you have to feed your family for the next week, you care a lot about money because you might die. I suspect billionaires see money more like kids collecting stickers. It's just a game, constantly trying to get more, for no obvious reason.
- trevyn 9y agoYou might die, or your ego doesn't want to be injured by asking for help? There's a distinction.
- bringtheaction 9y agoOh, why didn't all of the poor people in the whole world think of that. They could've just asked for help instead of starving to death! /s
- adventured 9y agoDepends on the mission, the end goal (if any), as with so many other things. If you're Gates, you likely feel an immense obligation to not destroy $100 billion (as with Buffett), as it's meant to be put to use as a public good. That has also become his professional life. And ideally you conservatively grow it further, to be able to bring that many more resources to bear on extremely expensive problems.
- davidgh 9y agoThis is why my respect for Bill Gates has gone up so much over the years. It’s cool when folks like Warren Buffett pledge to give away their personal fortunes when they die. However, his personal sacrifice is actually quite small, as he only gives it up when forced to by death. Bill Gates, on the other hand has two valuable resources to offer and he is actively giving away both right now: 1) much of his vast fortune, 2) his time, expertise, and influence to champion causes for the greater good.
- pmyteh 9y agoBuffett doesn't exactly spend it now (he's got famously cheap tastes). He's also giving much of it away while still alive: $3bn more in Berkshire Hathaway shares to the Gates Foundation last year. Forbes claims that's 40% of his BH holdings given away so far. http://fortune.com/2017/07/10/warren-buffett-donates-gates-foundation/ http://fortune.com/2017/07/10/warren-buffett-donates-gates-f...
- m_eiman 9y agoI think that emphasis should be placed on the word "direct" in your first quote :P
- highace 9y agoWhen you finally get the thing you've always wanted, you'll find you don't want it anymore.
- chatmasta 9y agoIn the wise words of Jay-Z, “having money ain’t everything but not having it is.” Never thought I’d quote Jay-Z on HN. EDIT: It was Kanye. Thanks companycalls for pointing that out. https://genius.com/Kanye-west-good-life-lyrics#note-945345 https://genius.com/Kanye-west-good-life-lyrics#note-945345
- companycalls 9y agoThis was Kanye West.
- expertentipp 9y ago> Does anyone care about money less than Billionaires? Having an army of good personal PR/marketing people does miracles. They will make people believe in everything about the person.
- notahacker 9y agoSome millionaires care about money so little they give it away to people that need it more rather than designing elaborate structures to hide it from their family and the taxman...
- TorKlingberg 9y agoSo, who ultimately appoints the directors? It sounds like it is Kamprad's heirs, but through some layers of indirection that prevents them from meddling directly.
- hjnilsson 9y agoThere have been many inquires into this by Swedish journalists over the years, but it's a very dense structure of companies with unclear ownership and structure. So who controls it is unknown. It is also a great tax evasion schema since the ownership is a charity (that donates money to "product design"), allowing IKEA to escape vast sums of taxation globally.
- pqs 9y agoBut then they put the Swedish flag in front of each shop. What a hypocrisy!
- mseebach 9y agoThe Swedish flags predates the Swedish welfare state by several hundred years (and IKEA predates it by a couple of decades).
- pqs 9y agoIt still seems an hypocrisy to me. In any case, they use the flag as a marketing tool, something which, from my point of view, doesn't show much respect for the flag.
- mseebach 9y agoBeing Swedish is about a lot more than paying taxes and maintaining the welfare state. What you're proposing basically amounts to the welfare state and its needs owning the Swedish nation, rather than the other way around.
- pipio21 9y agoWhen I was young and getting my driving license in Madrid I had to take a bus to the place were exams were done, in the south of Madrid(Mostoles). A friend of mine worked on IKEA and he told me that it was a lot of expectation as the founder had gone to Spain and it was taking the same bus that I took in order to visit the stores in Spain. It was surprising to me that someone owning billions will take the bus, while I was trying so hard to earn the necessary money in order to get rid of it.
- reacweb 9y agoThere is a difference between behaving like a poor for ethnological interest vs being obliged.
- jimktrains2 9y agoRiding a bus is not behaving like the poor.
- moltar 9y agoIt depends where you live ;)
- kgwgk 9y agoHe also tried to have his hair cut when visiting a cheap country. Maybe he did it in Spain...
- melling 9y agoNo medical or research institute, or Foundation, in there? It’s always nice when someone donates to the sciences or arts in perpetuity. https://en.m.wikipedia.org/wiki/Perimeter_Institute_for_Theoretical_Physics https://en.m.wikipedia.org/wiki/Perimeter_Institute_for_Theo... https://en.m.wikipedia.org/wiki/Howard_Hughes_Medical_Institute https://en.m.wikipedia.org/wiki/Howard_Hughes_Medical_Instit... https://en.m.wikipedia.org/wiki/Getty_Foundation https://en.m.wikipedia.org/wiki/Getty_Foundation
- _delirium 9y agoOfficially there is. Among the web of foundations is a charity dedicated to the art of furniture design. Less clear what it does in practice, since furniture design also happens to be IKEA's business, and the charity owns portions of IKEA.
- ableal 9y agoApropos Getty, my understanding is that the gentleman cared about fine furniture and classical (Roman) sculpture, which were housed (along with some paintings, namely a Corot) in the original Getty Museum. This museum was a fine replica of a Pompeian villa (complete with herbs garden patch) in Malibu, and according to the deal with the upscale neighborhood, you either showed up with a bus ticket or made an appointment for parking in the premises. One day last century they were kind to a foreigner who showed up early but unannounced with his family, having just seen a small sign in the road.
- hellofunk 9y agoMy understanding is that the Ikea corporate structure is much, much more complicated than this article even hints at, and in fact it is owned by so many different parties with different interests that go far beyond what is suggested here. Additionally, I think the Dutch are now the main owners of the main portions of the company that most associate with the name Ikea, as of a few years ago.
- kzrdude 9y agoWho exactly are "the Dutch"?
- I_took_the_bait 9y agohttps://en.wikipedia.org/wiki/Stichting_INGKA_Foundation https://en.wikipedia.org/wiki/Stichting_INGKA_Foundation
- Double_a_92 9y agoThis is very disrespectful of you towards the LBGT community!
- deleted 9y ago[deleted]
- deleted 9y ago[deleted]
- executesorder66 9y agohttps://en.wikipedia.org/wiki/Stichting_INGKA_Foundation https://en.wikipedia.org/wiki/Stichting_INGKA_Foundation
- hellofunk 9y agoThe "Dutch" refers to people belonging to the population of the Netherlands. Much like "Americans" refers to people from the U.S.
- WillReplyfFood 9y agoBasically a lawyer DAO, with the little problem that the involved constituting organelles have a interest of taking over and eating the uncontrolled host.
- amelius 9y agoWarning: article contains auto-playing video.
- forcer 9y agolike most of the articles on bloomberg.com Its an easy fix you can set auto-play false on your browser. At least its easy in Firefox, not sure about Chrome/Edge
- NiklasMort 9y agoI like how they wrote "They will have a more meager fortune ...of about $10 billion in 2016." tough life
- INTPenis 9y agoI'm swedish and I didn't know that Ingvar was behind Ikano bank. It's a major thing here, they have a bank, loans and property.
- scandox 9y ago"Great are the stars, and man is of no account to them. But man is a fair spirit, whom a star conceived and a star kills. He is greater than those bright blind companies. For though in them there is incalculable potentiality, in him there is achievement, small, but actual. Too soon, seemingly, he comes to his end. But when he is done he will not be nothing, not as though he had never been; for he is eternally a beauty in the eternal form of things." Also would you like to buy a cheap but functional home office desk?
- marmaduke 9y agoDo you have an attribution for the quote?
- neolefty 9y agoOlaf Stapleton, "Last and First Men, & Star Maker: Two Science-fiction Novels" (from Google book search)
- stevekemp 9y agohttps://en.wikipedia.org/wiki/Last_and_First_Men https://en.wikipedia.org/wiki/Last_and_First_Men is a good read, and very memorable if you've read it. Not sure, off-hand, which of the two books the quote comes from which I guess is my cue to re-read them both!
- justin66 9y agoIt's last and first men: https://books.google.com/books?id=ubHmCQAAQBAJ&lpg=PT351&ots=rw9kw36b9j&dq=%22Great%20are%20the%20stars%2C%20and%20man%20is%20of%20no%20account%20to%20them.%22&pg=PT351#v=onepage&q=%22Great%20are%20the%20stars,%20and%20man%20is%20of%20no%20account%20to%20them.%22&f=false https://books.google.com/books?id=ubHmCQAAQBAJ&lpg=PT351&ots...
- hypertexthero 9y agoStar Maker is a beautiful book, warmly recommended, available here: https://ebooks.adelaide.edu.au/s/stapledon/olaf/star/ https://ebooks.adelaide.edu.au/s/stapledon/olaf/star/
- viraptor 9y ago> The foundation owns itself, so no Kamprad family members hold shares. Late stage capitalism... Anyway, I don't really get why the article claims he didn't care about money. It's known for a while that IKEA avoids taxes in many dodgy ways. If he really didn't care, the connected companies could pay a reasonable amount.
- dagw 9y agoHe didn't really care about money personally, or at least not the material things money can buy. At least that's the image he worked very hard to portray by driving an old Volvo, living in a modest house and wearing clothes bought in a second hand store etc. He obviously cared a lot about his companies making as much money as possible. Although if you asked him he'd probably say that all that tax avoidance was just him being frugal.
- chiefalchemist 9y agoOk. But when why not donate the tax savings to an org that can use it? I just can't see "I don't care" resulting in hoarding (so much money). Maybe "Money doesn't motivate me" would be more accurate?
- dagw 9y agoOk. But when why not donate the tax savings to an org that can use it Technically the IKEA Foundation (www.ikeafoundation.org) is that charitable organisation. And technically they do donate a bunch of money each year to various causes. Of course they're not the most transparent of organizations so it's hard to really judge their philanthropic efforts. Maybe "Money doesn't motivate me" would be more accurate? At the risk of trying to psychoanalyses a man know very little about,I'd say that "personal wealth doesn't motivate me" is probably the most correct statement. He obviously cared very much about his businesses and making them as successful as possible, and as such probably cared deeply about money to the extent that they're the 'points' used to judge who's winning that game.
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- _pmf_ 9y agoHow very convenient; that way, nobody will have to pay taxes.
- bradleyjg 9y agoThe development of no small part of English common law was the result of a multi-century cat and mouse game between wealthy landowners that wanted to keep their property in the family "forever" and everyone else that didn't want to have the dead hand of the past control substantial portions of the country's productive assets. Two groups in particular that didn't like to see assets locked away were dissolute heirs and their creditors.
- patentatt 9y agoSee: https://wikipedia.org/wiki/Rule_against_perpetuities https://wikipedia.org/wiki/Rule_against_perpetuities
- greensoap 9y agoPatent attorney? Me too. Have you read the malpractice case in California that basically says that you can't be found to have practiced malpractice for violating the RAP because its too convoluted?
- sbierwagen 9y agoFrom that article: "It is notoriously difficult to properly apply: in 1961, the Supreme Court of California ruled that it was not legal malpractice for an attorney to draft a will that inadvertently violated the rule." (Emph added) Presumably California would look less kindly on someone saying to their lawyer, "I want to lock up this money forever", and the lawyer in response saying, "Yes, I will draft your will so that the money will only ever be spent in the manner you command."
- nugget 9y agoRAP has been abolished in a number of US states I believe, where dynastic trusts can now persist "forever".
- sevensor 9y agoRelated, I remember reading that Jefferson worked hard to prevent inheritance in fee tail from becoming established in our republic.
- gadders 9y agoAccording to the Economist, the whole structure was created to minimise tax [1] "What emerges is an outfit that ingeniously exploits the quirks of different jurisdictions to create a charity, dedicated to a somewhat banal cause, that is not only the world's richest foundation, but is at the moment also one of its least generous. The overall set-up of IKEA minimises tax and disclosure, handsomely rewards the founding Kamprad family and makes IKEA immune to a takeover. And if that seems too good to be true, it is: these arrangements are extremely hard to undo. The benefits from all this ingenuity come at the price of a huge constraint on the successors to Ingvar Kamprad, the store's founder (pictured above), to do with IKEA as they see fit." [1] http://www.economist.com/node/6919139 http://www.economist.com/node/6919139
- irickt 9y agoThis article gives a much better explanation of the intricate arrangements.
- chiefalchemist 9y agoOn one, this is honorable and impressive. On the other, why hoard so much? Could he have been at least slightly more generous all along? Wouldn't that, done earlier, create a positive sooner? A positive that could have been compiling social compound interest (if you will)? I under the rules of the game (i.e., capitalism). That doesn't mean you have to buy all in to those rules. There are (personal) alternatives.
- zaptheimpaler 9y agoIf IKEA can generate a higher return on capital than generally available, it could make more sense to accumulate and compound the money for as long as possible so he can donate a bigger amount later. Hard to quantitatively compare to the utility of early philanthropy.
- chiefalchemist 9y agoCapital? Maybe. Provided IKEA doesn't go tits up. What I'm suggesting is a form of portfolio diversity. And who's to say that if you invest in NPO X today that the "ROI" won't be significant5 or 10 years from now. Why not try to put a value on lives saved, impacted, etc.? So yeah. Use Capital as your only measuring stick and you're correct. But the real truth is, there's more to life than Capital. But of course the capitalist doesn't want you to know this. Note: I'm not suggesting better (or worse), just different. There are alternative measurements.
- zaptheimpaler 9y agoI agree that there's much more to life than capital/money. What I'm saying is its very very hard to put a value on life saved/changed and compare that to money. Is donating $1M to an NPO distributing malaria vaccines today better or worse than donating $2M worth of malaria vaccines in 2 years? Who knows? How would you even begin to compare those 2 scenarios? You'd have to translate the subjective costs of being sick, costs of a life, all the uncertainties around effectiveness of the vaccine, uncertainties around how well the NPO uses its capital etc. into a dollar value to compare.. there is no right answer there, its just too uncertain. So if he did a similar calculation and decided more money later is better for the world than less money now, well I can't fault him because that calculation is infinitely complex. Seems like you are saying donating say 1% every year is better than donating 0 and then 100% at the end, but it is very hard to tell.
- sjreese 9y agoWell it won't last - greed will takeover when the employee realize he can be fired - so what to do; OUTWIT OUTPLAY OUTLAST a coalition of family members is how it all starts
- YTGRK 9y agohttps://youtu.be/I2l8xkjTUh4 https://youtu.be/I2l8xkjTUh4
- kylnew 9y agoAm I missing something or couldn’t a big enough company just buy out 51% of the owning companies and take over/shut down IKEA? This way his family still could get a fast payout if they all work together.
- vanderZwan 9y ago> Kamprad’s heirs now won’t have direct control of the firm. They will have a more meager fortune derived from family-owned Ikano Group, a collection of finance, real estate, manufacturing and retail businesses which had total assets of about $10 billion in 2016. I do not think the word "meager" is really appropriate when we are talking about $10 billion in assets.
- joslin01 9y ago"More meager" meaning "lesser" and the word-choice was almost surely intentionally facetious.
- fetbaffe 9y agoOne have to remember why this was setup in the way it is, to protect the company forever. In Sweden during the 70-ties 80-ties the Social democrats was pushing a radical socialist agenda ('löntagarfonder') to take over companies by taxing profits and then buying shares with it, all controlled by trade unions. Result of these policies was that many companies left Sweden to protect itself (of course). IKEA, Tetra Pak and H&M to mention a few. These socialist policies was one of many breaches of the so called Swedish model that the Social democrats did during the 70-ties 80-ties. This was beginning of the end of the Social democratic era and they started to lose elections one after the other. These funds was later abolished by the next right wing government. https://en.wikipedia.org/wiki/Employee_funds https://en.wikipedia.org/wiki/Employee_funds
- akuji1993 9y agoThis sounds so obviously stupid I wonder why nobody stopped and said "You know, we might just make all these companies leave with stuff as ridiculous as this."
- lev99 9y agoIn many socialist points of view companies do not provide value, they are viewed as rent seekers. Value = {Raw Resources} + {Labor} + {Tools used by labor}. Companies own the tools, and take a margin of value. If labor owned the tools they could remove that margin. This sounds like the world view used to design that policy.
- namlem 9y agoYeah, that's Marx's Labor Theory of Value. The problem is that it doesn't account for the value of risk. It's easy to look at companies making money and assume they're extracting value if you ignore all the failed attempts that outnumber the successes 5 to 1. Now, rent-seeking is still a problem and corporations are often guilty of it, but the idea that all profit is rent is ridiculous. Some of it is compensation for risk.
- saiya-jin 9y ago
- dawhizkid 9y agoWhen will someone finally build affordable lightweight modular furniture
- AndyMcConachie 9y agoIt's all just tax games. https://www.cnbc.com/2017/12/18/eu-regulators-to-investigate-ikeas-dutch-tax-deals.html https://www.cnbc.com/2017/12/18/eu-regulators-to-investigate...
- gcb0 9y agothink those are unrelated. its about a headquarters shift in early 2000s to hide tax.
- cratermoon 9y agoI sort of feel like this should be the default required disposition of any fortune. A little something for the heirs, the rest into public trust.
- bitL 9y agoSeems like either giving control to family nor professional managers is a good option. Family usually has no clue about business and professional managers succeeded in mastering the art of moving within company, not making it a business. When a founder goes away, it's always uncertain where the company ends up.
- mathattack 9y agoInteresting that the company essentially owns itself, as one of the defenses of companies is any money going into them eventually findable their way to people: taxes, employees, owners, or (recursively) employees or the taxes, employees and owners of their suppliers. In the end it’s its people behind them. But this breaks that mold.
- fapjacks 9y ago"They will have a more meager fortune ... which had total assets of about $10 billion in 2016."
- egberts1 9y agoHow long would it take to assemble an IKEA casket? #headuck