8 ms·

Why should his wealth reduce?

SuoDuanDao 4y ago
If I give $10 to charity, my wealth is reduced by $10. The naive assumption is that if Bill Gates gives $10B to charity, his wealth is also reduced by $10B. Can you explain why the naive assumption is wrong? Because I actually can't, not without more thought and research than I've given it.
- throwaway98797 4y ago
  cuz if i have 100b and give away 10b, but the remaining 90b grows 2x i have more than what i started with
- WithinReason 4y ago
  You invest $100, now you have $110. You give away $10, you have $100 again.
  - frumper 4y ago
    Then your net worth is $110 and when you give away $10 your net worth goes down $10.
    - whatwherewhy 4y ago
      Gates pledged to give his wealth away before he dies, not immediately. And that's good - the world will be getting much more money than it'd get if Gates just gave away all his money the moment he announced it. > Then your net worth is $110 and when you give away $10 your net worth goes down $10. Gates' wealth fluctuates all the time. There was a time when he was rather low due to his donations - multiple 10s of billions down. He got back over $100B from cca $50B - that's $50B more for charity than if he just donated everything he had left.
      - frumper 4y ago
        I'm not saying it's bad to do what you're describing, I'm just saying when you actually donate money, not pledge, it decreases your net worth.
        whatwherewhy 4y ago
        It does, but that doesn't mean your net worth will decrease by that amount that year. There are other effects - e.g. the rest of his investment portfolio.
        frumper 4y ago
        if you give away $10 then your net worth at that moment goes down...it may easily recover that price, but if you count it like that then you can surely count that the money you donated would have been worth more too
        whatwherewhy 4y ago
        Yeah but nobody has that granular logs of Gates' net worth and donations. At best, it's calendar months, sometimes you can try to assume weeks, with a big maybe.
- Workaccount2 4y ago
  Because you can use $10B to give $500M/yr for a limitless period of time. Gates can give substantially more money if he leverages it to grow over time. I would wager that it is going to take decades if ever that the Gates fund will hit $0. Yeah it's not as flashy as "Died with $0 of his fortune left", but under the hood the net good done is orders of magnitude greater.
  - antisthenes 4y ago
    > Because you can use $10B to give $500M/yr for a limitless period of time. If you can do that in perpetuity, then it actually means you're giving away none of your wealth away. You're selling the time value of money back to the people that generated it for you. You've essentially taken out a giant loan, but the interest is being borne by the people who generated that wealth for you in the first place. And your "charity" amounts to sometimes reimbursing those people for paying the interest.
  - SuoDuanDao 4y ago
    In that case, more power to him, and no argument about net good - I guess for me, the issue is with the wording. 'Most of his wealth' to me implies someone's giving away most of the principle, not most of the proceeds. Which of course Bill Gates did, just to a charity he also controlled. Again, more power to him and I'm glad the precedent is set, regardless of how I feel about the Gates foundation's activities. But it still doesn't feel the same as giving it to a charity someone else controls.
- deleted 4y ago
  [deleted]
germinalphrase 4y ago
Probably, the words “give away” imply that all the wealth will, indeed, be given away. For instance, Chuck Feeney gave away billions until it he was left with only $2 million (or so it was reported).
- whatwherewhy 4y ago
  As far as I know Bill Gates is still alive
  - germinalphrase 4y ago
    So is Chuck Feeney.
    - whatwherewhy 4y ago
      So what? Gates said he will donate before he dies, not immediately.
      - germinalphrase 4y ago
        I think the Gates Foundation does good work, but the cynical "so what?" is that creating a structure like this to "give away most of his $124bn (£107bn) fortune during his lifetime" (RE the linked article about Bezos) is a ruse to maintain control over the money without paying taxes - while also producing some good PR. If they truly wanted to just give it away, Chuck Feeney offer a straight forward model for doing so. You just do it. If "giving it away" merely means putting it into a foundation you control, many people would feel that little has, in fact, been given away.
        whatwherewhy 4y ago
        I fully believe they're doing it to retain control of their money, and I don't mind, Bill Gates is a master handler of money - in fact I find the system that led to people like Bill Gates working on things that are good for the general humanity to be genius. It's not like he's going to embezzle the money out of his foundation to buy another villa. Bill Gates doesn't fucking care about a hundreth villa. He's really working on the projects, and he's deploying the money in a way that promises results - that's exactly what I want to happen. I am happy. And the PR? Let the guy have his fame, he's really worked for it.

If I give $10 to charity, my wealth is reduced by $10. The naive assumption is that if Bill Gates gives $10B to charity, his wealth is also reduced by $10B. Can you explain why the naive assumption is wrong? Because I actually can't, not without more thought and research than I've given it.

throwaway98797 4y ago
cuz if i have 100b and give away 10b, but the remaining 90b grows 2x i have more than what i started with
WithinReason 4y ago
You invest $100, now you have $110. You give away $10, you have $100 again.
- frumper 4y ago
  Then your net worth is $110 and when you give away $10 your net worth goes down $10.
  - whatwherewhy 4y ago
    Gates pledged to give his wealth away before he dies, not immediately. And that's good - the world will be getting much more money than it'd get if Gates just gave away all his money the moment he announced it. > Then your net worth is $110 and when you give away $10 your net worth goes down $10. Gates' wealth fluctuates all the time. There was a time when he was rather low due to his donations - multiple 10s of billions down. He got back over $100B from cca $50B - that's $50B more for charity than if he just donated everything he had left.
    - frumper 4y ago
      I'm not saying it's bad to do what you're describing, I'm just saying when you actually donate money, not pledge, it decreases your net worth.
      - whatwherewhy 4y ago
        It does, but that doesn't mean your net worth will decrease by that amount that year. There are other effects - e.g. the rest of his investment portfolio.
        frumper 4y ago
        if you give away $10 then your net worth at that moment goes down...it may easily recover that price, but if you count it like that then you can surely count that the money you donated would have been worth more too
        whatwherewhy 4y ago
        Yeah but nobody has that granular logs of Gates' net worth and donations. At best, it's calendar months, sometimes you can try to assume weeks, with a big maybe.
Workaccount2 4y ago
Because you can use $10B to give $500M/yr for a limitless period of time. Gates can give substantially more money if he leverages it to grow over time. I would wager that it is going to take decades if ever that the Gates fund will hit $0. Yeah it's not as flashy as "Died with $0 of his fortune left", but under the hood the net good done is orders of magnitude greater.
- antisthenes 4y ago
  > Because you can use $10B to give $500M/yr for a limitless period of time. If you can do that in perpetuity, then it actually means you're giving away none of your wealth away. You're selling the time value of money back to the people that generated it for you. You've essentially taken out a giant loan, but the interest is being borne by the people who generated that wealth for you in the first place. And your "charity" amounts to sometimes reimbursing those people for paying the interest.
- SuoDuanDao 4y ago
  In that case, more power to him, and no argument about net good - I guess for me, the issue is with the wording. 'Most of his wealth' to me implies someone's giving away most of the principle, not most of the proceeds. Which of course Bill Gates did, just to a charity he also controlled. Again, more power to him and I'm glad the precedent is set, regardless of how I feel about the Gates foundation's activities. But it still doesn't feel the same as giving it to a charity someone else controls.
deleted 4y ago
[deleted]

germinalphrase 4y ago

Probably, the words “give away” imply that all the wealth will, indeed, be given away. For instance, Chuck Feeney gave away billions until it he was left with only $2 million (or so it was reported).

whatwherewhy 4y ago
As far as I know Bill Gates is still alive
- germinalphrase 4y ago
  So is Chuck Feeney.
  - whatwherewhy 4y ago
    So what? Gates said he will donate before he dies, not immediately.
    - germinalphrase 4y ago
      I think the Gates Foundation does good work, but the cynical "so what?" is that creating a structure like this to "give away most of his $124bn (£107bn) fortune during his lifetime" (RE the linked article about Bezos) is a ruse to maintain control over the money without paying taxes - while also producing some good PR. If they truly wanted to just give it away, Chuck Feeney offer a straight forward model for doing so. You just do it. If "giving it away" merely means putting it into a foundation you control, many people would feel that little has, in fact, been given away.
      - whatwherewhy 4y ago
        I fully believe they're doing it to retain control of their money, and I don't mind, Bill Gates is a master handler of money - in fact I find the system that led to people like Bill Gates working on things that are good for the general humanity to be genius. It's not like he's going to embezzle the money out of his foundation to buy another villa. Bill Gates doesn't fucking care about a hundreth villa. He's really working on the projects, and he's deploying the money in a way that promises results - that's exactly what I want to happen. I am happy. And the PR? Let the guy have his fame, he's really worked for it.