Warren Buffet to Give Away 85% of Fortune

The Money / CNN link is here.

So MUCH money! The world's second richest man, worth $44 Billion. And it's going to sit in the coffers of some charity organization... with probably 50% of it fettered away in administration / corruption. (Actually, I hope that the B&M Gates Foundation is run better than most charities.)

If only we could get some of that for longevity research...! What's Warren doing!?? Think about the advances that could be put forward if he invested all of that in various areas (Singularity research, cryonics, biomodification, whatever).

I lost a lot of respect for Buffet when he came down in favor of the death tax and made outlandish statements about how no one should be allowed to pass their wealth on to their family. Easy for this hypocrite to speak about other people's money when he has nothing to worry about - being the world's second richest man. GRRRRRR!!! All he has been talking about in the last few years is how the government should be raising taxes. Again something that really doesn't affect him now that he is old and filthy rich. AARRGG! Anyway, some of his money may make it into medical fields. The Gates foundation has given a lot of money to fight diseases. Props for that.

Woah, glorious! I think the cash is in very good hands with the Gates foundation. Even those envious of the donation should be glad that a trend is being set towards massive billionaire philantropy. Our time is not there yet. Keep pushing, and it will come.

I lost a lot of respect for Buffet when he came down in favor of the death tax and made outlandish statements about how no one should be allowed to pass their wealth on to their family.

Inheritance of wealth is one of those weird topics to discuss. On the one hand, we don't have much of a problem with people inheriting eye color, hair color, skin color, muscle tone and strength, athletic skills, intelligence and other brain skills, endurance, pain threshold, violence, aggressiveness, compassion, etc... A few of these we'd like to prevent, like violence, but for the most part, we don't consider it terribly unfair that we're not all "created equal", at least not exactly.

It's kind of a strange aspect of the American psyche. On the one hand, Americans want to believe that we're created equal, that have the same basic tools, even if there are differences in the details. If you study hard enough, anyone can go to college and succeed. If you work hard enough, anyone can become a millionaire, or even a billionaire. You just have to work hard and believe, etc., etc.

It's all a crock a shit.

Anyway, somehow, we think it's unfair that people inherit great advantages, because then they're no longer equal. A child born to a poor family does NOT have an equal chance to riches and college as someone born to a rich family. Americans think people should "earn" their way in life, and it seems like people who inherit wealth, even just moderate wealth, have an unfair head start. They didn't have to earn that advantage in life, they just got it by chance, and that's "unfair".

If I thought life should be fair, that people should "earn" their way, that there was a God and he was no respector of persons, then I'd agree with those people. But life isn't fair, and I don't believe in a God (no matter how much I'm programmed to, and believe me, it's a difficult struggle not to fall back to old habits), and I while I think people need to "earn" quite a bit in this life, I don't think they need to earn everything... I'm not against inheritance. But I sympathize with those who are.

It's easy to preach against inheritance from the bottom of the wealth food chain. I admire a man that can preach against it from the top.

Anyway, random thoughts, which I won't bother to proofread or try to make make sense.

Edit: okay, I had to make one edit: "poor" => "rich". It didn't make sense otherwise.

It's good to see the money is going to be put to use.

It's kind of a strange aspect of the American psyche. On the one hand, Americans want to believe that we're created equal, that have the same basic tools, even if there are differences in the details. If you study hard enough, anyone can go to college and succeed. If you work hard enough, anyone can become a millionaire, or even a billionaire. You just have to work hard and believe, etc., etc.

It's all a crock a shit.

This reminds me of Kurt Vonnegut's short story, Harrison Bergeron. It's worth a read if you've never come across it before. The idea being that that everyone is handicapped down to the level of the least-common-denominator in the name of egalilatrianism.

I think a lot of the support for the "death tax" is uniquely American. It's a backlash against the sustained aristocracy of the European nations. At one time, it may have even been a moderately good idea -- preventing the wealth of the few to stifle the free market environment.

In today's world, though, it's hardly necessary. Even the richest man on earth (Bill Gates) has an accumulated wealth (~$50 Billion) that only equals 4.4% of the US's annual GDP ($1,114 Billion in 2005). That's an amazing figure! Even if he spent every penny he had, he could barely make a dent in the economy (and that's just the United States). I would suspect that at one point in time, some of the wealther families controlled sums far more vast than a single countries GDP.

I'm personally against it for two reasons:

1. Ethically, the government already steals ~50% of your income throughout your life. Being generous, they probably only return about 5% of that to you in useful services. That's already incredible theft! Can it possibly be ethical to tax everything ANOTHER 50% upon your death?

2. Practically, the children / estate of those taxed are more likely to make good use of the money than the government. Business acumen might not be an inheritable trait, but you often find that the children of those who have earned wealth are pretty good money managers (publicity hounds like the Hiltons excluded). Does taking 50% of someone's company away and handing the shares to the government give a net societal benefit? I would imagine that the costs to graft and corruption are much higher than the inheritors propensity to waste money at Tiffanys.

I'm reminded of the books "Mars" series by Kim Stanley Robinson, especially Green Mars. There was a lot of emphasis on doing what's best for the planet, for society, etc., and the Martian underground (forget their group's name in the book, it's been a couple years) was very big about preventing the transfer of wealth to one's offspring. It sounded like a bunch of hippie rubbish. Not that I'm against all things hippie: I rather liked the movement (well, historically, I was born in '77!), but there were still some aspects about it that don't really seem well suited to the "real world".

There are truly few in the usa who desire amelioration for the aging condition.

It's all a crock a shit.

Jay that's what all poor people say. Boo hoo.

I have those books somewhere Jay They were very good ones and I think in the cover they had a thing about the artemis mines project. atleast in mine.





And Hank being poor sucks I know my mom had to sell plasma once to feed me and my brother. Life sucked till my middle class grandparents took us in. No tv, no radio and no ac , Just hardy boy books and a bicycle that really sucked but was cool cause least I had one.

It isn't a level competition when it comes down to it, But its also a foot up to be lucky enough to be born in the U.S. and not Mexico.
Im very grateful to be a middleclass american. My father used to say "poor people have poor ways" and waht he meant is they adaptto afford the circumstances. I still use those tips to save money. Garage sale shopping, thrift stores, Ebay, growing my own veggies etc.



Now i my job I see thepoorest of the poor. Ive seen better homes in ethiopia. One particular one that comes to mind is in Waynesboro MS. Its a 1975 ish model Mobile home. The metal skin has come away to reveal the wood beneath in huge gashes on the sides. Its painted pink. It has that stick down tile in the floor that has came up and is stuck atop each other in random patches. You can see holes in the roof. and see outside thru holes in the walls. the floor is uneven due to rufshod patching and the trailer rocks cause its uneven . four kids a mom and a boyfriend stay there. Do those kids have the same chance as some rich snob?


Btw the woman drives a brand new Ford Expedition:)

Edited by rjws, 27 June 2006 - 02:15 AM.

Now  i my job I see thepoorest of the poor. Ive seen better homes in ethiopia. One particular one that comes to mind is in Waynesboro MS. Its a 1975 ish model Mobile home. The metal skin has come away to reveal the wood beneath in huge gashes on the sides. Its painted pink. It has that stick down tile in the floor that has came up and is stuck atop each other in random patches. You can see holes in the roof. and see outside thru holes in the walls. the floor is uneven due to rufshod patching and the trailer rocks cause its uneven . four kids a mom and a boyfriend stay there. Do those kids have the same chance as some rich snob?

Kids make you poor.

I was border-line impoverished in college, but I still found that I could support myself pretty well throughout the school year just by working during the summer! My parents never paid for anything. And I thought I had a great life! Decent shared apartment, a computer with an internet connection, a beater car to take me on trips to the mountains -- what more can you want? And I could survive for a year in a college town with all kinds of fun activities on a single summer of work!

Of course, I went to college in the rural South. Kids and location preference. That's what makes you poor. We just need to sterilize people at birth... and leave them that way until they can afford to have it undone.

maybe Windows Vista will now be named "Windows Buffet"

It's all a crock a shit.



Jay that's what all poor people say. Boo hoo.

Imagine if you had to race your car all the time and win races to make enough money to eat food. Rich kids are born with Ferraris and Porsches. Poor kids are born with Civics and Pintos.

Yeah, boo hoo. Anybody can win a race with any car, it's all about the racer, right? Stop whining and learn how to drive.

Like I said, crock of shit.

I think Jay's points are on the mark. It's funny how emotional and inflammatory discussions about wealth can be, it would be way more uncomfortable if we had to talk about this in person and didn't have the impersonal text format to cool it all down.

Imagine if you had to race your car all the time and win races to make enough money to eat food. Rich kids are born with Ferraris and Porsches. Poor kids are born with Civics and Pintos.

My first car was a 1980 Ford Pinto station wagon, baby blue w/ random rust and primer spots, 200k miles, backfired every couple minutes. The muffler fell off pulling into a girl's driveway when I went to pick her up for a first date. I crashed the pinto into a telephone pole while racing for food and totalled it (actually I was DWI and fell asleep at the wheel).

ahh, poor kid memories...

Cool, so I'm not the only one who's crashed into a telephone poll! Totalled a Mazda 626 LX-V6. Nice cheap car, $15k brand new, 4-door, 2.5 liter engine with 170 HP at nearly 7k RPMs, stickshift... Now that was a fun little car... Even crashing was sort of fun... Well, in hindsight; it sucked at the time.

It's funny how emotional and inflammatory discussions about wealth can be, it would be way more uncomfortable if we had to talk about this in person and didn't have the impersonal text format to cool it all down. 

Reminds me of an article I read recently on inflation:

"Inflation is that moment when as a result of government action the distinction between real money and fake money begins to dissolve. That is why inflation has such a corrosive effect on society. Money is one of the primary measures of value in any society, perhaps the primary one, the principal repository of value. As such, money is a central source of stability, continuity, and coherence in any community. Hence to tamper with the basic money supply is to tamper with a community's sense of value. By making money worthless, inflation threatens to undermine and dissolve all sense of value in a society." --Paul Cantor, "Hyperinflation and Hyperreality"

Money is a flexible medium of exchange used to... quantify value! That's why these discussions become so emotional. We often forget what money represents.

I totalled a used car by running into a cow. It was very funny and not my fault.

I was poor growing up. My family had material wealth by owning animals and land, but not monetary wealth. It is "what you do with what you got" that makes the difference. Even though we didn't have a lot of money, we were well fed because we grew most of our own food. All of us kids contributed.

The most I ever paid for a vehicle was 1,400 dollars until 2002 when my wife forced me to buy a shiny new Kia for 12,000. Most of the cars I have driven in my life were junkers, by choice. The last one I bought was only 700 and it has been running good for 8 months now. I like to spend my money on other things like Imminst and recreation. I have saved enough money that now I am earning noticeable interest. You know the old saying, "you have to have money to earn money", I am getting there. It was all through my own hard work. My parents were not rich. My wife is not rich. I work, I save, and my net worth is increasing year over year. It is not a crock of shit.

I railed against Buffets recent political proclamations about more taxes on everyone, but I do give him props for giving a lot of his wealth to a foundation that invests a lot in health care. I think it would be better spent on libertarian/free market education for everyone....but that is just me. [thumb]

It is not a crock of shit.

I guess for you, the crock's half empty.

A person with a net worth of $5 can easily bring themselves up to a net worth of $1 million, given several years, a lot of very hard work, and above average intelligence.

A person with a $1,000,005 net worth can easily bring themselves up to a net worth of $2 million, given several years. No hard work or intelligence required, above that necessary to invest in relatively safe investments.

Yes, a person can raise his station in life, and I'm not saying it isn't possible. In relative terms, a poor person has the greatest advantage, because I'd like to see a billionaire increase his wealth a million fold in a decade. Ain't gonna happen.

But in absolute terms, the rich person has a huge advantage. For me, the crock's half full.

But in absolute terms, the rich person has a huge advantage. For me, the crock's half full.

I don't agree. The more money you have the more you have to worry about. People who win the lottery don't seem to keep their friends unless those friends share the wealth, I get the impression. (I have never won the lottery myself but it seems like a lot of people end up worse off after winning lots of money like the lottery.)

What I don't understand is that Buffet did say it was against leaving so much money to his kids. He seemed to express what a bad thing that can be for people to grow up with a shit load of money waiting for them to turn 18 years old. I thought the reports were saying each of his kids is getting $1 billion. (I think he has two kids but not absolutely sure.)

I mean they are only getting a small slice of the total pie but that is still a huge chunck of money. I was surprised, I guess, that he is leaving so much to his kids. What does someone do with $1 billion? Grow old and give it to some foundation when you get to be Buffet's age.

The whole thing is that Gates and Buffet end up with the most toys in the end but really more than they can actually enjoy themselves; so what is the point of driving yourself to work so hard if you really have to give a large part of it away. The get that nice fuzzy warm feeling for their charitible contributions.

I happen to think that people who have it easy never really get to test themselves and see exactly what they are capable of. I have been financially strapped and come out of that feeling more confident to handle things as a result. It can be gratifiying to survive on a meager existence. It makes you a stronger person, I think.

There is nothing rewarding about having every opportunity practically handed to you. How can you know what you are capable if you had all this luck and opportunity available to you. How can you tell what you are made of if you have never had to go out and survive both physically and MENTALLY with so little. I think the real lesson from learning to live with what little you have is the mental strength you get from that. Rich people don't have that "role up your sleves and get in the trenches" attitude to take on any challenge because they have never had to tough it out themselves, really tough it out. People go to extreme measures to climb mountains just to test their mettle. Well, being broke sometimes can make you feel like you are testing your mettle too.

It is not what you have in life but how you make the most of the stuff you have. Dont bust your ass making lots of money so that you have so much you can't possibly spend it yourself and end up having to give so much money away to charities. Moderation is good even when it comes to acquiring wealth.

I'm reminded of the books "Mars" series by Kim Stanley Robinson, especially Green Mars. There was a lot of emphasis on doing what's best for the planet, for society, etc., and the Martian underground (forget their group's name in the book, it's been a couple years) was very big about preventing the transfer of wealth to one's offspring. It sounded like a bunch of hippie rubbish. Not that I'm against all things hippie: I rather liked the movement (well, historically, I was born in '77!), but there were still some aspects about it that don't really seem well suited to the "real world".

Robinson is an avowed socialist, so it is no wonder that he illogically fantasizes an end to the capitalist system in his otherwise excellent trilogy.

Now, I'm a past critic of Buffett's political opinions occasionally, though not nearly as much as I am a critic of Soros. However, he had some good logic when he stated he was always amused when his country club friends spoke about ending the welfare cycle of dependency, while they cursed their own kids with trust funds that accomplished the same thing... He once said something to the effect that the limit to inheritance should be the border between enabling your offspring to accomplish anything and the point that enables them to do nothing. Now, I'll note the rest of his wealth, in addition to what normal folk would deem significant trusts for his kids families, is left to several trusts that will be managed (professionally, no doubt) by his kids.

I'm sure we'd all look at being left in charge of a billion dollar foundation as "being left bereft"....

Given my own experience dealing with trust fund babies as business partners, I'd say the limit is to put them through college, then give them a decade to shift for themselves, to figure out what they want to do with their lives, come up with a financial plan for it, then finance their plan and hold them to it.