Apr 7, 2019

Too much money

If you spend $450 million on this and then lose it, that's a sign you might have too much money. Photo: Christies

Saudi Aramco, the world's most profitable company, revealed this week that it had $224 billion of pre-tax earnings in 2018.

Details: Some of those earnings were paid to the Saudi royal family in taxes, while $111 billion was retained as profit for Aramco's sole shareholder, which is also the Saudi royal family. That kind of wealth helps to explain why Goldman Sachs CEO David Solomon found himself back in the kingdom this week, less than 6 months after he joined the rest of the world in publicly avoiding the country.

Jeff Bezos, the world's richest man, revealed this week that he would retain the lion's share of his marital property after his divorce from his wife MacKenzie. She is giving up any ownership stake in Blue Origin or the Washington Post, and she's retaining only 25% of their jointly owned shares in Amazon. Still, that 25% is enough to make her the world's fourth-richest woman.

  • MacKenzie Bezos is so rich — her net worth is $36 billion — that doubling her wealth might well have zero utility for her. In fact, it's entirely possible that the second $36 billion would have negative utility — so much so that, given the choice, she'd prefer $36 billion to $72 billion.
  • Abigail Disney, another extremely rich person, told The Cut that "I could be a billionaire if I wanted to be a billionaire, and I’m not because I don’t want to be a billionaire. That’s an insane amount of money."
  • Extremely rich people worry about leaving their kids too much money, and they often go to great lengths to avoid doing so. The more self-aware among them realize that if a certain amount is too much for their kids, it might well be too much for themselves. On some level, part of the utility of philanthropy is often that it is simply an easy and effective way of reducing one's net worth.

My thought bubble: For nearly all of us (Jeff Bezos would seem to be one exception to the rule), there is some level of wealth at which having more money would not make us better off in any meaningful way. Almost none of us ever become that rich. But for the very, very rich, there's real value in being able to identify that amount and take the actions necessary not to exceed it.

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