We all can agree Warren Buffett is one of, if not the most successful investor of all time. That accolade may continue for many generations to come, as well it should, that is, until his fortune is topped by another investor. Warren is 83 years old, seemingly in good health and will likely invest and run Berkshire Hathaway until his very last breath. He lives and breaths investing, he’s passionate about researching companies who may be his next purchase, and reading annual reports; well that’s his favorite pastime. His passion for investing has amassed him a fortune of nearly $60 billion, and he is planning on giving it all away! You see; his fortune is nothing more than a score card to him, he certainly doesn’t live the life of a typical billionaire, in fact, most would label him as a cheapskate. He lives in the same unassuming house he has for more than 30 years, buys hail damaged Cadillacs and prefers a Cherry Coke over Dom Perignone. That is not to say he doesn’t enjoy some of the trappings of the “good life”, like his private jet for example, but even this serves his business purposes. He is a genuine man, with a desire to see that his wealth makes a difference in many lives, for many generations, and that is why he has pledged to give most of his fortune to the Bill and Melinda Gates Foundation.
Why not, he can’t take his cash with him!
The Bill and Melinda Gates Foundation is without a doubt a noble cause, a global inititive with the desire to help the poorest of the poor. The Foundation’s focus is to provide the basic necessities; food, shelter, water and healthcare solutions to the most impoverished corners of the world. Leveraging the advances in science and technology as a means of saving lives is also a leading objective of the Foundation. With all these good deeds and all this wealth changing hands, it got me to thinking; is this truly the best use of their money? This is a rhetorical question, so before you call me insensitive or heartless, please let me explain:
Bill Gates is great at running a computer company, he is great at making money for shareholders. Warren Buffett is fabulous at buying companies at below market value with great potential, adequate balance sheets, exceptional management, and then maximizing its potential. These two gentleman have talent, they were given the gift of exceptional leadership and have no doubt, added to society in a very positive manner.
How have they positively impacted society again?
Creating Opportunity! Yes, they have created opportunity for more people, families, and generations than can even be calculated. By being an investor (in Buffett’s case) and a CEO (in Gate’s case) you are not only impacting those who you employ in a positive manner, but their families and the communities in which those folks reside.. The more opportunity they create by expanding their businesses the more society benefits. Take for instance Geico Insurance, one of the holdings in the Berkshire Hathaway portfolio; by providing investment capital to Geico or a change in key management and their philosophy, it can enable them to have a more profitable year. By doing this, Geico can then offer more products, hire more people, pay more bonuses or raise wages for their employees. These employees can then have more expendable income to spend and impact their local communities. Growth is perpetuated and multiplied in the community by having leaders of organizations provide the necessary tools for a company to profit. For another example please read the post I wrote about Sam Walton.
So, back to my ‘is this the best use of their money’ question:
Please don’t misunderstand me, I am a huge advocate of giving to those in need, and am frankly in awe at the generosity of both these men, they should be commended. My point is this: Often-times we demonize a successful businessman, we often view them as tyrants who built their wealth on the backs of the hourly workers, and take all the credit. This is a simplistic viewpoint, what we don’t see are the sacrifices and commitment; the missed ball games with their children, the failed marriages, the 12-14 hour work days at the office and a few more at home. A successful businessman is often an asset to the community, we should recognize this. In fact, a lack of these businesses and businessman will equal far less opportunities to this nation as a whole.