Today I actually wanted to go a little bit off topic and I wanted to talk about there was an article in CNN recently that was saying that we should be a little bit more skeptical of billionaires who are giving away their fortune. They go into the fact that billionaire wealth has not actually decreased, which you would assume since they’re giving away their fortunes in this time period in the past ten years when they’ve had this thing called the Giving Pledge, which is kind of the most well known, that would be the one that Warren Buffett started. They brought a whole bunch of multimillionaires, billionaires into that. In fact, those people are now more wealthy, by and large, than they were previously.
So the question becomes, well, what exactly good is that doing? I personally think that that’s a really good question. Right. We need to be looking at what good is that doing? In reality, what’s happening is these people are able to get around the tax rules by having charity involved. Now, is that a bad thing per say, considering that in the end all of that money will be going towards a good cause? My thing is, is you also have to understand that these people are very gifted at basically, asset protection and asset growth. In order for them to be able to have the same fire power that they do, they need to have large sums of capital around. And because the overall wealth of wealthy people is increasing, that would then mean that they need to have larger sums of those that capital around. That means then they can go and make more money in the end means that they can go and give more money away. While they’re here playing the game that means that they have the money. And so, yes, you may marginally see things get better, but it’s not like you’re seeing $150 billion of funds hitting the market all at one time. You’re not seeing things where it’s just like, okay, here’s, you know, $300 billion to go fight off this cause because these people need this capital to be able to keep growing the way that they’re growing and basically to be able to have the power to be in a position to do what they do.
And so that in essence, then can say, okay, well, yes, they are doing a good thing in the long run, but when is the long run, especially because a lot of these guys are in their eighties. Inherently, there’s not a lot of physical work to what they’re doing. Therefore, they can keep going until the day that they die literally, which could be nineties, hundreds. You know, who knows? And at that point you may start to see more capital flooding the market at a faster rate because that person is no longer using that capital. Again, then what is going to happen with the capital is the question, right? Because what I’m seeing inherently there’s a flaw with accountability. If we give people large sums of money generally, those people will figure out ways to get around having to do what they need to do so they can keep more of those large sums of money.
My ask would be that we need to do this in a way where there is accountability to the person giving away the money and how they wanted that money spent. We can obviously all create some kind of charity organization to fight off some kind of thing. That doesn’t mean that you’re:
A, going to be a good charity organization.
B, you’re not going to skirt the laws.
C, you’re not going to use lawyers to skirt the laws and many more things.
To me, that becomes a real problem, right, is when all of this capital does eventually hit the market. How can we actually make this the most well used capital instead of having 90% of it go to administrative costs? And so that’s kind of the thought of the day.
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