How is it that Bill Gates continues to make money, and apparently at a similar rate to other tech billionaires, especially during these times, if his Microsoft shares are already sold?

Updated on : December 3, 2021 by Ben Mcdonald



How is it that Bill Gates continues to make money, and apparently at a similar rate to other tech billionaires, especially during these times, if his Microsoft shares are already sold?

Bill Gates probably lost more money than is reported as he has significant private ownership in hotels etc. But his public loss was outweighed by astronomical profits at Microsoft, where he still owns about 20 billion shares. Where Warren Buffet lost 15 billion this year.

Bill Gates' refusal to take venture capital was how he accidentally became the richest man in the world.

It is certainly true that most internet company founders now trade stocks for venture capital investments. Cash allows them to build substantial businesses before they start worrying about being profitable. Google, Facebook, and Twitter did. The downside is that when they go public to pay their investors back, the founders may not have much left. Facebook's Mark Zuckerberg was right to emerge with 28 percent, but it could have been 15 percent or even less.

After Microsoft went public,

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Bill Gates' refusal to take venture capital was how he accidentally became the richest man in the world.

It is certainly true that most internet company founders now trade stocks for venture capital investments. Cash allows them to build substantial businesses before they start worrying about being profitable. Google, Facebook, and Twitter did. The downside is that when they go public to pay their investors back, the founders may not have much left. Facebook's Mark Zuckerberg was right to emerge with 28 percent, but it could have been 15 percent or even less.

After Microsoft went public 30 years ago this month, Bill Gates still owned 45 percent of the company. If only he had kept his stake, Gates would be worth $ 193 billion today, instead of a measly $ 81 billion.

The main point is that Gates became the richest man in the world because that was not his intention. It refused to take venture capital to expand faster and tried to avoid going public even after rivals such as Lotus Development and Ashton-Tate proved it was a fast route to big piles of cash.

Of course, Microsoft was still a small company back then (turnover in 1985 was $ 140 million), and when Microsoft's stock opened at $ 21, Gates only got $ 1.6 million for the shares it had. sold. (Very sensibly, he paid his mortgage.) Even after the stock settled at $ 31.25, Gates' paper fortune was just $ 350 million, which is roughly what Twitter spent on MoPub.

Photo: Forune magazine

So the real reason Gates became absurdly rich was that the value of each Microsoft share increased by about 60,000 percent. Most of that growth was driven by the success of Windows 95 and Microsoft Office, and by the Internet-inspired dot-com bubble. It didn't last long: Microsoft was found guilty in antitrust courts and the dot-com bubble burst, though stocks are now approaching their all-time high.

Microsoft's stock price grew rapidly after the launch of Windows 95 and peaked with the dot-com bubble.

Gates is not as rich as he could be because, after the antitrust case, he began to withdraw from Microsoft. He resigned as CEO in January 2000, began working part-time in 2006, and stopped working in 2008, although he remained president until 2014. He also sold nearly all of his Microsoft shares: Gates now owns less than 3 percent and is It is no longer the largest individual shareholder. That honor goes to Steve Ballmer.

Gates had a long career as the world's richest man, from 1995 to 2007, before turning to good works. What's perhaps more surprising is that even after donating $ 28-38 billion to the charitable foundation he runs with his wife Melinda, Gates' wealth has doubled to put him back on top.

According to the Wall Street Journal, most of the credit should go to "Gates's secret money manager, Michael Larson." He has been managing the Gates estate, through Cascade Investment LLC, for more than 20 years. (See: This is the man who is making Bill Gates so rich).

It would be reasonable to assume that someone who became so absurdly rich must have been driven by a lust for money. That was never the case with Gates. In fact, he often wished he were not the richest man in the world, due to the attention and envy he attracted. After all, he's a software fanatic with modest hobbies: mainly playing bridge with Warren Buffett and reading books.

As he told the students at the University of Washington: "I can understand that the desire to have millions of dollars, there is a certain freedom, a significant freedom, that comes with that. But once you go way beyond that, I have to tell you it's the same hamburger. "

You've come across the biggest lie and it's good that you saw it :)

Sean "Diddy" Combs made $ 130 million in 2017 (last year)

The highest paid CEO made $ 103.2 million in 2017, and that was Hock Tan

Now these names are not often heard. We hear about Bill Gates, Warren Buffett, and others.

There are also many CEOs who make just $ 1 per year and those are some popular companies.

If we look at even the above situations of stars and CEOs, the pay can be different than the total pay, for example, they can make a profit if certain things happen. Paying then is a small amount of money when compared

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You've come across the biggest lie and it's good that you saw it :)

Sean "Diddy" Combs made $ 130 million in 2017 (last year)

The highest paid CEO made $ 103.2 million in 2017, and that was Hock Tan

Now these names are not often heard. We hear about Bill Gates, Warren Buffett, and others.

There are also many CEOs who make just $ 1 per year and those are some popular companies.

If we look at even the above situations of stars and CEOs, the pay can be different than the total pay, for example, they can make a profit if certain things happen. Paying then is a small amount of money compared to what things appear to be.

If you look at rich lists, most of the richest people are only rich through stocks and shares, and not in cash. In fact, if these people were to try to get their money out of selling stocks, they probably won't be worth much, as they would all run away from Microsoft stocks, which is why these people seem rich but can't access them.

Because they have some value, they can take out loans and then just pay off the loans and keep getting more loans.

Now this isn't necessarily the way it's always done, but it seems to be a route that people on the rich list probably rely on from time to time.

How is it that Bill Gates keeps getting rich?

Bill Gates isn't really that interested in money. He said, as reported by the Seattle Times: “I can understand about having millions of dollars. There's a significant freedom that comes with that, but once you get that far beyond that, I have to tell you it's the same burger. "

However, it continues to get rich for two reasons.

First, the value of its Microsoft shares has continued to rise. When Microsoft launched its IPO in 1986, Gates owned 45% of the company and it was only worth $ 350 million. With the current market capitalization of $ 860 billion, 45% would be worth $ 387 billion

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How is it that Bill Gates keeps getting rich?

Bill Gates isn't really that interested in money. He said, as reported by the Seattle Times: “I can understand about having millions of dollars. There's a significant freedom that comes with that, but once you get that far beyond that, I have to tell you it's the same burger. "

However, it continues to get rich for two reasons.

First, the value of its Microsoft shares has continued to rise. When Microsoft launched its IPO in 1986, Gates owned 45% of the company and it was only worth $ 350 million. With the current market capitalization of $ 860 billion, 45% would be worth $ 387 billion.

Second, you don't even think about it. Since 1995, he has had a personal money manager named Michael Larson. His job is to enrich Gates, and he has done it very well.

Gates has made a small amount of investment outside of that, but his main goal has been to support biotech companies.

Gates doesn't have expensive hobbies like buying sports clubs and huge yachts (like Paul Allen) or sending rockets into space (like Elon Musk and Jeff Bezos). He enjoys reading books, playing bridge with Warren Buffett, playing golf, and spending time with his family.

In fact, Gates took his children to school, which is one of the ways he spent time with them. How many billionaire CEOs have ever done that?

Gates and Buffett are worth about $ 90 billion each. Gates has given away around $ 35 billion and Buffett more than $ 46 billion.

For more on Larson, see a 1999 Fortune story: Family Finances: How Bill Gates Invests His Money Like many people, you have stocks, bonds, and a money manager. But there are differences. For one thing, your personal portfolio is the size of a large mutual fund. - March 15, 1999

Since the question was asked, Microsoft's market capitalization has increased considerably.

At the time of the question, the author was talking about a $ 250 billion market capitalization for Microsoft.

Today, October 11, 2020, Microsoft's market capitalization is $ 1.63 billion:

This shows how Satya Nadella has made good decisions since she was appointed CEO of Microsoft.

By reorienting Microsoft towards the cloud and open source, Satya Nadella has shown that he is a much better CEO so far than Steve Ballmer.

Despite Microsoft's exploding market capitalization since 2017, Bill Gates's fortune hasn't skyrocketed as much, currently

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Since the question was asked, Microsoft's market capitalization has increased considerably.

At the time of the question, the author was talking about a $ 250 billion market capitalization for Microsoft.

Today, October 11, 2020, Microsoft's market capitalization is $ 1.63 billion:

This shows how Satya Nadella has made good decisions since she was appointed CEO of Microsoft.

By reorienting Microsoft towards the cloud and open source, Satya Nadella has shown that he is a much better CEO so far than Steve Ballmer.

Despite Microsoft's exploding market capitalization since 2017, Bill Gates' fortune hasn't skyrocketed as much, currently stands at $ 117 billion.

That's a lot of money, but it's not commensurate with Microsoft's success in the stock market.

The reason is simple: Microsoft shares are a minority in Bill Gates' portfolio.

In Bill Gates' portfolio, Berkshire Hathaway shares of his friend Warren Buffett's Berkshire Hathaway account for almost half.

His other large stock companies include Walmart, Caterpillar, Waste Management, and Canadian National Railway.

In fact, Bill Gates' fortune is no longer tied to Microsoft's progress in the stock market. It has been a long time since Bill Gates made the decision to achieve this decoupling through diversification on the advice of his friend Warren Buffett.

At the moment, this election has always been a success for him.

Many years ago when I was young, I attended a presentation at a local university by an older and wiser gentleman who was a successful educator, businessman, and member of the county redevelopment committee. He told me two things, which I have never forgotten. One was that success is being built on the path of progress. I have never forgotten that.

Bill Gates did exactly that. He saw that the personal computer was the way to tomorrow. As a young teenager, I was also fascinated by the first computers available to hobbyists, namely the Altair 8800. Early computing was also his passion. It had to be because there

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Many years ago when I was young, I attended a presentation at a local university by an older and wiser gentleman who was a successful educator, businessman, and member of the county redevelopment committee. He told me two things, which I have never forgotten. One was that success is being built on the path of progress. I have never forgotten that.

Bill Gates did exactly that. He saw that the personal computer was the way to tomorrow. As a young teenager, I was also fascinated by the first computers available to hobbyists, namely the Altair 8800. Early computing was also his passion. It had to be because there was no packaged software that would run on a standard OC. He had the vision and was lucky enough to be in a place to build his business right in the middle of the road that would become the personal computer revolution.

You can also think about it when the country was young and crossed by two-lane roads and horse trails. Small towns appeared anywhere and everywhere based on a number of factors. There was no logical reason other than perhaps a location near a river or body of water.

Years later, Eisenhower created the interstate system, and these great highways were built strategically across the nation. Big cities grew even more if they were on the interstate or at a junction of two or more. Those that were located very close to the interstate prospered, and the small towns that did not slowly wither away.

Disney's Cars movie exemplifies this perfectly. Radiator Springs was a nice hill town that was surrounded by the great interstate highway. She became a small time capsule as the entire world left her behind.

Simple. Bill was an initial shareholder, he basically bought it for nothing. Ballmer came in much later and had to pay a higher price per share.

Bill Gates has been very good at financing startups and research companies.

He realizes that even Larry Ellison owns stocks other than Oracle, Michael Dell owns stocks other than Dell, and Bill Gates owns more stocks than just Microsoft.

Another question that keeps coming up is why Steve Jobs was so much richer than Steve Wozniak, since they had the same number of shares. Well, at one point Steve Jobs sold all of his shares in Apple except one share. Few decade

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Simple. Bill was an initial shareholder, he basically bought it for nothing. Ballmer came in much later and had to pay a higher price per share.

Bill Gates has been very good at financing startups and research companies.

He realizes that even Larry Ellison owns stocks other than Oracle, Michael Dell owns stocks other than Dell, and Bill Gates owns more stocks than just Microsoft.

Another question that keeps coming up is why Steve Jobs was so much richer than Steve Wozniak, since they had the same number of shares. Well, at one point Steve Jobs sold all of his shares in Apple except one share. A few decades later, it did it again, both times selling when stocks were low.

Smart people invest in many companies. These men are also asked to invest a long time before the companies go public.

Andy Bechtolsheim invested in Google and became a huge stock owner, just giving the Google guys some scsi drives, some hard drives. Anyone could have funded this, but Andy was only asked who he is. He's one of the four founders of SUN if that needs an explanation.

Yes.

In the immediate aftermath of Microsoft's IPO, Gates owned 44.8% of Microsoft. 1

This morning (July 25, 2018), Microsoft's market capitalization was just under $ 850 billion.

If my calculations are correct, his net worth at Microsoft would have been around $ 380 billion (more or less), if he had never sold a single share.

Forbes estimates his current net worth at around $ 93 billion 2. Poor guy. It seems you made the wrong decision. ;)

Footnotes

1 http://www.lannigan.org/pdf/Microsoft_prospectus.pdf2 Bill Gates

When Microsoft went public, Bill began selling his shares. Larson became his money manager. Larson used Microsoft's money to buy funds, bonds, and stocks elsewhere. Bill Gates invests in tech startups while Larson handles the other types of investments. Then the money went from

Microsoft to Cascade (the investment firm)

to companies, funds, bonds, etc. and finally

to fund the Bill & Melinda Gates Foundation as dividend sales or other source of income.

I think Gates has finished selling his shares by now. Revenues through Cascade continue to grow.

Gates also invests through Br

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When Microsoft went public, Bill began selling his shares. Larson became his money manager. Larson used Microsoft's money to buy funds, bonds, and stocks elsewhere. Bill Gates invests in tech startups while Larson handles the other types of investments. Then the money went from

Microsoft to Cascade (the investment firm)

to companies, funds, bonds, etc. and finally

to fund the Bill & Melinda Gates Foundation as dividend sales or other source of income.

I think Gates has finished selling his shares by now. Revenues through Cascade continue to grow.

Gates also invests through Breakthrough Ventures, which is a fund of the richest people in the world to tackle the problems of climate change.

So to answer in a simpler way. Your income does not come with salary. You get your income from various sources

While Bill Gates may only own 2 percent of Microsoft as of now, his initial wealth came from Microsoft shares that have now been sold to diversify his holdings. When Microsoft went to iPo'd Inn 1986, Bill Gates owned almost half of the company.

What has happened since then?

You have donated significant stock to your charity, as there are significant tax benefits to donating appreciated stock in lieu of cash.

He sold a significant portion of his shares and used this money to diversify his portfolio through his investment vehicle Cascade Holdings.

new shares have been issued that have diluted

Keep reading

While Bill Gates may only own 2 percent of Microsoft as of now, his initial wealth came from Microsoft shares that have now been sold to diversify his holdings. When Microsoft went to iPo'd Inn 1986, Bill Gates owned almost half of the company.

What has happened since then?

You have donated significant stock to your charity, as there are significant tax benefits to donating appreciated stock in lieu of cash.

He sold a significant portion of his shares and used this money to diversify his portfolio through his investment vehicle Cascade Holdings.

new shares have been issued that have diluted their holding.

Unknown. Larson is a master of personal secrecy. The investments you make for the Gates Foundation are easily found and I've included them below. If you're only charging a 0.1% fee to manage the $ 80 billion it's believed to be managing, do the math. It should also be noted that Larson has approximately 100 employees who must sign confidentiality documents upon hire.

Bill Gates Trust Has Over 80% Of His Capital In These 5 Stocks (No, Microsoft Isn't One) - The Motley Fool

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