Did you know that the richest man in the world according to Forbes is Bill Gates? If you by happen chance do not know who he is, Bill Gates is the founder of Microsoft Inc. He basically has about 78 billion dollars as of July 2014. Half of that money is in Microsoft shares, and the kicker is he has been retired from Microsoft since 2008. (Since then he has been on the board) Now why in the heck is somebody who is retired still the reigning champ of wealth? Maybe it is the 6% in ownership of the total Microsoft Stock or maybe he has millions coming in from the books he authored. I decided to write this because I am confused as to how someone who doesn’t make a salary is still worth more than Buffett or Carlos Slim, which both are still employed in their respective companies? If you can solve this puzzle then you maybe can succeed to grow wealth and never lose it in retirement.
I believe one of his secrets is he doesn’t sell off assets that are constantly giving him an income stream. (Buy and Hold People) Those shares are compounding millions of new shares every year. Many folks leave traditional jobs
in retirement and begin to immediately take 4% of their portfolios assets to live on. How about you grow the wealth to a level where you don’t have to take the 4% in principal every year. Now that is considered the financial pinnacle of pinnacles. Living off the income and never touch the principal, and it still as the ability to grow and provide you a financial buffer. (Now that’s a dream retirement plan)
Let’s put the numbers in smaller amounts to help you understand what I am talking about. Let’s say your total expenses are 10 thousand dollars a year and you make 22 grand a year off your investments. How do you make 22K a year, well you saved and bought Microsoft stock all throughout your life? When you retired you have a nest egg the size of 800K and it’s all invested in MSFT (20,000 Shares). Those shares will give you a yearly dividend of about 22 thousand dollars. (Never invest all your money in 1 stock) Mind you this is an example, but because you invested you now have successfully managed to have a surplus of about 12 thousand dollars per year. If you reinvest half of the 12 thousand, you are building new shares and this is exactly what Bill Gates is doing. The other half can now go to fun experiences like travel and wants. This is my plan for the future except I will probably own about 20 different companies. I am shooting for about 1.2 million dollars and if done right it will provide me an annual income of about 40 thousand dollars. This yearly amount might seem low to many people, but I plan on being mortgage / consumer debt free long before retirement, so this amount will allow me to live life my way.
After doing more research Bill Gates has more than half his wealth invested outside of Microsoft stock in a company called Cascade Investments. He owns a stake in many companies stock including the Four Seasons Hotel, John Deere, Coca Cola, Ecolab, etc. This is another great argument why he is still on top of the wealth pyramid, he diversified away his money into assets that are totally unrelated and can provide value in the end. In conclusion Bill Gates is the richest man, and I’m actually happy for him because he is far from greedy. He gives millions away every year through his foundations, and he vowed to give away 99% of all his net worth to charitable causes. (Very Commendable Vow)
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Comment on The Richest Man in the World?
Rich Uncle EL
He's definitely done well for himself!
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I love Bill Gates. He also donates a large percentage of his money to charity-which anyone can respect.
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Yes he does and thanks for the comment.