by Tom Taulli | June 29, 2012 8:00 am
How much money does a person need to be happy?
According to a study by Princeton University researchers Angus Deaton and Daniel Kahneman, the ideal number is just $75,000.
Yet when it comes to hedge fund managers and CEOs, it seems as though there’s no limit to the wealth they crave — the more, the better. Is this insatiable hunger for more a terrible urge or is it good for society?
Given the U.S.’s persistently high unemployment, it can be cognitively dissonant to see so many millionaires and billionaires and what they do with their cash. Just last week, Oracle (NASDAQ:ORCL) CEO Larry Ellison spent around $500 million to $600 million for the Hawaiian island of Lanai.
The capitalist system has been the key to creating wealth across the globe. It has helped to get millions of people out of poverty in countries such as China, though it has resulted in uneven wealth distribution.
At the same time, a few wealthy hedge fund managers and CEOs have shown that they are aware of their responsibility to society. That is, a good chunk of their riches is being put to good work.
Let’s take a look some notable examples:
Einhorn has made billions for his investors, primarily by shorting companies such as Lehman Brothers. He is known for doing intensive research before making a trade.
Oh, and Einhorn is a top-notch poker player. He has paid the $1 million buy-in to play at the World Series of Poker and will give all his profits to the charity City Year.
He’s one of the world’s top hedge fund managers. Early in his career, in 1988, he created the Robin Hood Foundation.
It was — and is — not a typical charity. Jones created a new concept called venture philanthropy. This involves using free-market approaches to leveraging the impact of donations, such as setting up metrics and focusing on tough problems.
Some of the members of the Robin Hood Foundation include GE’s (NYSE:GE) Jeffrey Immelt, Goldman Sachs‘ (NYSE:GS) Lloyd Blankfein and even actress Gwyneth Paltrow.
At 28, the Facebook (NASDAQ:FB) CEO is one of the world’s youngest billionaires. But he has already been making contributions to charities. The most high-profile instance was in 2010, when Zuckerberg pledged $100 million to the Newark public school system.
No doubt, it could certainly use the support. Only about half of the student population graduates from high school.
The charity of the founder of Microsoft (NASDAQ:MSFT), the Bill & Melinda Gates Foundation, is the world’s largest private foundation, with an endowment of about $33.5 billion. As should be no surprise, its goals are ambitious: One of them is to completely eradicate polio via ubiquitous access to vaccines.
Bill Gates also has something called the “Giving Pledge,” wherein he has sought out wealthy people to commit to give away a majority of their wealth during their lifetimes or via their wills.
A few of the names who have signed on include hedge fund manager Ray Dalio; AOL (NYSE:AOL) co-founder Steve Case, oil tycoon T. Boone Pickens and yes, Mark Zuckerberg.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of the upcoming book How to Create the Next Facebook: Seeing Your Startup Through, from Idea to IPO. Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
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