Donald Trump’s net worth was an estimated $3.1 billion in 2018. According to the United Nations and International Monetary Fund, that’s more than the annual GDP of at least two-dozen countries. OK, these are tiny countries like Belize, Granada and the Seychelles. But $3.1 billion is still a huge chunk of change.
It’s easy to criticize the world’s super-rich. Tax laws, it seems, were tailor-made for them. And the Economic Policy Institute says the wealth gap in the United States keeps getting wider.
That isn’t cool. But at the same time, it might now be chic for the rich to give money away. Each year, for example, Warren Buffett donates more money than Donald Trump’s net worth. According to Reuters, Buffett gave away $3.6 billion in 2018. Since 2006, he has donated a staggering $35.5 billion to charity.
Buffett and Bill Gates created The Giving Pledge in 2010. They wanted to encourage the world’s billionaires to give at least 50 percent of their wealth to charities. Neither of them plans to leave crazy-money to their kids. Warren Buffett, for example, says he’s going to leave $3 million to each of his children. Bill Gates says his three kids will get $10 million each. These are paltry sums, compared to Buffett and Gates’ wealth: $88.3 billion and $97 billion respectively.
Instead of keeping money in their families, they want to use it to make the world a better place. Just as interesting, this appears to be catching on.
So far, 204 wealthy people from 23 countries have pledged to donate much of their fortunes to charity. Billionaire Sylvan Adams says it’s becoming a brilliant form of Type A peer pressure: “I would call it ‘competitive’ philanthropy,” he says. “The Giving Pledge is encouraging us to outdo one another in giving our wealth away.” He and his wife established the Margaret and Sylvan Adams Family Foundation. It supports several projects, including educational and medical projects in Israel and Canada. It also offers doctoral scholarships at the Israel Academy of Sciences and Humanities.
However, the Chronicle of Philanthropy says pledges are just promises, and promises can be broken. In an interview with The New York Times, Melinda Gates said plenty of people join The Giving Pledge because it makes them look good. But it’s easy to criticize because itdoesn’t hold people accountable for their promises.
In 2010, the net worth of the richest 1 percent of Americans was equal to 29 percent of all household wealth. By 2018, that number had grown to 31 percent. So, despite Buffett and Gates’ efforts to encourage billionaires to donate huge sums to charity (which would reduce rich people’s wealth), the wealth gap keeps growing.
But perhaps we should feel sorry for the rich with the tightest wallets. The Easterlin Paradox revealed that personal happiness doesn’t increase beyond a specific level of annual income. That means these billionaires might not be as happy as we (or even they) might think.
Andrew T. Jebb is a doctoral student at Purdue University. He’s the lead author of the study, “Happiness, Income Satiation and Turning Points Around the World.” His research team confirmed that in North America, the highest levels of day-to-day happiness peak at annual incomes of about $105,000.
So, if we listen to The Beatles, it appears that money can’t buy you love…or happiness. However, University of British Columbia professor Elizabeth Dunn and Harvard professor Michael Norton, say money can buy happiness, if we spend it the right way.
Their research found a direct correlation between giving and overall life satisfaction. When we give money to help or empower others, we often feel far happier than if we had spent that money on ourselves. That might be why Buffett and Gates appear to smile a lot… and some other famous billionaires appear to scowl instead.
Andrew Hallam is a Digital Nomad. He’s the author of the bestseller Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas