Octogenarians, nonagenarians and centenarians account for nearly 2 percent of global population and are the most rapidly growing age group. It’s an age group that most of us enter by default rather than by choice, but it can be a productive time of life.
Just take US-based trio who may be the world’s most famous billionaires: Warren Buffett, Rupert Murdoch and George Soros. All have made headlines this year for doing what they do best: making money and being fully engaged with major economic, financial and political developments. They have a lot in common besides their years: all three are phenomenally wealthy, hold strong political views, enjoy considerable attention and influence, and have tangled family lives.
All three are self-made men. According to the Forbes list of the richest Americans, as of March 2011 Warren Buffett had a net worth of US$50 billion (second on the list), George Soros $14.5 billion and Rupert Murdoch only $7.6 billion.
Warren Buffett, a native of Omaha, Nebraska, buys companies either outright or piecemeal through purchases of large blocks of shares. He now owns more than 70 companies as part of his listed conglomerate, Berkshire Hathaway. Its shares opened at US$104,000 on the morning of August 22, although the price had been as high as $150,000 in December 2007 and remains one of the most expensive around.
Australian-born Rupert Murdoch inherited a newspaper from his father and expanded it into a major multinational called News Corp which owns media companies and newspapers from the now defunct tabloid News of the World in the United Kingdom to the prestigious Wall Street Journal.
George Soros, a Hungarian refugee, was one of the first investors to start a hedge fund — which is currently worth about $25 billion despite market turmoil. He is also noted for starting the Open Society Institute which runs a number of foundations to influence global politics and more recently the “Institute for New Economic Thinking.”
All three have received varying degrees of media coverage recently either because of their activities or for the ideas they espoused.
Warren Buffett is a favourite of the New York Times. In a recent op-ed, “Stop Coddling the Super-Rich”, Buffett begged Congress to please, please, raise his taxes. On his last tax returns he paid a lower tax rate (17.4%) than his average employee (36%). What he did not make explicit was that billionaires make most of their money from investments which are taxed at 15%, while his employees earned mostly wages which are taxed at a higher rate.
Buffett did not indicate how much his taxes ought to be. However, the Financial Times offered some advice. It pointed out that Buffett’s declared income of $40 million was rather small for someone with net wealth of $50 billion, so the FT suggested a modest wealth tax of 2% which implies a tax payment of $1 billion or 25 times what he paid last year.
In an interview with talk-show host Charlie Rose, Buffett reiterated much of what was in his Times article but he did make an admission which surprised no one: “Yeah, I like being rich.” Mr. Rose went on to point out that Buffett had written that those who should be taxed at higher rates were individuals earning at least $1 million, thus indicating a disagreement with President Obama’s $250,000 threshold. Mr. Rose asked him if he had other differences but Buffett responded that he was “in synch” with President Obama, especially on “social matters” such as “a woman’s right to choose.”
A year ago Buffett came up with a “Giving Pledge”. He and Microsoft founder Bill Gates urged the wealthiest people to donate at least half of their fortune to charity either during their lifetime or in their wills. To set an example, Buffett had already decided to donate $30 billion to the Bill and Melinda Gates Foundation in annual installments. Teaming up with Bill Gates, the Giving Pledge group recently held its first annual meeting, celebrating the fact that 69 “pledgers” had already signed on. Buffett has actually indicated he would give away 99 percent of his wealth — but with a net worth of $50 billion such generosity would still leave him or his heirs with $500 million.
While philanthropy is admirable, the causes for which donations are sometimes made are not always noble. Both Buffett and Gates are promoters of family planning, abortion choice and other population control programs. The Gates Foundation received the UN Population Fund’s Annual Population Award in 2010.
Because of his vast wealth and philanthropy, Buffett is a market icon who has been dubbed the “Sage of Omaha”. But wealth is not wisdom. A recent dubious statement was Buffett’s reaction to the downgrade of US Treasury debt by Standard and Poor’s to AA+ saying that US credit should be considered AAAA. The remark came right after the arduous and acrimonious negotiations to raise the US debt ceiling and the presidential appointment of a super commission to find long-range spending reductions.
Rupert Murdoch, the least wealthy of the trio, is currently being slowly roasted over the phone hacking scandal at the News of the World. But he has had an extraordinary business career. Starting with a small Australian newspaper inherited from his father, Murdoch slowly expanded his newspaper holdings and founded a national paper in his homeland. Desirous of investing in television and other media he acquired American citizenship so that he could own television stations in the United States. His Fox News Channel is conservative in the American sense and is often a bulls-eye for liberal (in the American sense) media. Nonetheless, Murdoch was a strong supporter of Hillary Clinton for both her senatorial and presidential aspirations.
Today Murdoch reportedly owns 175 newspapers (including the Wall Street Journal) and countless television stations, cable and satellite networks, film studios, magazines, publishing companies, and several online properties.
Unlike Buffett, Murdoch has been accused of placing his wealth in tax havens to avoid taxes. He is not known for vast money givaways, nor has he taken the “Giving Pledge” — although his 102-year-old mother is highly regarded as a philanthropist in Australia.
George Soros is not fondly remembered for making around $1 billion in speculation on the devaluation of the British pound in September 1992. As a hedge fund founder, he used this relatively new and not so regulated vehicle to build his fortune. His Open Society Foundations which originally supported democratic political movements that emerged in Eastern Europe after the fall of communism today are present in more than 70 countries providing grants that support human rights, public health and education. Soros has supported a wide range of views, including some troubling movements such as lobbying for the Oregon Death with Dignity Act.
Soros knows how to work the system. His lobbying efforts secured secrecy for an investment vehicle known as the “family office” which does not have to register with the Securities and Exchange Commission and disclose participants’ names and investments. Thus Soros was able to convert his nearly $25 billion Quantum hedge fund into a family office by simply returning about a billion or so dollars to outside investors and continue investing funds belonging to him and his relatives in complete secrecy.
Like Buffett and Murdoch, Soros is also an opinion-maker. He has penned several books ranging from his autobiography to investment advice. He speaks out frequently on major international financial and economic issues, especially in Europe.
All three octogenarians also have had difficult personal lives.
Warren Buffett, a father of three, has been twice married. He lived apart from his first wife between 1977 and her death in 2004. He married his long-time companion, introduced to him by his wife, five years ago.
Rupert Murdoch, father of six, has been divorced twice. He met his third wife, Wendy Deng, in Hong Kong. Nowadays she is leading her husband’s Chinese media investments.
George Soros has been divorced twice and has five children. His private life hit the headlines earlier this month when a former “girlfriend” more than half a century younger sued him for reneging on promises to purchase her a pricey New York apartment.
American novelist F. Scott Fitzgerald idealised the millionaires of the Roaring Twenties. “The rich are different than you and me,” he is reputed to have told Ernest Hemingway. And with great good sense, Hemingway retorted: “Yes, they have more money.” So if anything can be learned from the careers of these octogenarian billionaires, it is that old age can be every bit as productive (and morally fraught) as youth. Perhaps being an octogenarian is something we should all look forward to!
Vincenzina Santoro is an international economist and represents the American Family Association of New York at the United Nations.