Money... Money... Money...

**gameboy** · 26-06-2006

Warren Buffet to give away 85% of his wealth ($37 billion) to charity. The bulk to Bill and Melinda Gates foundation!

Nothing quite like the second richest person on earth giving 85% of his wealth to the richest person on earth. Now Bill has like 90 cents of every dollar on earth under his control in one way or another?

Should you leave it all to the children?
If you do, you may not be doing them a favor. But if you want to, there are sensible ways of passing on what you have without depriving the kids of a feeling of achievement. (more)
Letters from Buffett
As part of his plan, Warren Buffett is sending letters to each of the five foundations that will be receiving his gifts. The letters may be found on Berkshire Hathaway's Web site. (See the letters)

This news was indeed stunning. Buffett, 75, has for decades said his wealth would go to philanthropy but has just as steadily indicated the handoff would be made at his death. Now he was revising the timetable.

"I know what I want to do," he said, "and it makes sense to get going." On that spring day his plan was uncertain in some of its details; today it is essentially complete. And it is typical Buffett: rational, original, breaking the mold of how extremely rich people donate money.

Buffett has pledged to gradually give 85% of his Berkshire stock to five foundations. A dominant five-sixths of the shares will go to the world's largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation, whose principals are close friends of Buffett's (a connection that began in 1991, when a mutual friend introduced Buffett and Bill Gates).

The Gateses credit Buffett, says Bill, with having "inspired" their thinking about giving money back to society. Their foundation's activities, internationally famous, are focused on world health -- fighting such diseases as malaria, HIV/AIDS, and tuberculosis -- and on improving U.S. libraries and high schools.

Up to now, the two Gateses have been the only trustees of their foundation. But as his plan gets underway, Buffett will be joining them. Bill Gates says he and his wife are "thrilled" by that and by knowing that Buffett's money will allow the foundation to "both deepen and accelerate" its work. "The generosity and trust Warren has shown," Gates adds, "is incredible." Beginning in July and continuing every year, Buffett will give a set, annually declining number of Berkshire B shares - starting with 602,500 in 2006 and then decreasing by 5% per year - to the five foundations. The gifts to the Gates foundation will be made either by Buffett or through his estate as long as at least one of the pair -- Bill, now 50, or Melinda, 41 -- is active in it.

Berkshire's price on the date of each gift will determine its dollar value. Were B shares, for example, to be $3,071 in July - that was their close on June 23 - Buffett's 2006 gift to the foundation, 500,000 shares, would be worth about $1.5 billion. With so much new money to handle, the foundation will be given two years to resize its operations. But it will then be required by the terms of Buffett's gift to annually spend the dollar amount of his contributions as well as those it is already making from its existing assets. At the moment, $1.5 billion would roughly double the foundation's yearly benefactions. But the $1.5 billion has little relevance to the value of Buffett's future gifts, since their amount will depend on the price of Berkshire's stock when they are made. If the stock rises yearly, on average, by even a modest amount - say, 6% - the gain will more than offset the annual 5% decline in the number of shares given. Under those circumstances, the value of Buffett's contributions will rise.

Buffett himself thinks that will happen. Or to state that proposition more directly: He believes the price of Berkshire, and with it the dollar size of the contributions, will trend upward - perhaps over time increasing substantially. The other foundation gifts that Buffett is making will also occur annually and start in July. At Berkshire's current price, the combined 2006 total of these gifts will be $315 million. The contributions will go to foundations headed by Buffett's three children, Susan, Howard, and Peter, and to the Susan Thompson Buffett Foundation.

This last foundation was for 40 years known simply as the Buffett Foundation and was recently renamed in honor of Buffett's late wife, Susie, who died in 2004, at 72, after a stroke. Her will bestows about $2.5 billion on the foundation, to which her husband's gifts will be added. The foundation has mainly focused on reproductive health, family planning, and pro-choice causes, and on preventing the spread of nuclear weapons. Counting the gifts to all five foundations, Buffett will gradually but sharply reduce his holdings of Berkshire (Charts) stock. He now owns close to 31% of the company-worth nearly $44 billion in late June - and that proportion will ultimately be cut to around 5%. Sticking to his long-term intentions, Buffett says the residual 5%, worth about $6.8 billion today, will in time go for philanthropy also, perhaps in his lifetime and, if not, at his death.

Because the value of Buffett's gifts are tied to a future, unknowable price of Berkshire, there is no way to put a total dollar value on them. But the number of shares earmarked to be given have a huge value today: $37 billion.

That alone would be the largest philanthropic gift in history. And if Buffett is right in thinking that Berkshire's price will trend upward, the eventual amount given could far exceed that figure.

So that's the plan. What follows is a conversation in which Buffett explains how he moved away from his original thinking and decided to begin giving now. The questioner is yours truly, FORTUNE editor-at-large Carol Loomis. I am a longtime friend of Buffett's, a Berkshire Hathaway shareholder, and a director of the Susan Thompson Buffett Foundation.

Source: Fortune

**rolfw** · 26-06-2006

Well I guess that you can't take it with you and 8+ Billion is probably enough to last out his last 20 years or so.

**gameboy** · 26-06-2006

Originally Posted by rolfw

I guess that you can't take it with you

You could give it to me - I don't mind!

**Analoguesat** · 26-06-2006

Sod that - Id spend it!

**rolfw** · 26-06-2006

I could probably vote for two or three of those with that amount of money.

**Topper** · 27-06-2006

Well I consider myself as family hence my vote so I am keeping my options open

**Channel Hopper** · 27-06-2006

I got as far as 'If I had £40'...

***AlexBellisBrown*** · 27-06-2006

Personnally i would save enough to see myself and family through a few hundered years, buy everything i ever wanted, and give the rest to charity. You wouldnt need that much for the rest of your life.

**gameboy** · 02-07-2006

Originally Posted by AlexBellisBrown

buy everything i ever wanted

What would that be then?

**Salty25** · 02-07-2006

I'd be happy with £40million, just! Seriously, you have to give some to charity, and some to the family, and only friends if they are very close. Whatevers left, invest it and live off the interest. I make it sound so simple!

**gameboy** · 03-07-2006

Originally Posted by Salty25

I make it sound so simple!

That's the problem...

True friends don't want to know you - as they think they're sponging.
Others want to be your friend for that reason.

I have friends that have had this problem...

If they go to the pub with us and buy the drinks all night they're flash B****ds
If they go to the pub and buy their round then they're miserable B****ds.

They can't win - having said that it would be nice to have the option!

**Salty25** · 03-07-2006

i'd say buy your round, but be bloody generous, and if anyone says theyre short, just quickly and quietly say you'll pay. You cant win everyone over, but that way you look generous without being flash.

**T_G** · 03-07-2006

Well, if I had 400 squid extra I would give most of it to a friend of mine who is having a tough time. If it was 400 mil I would sort him and a few other friends out for life, then call up a limo, drive to airport, fly to Florida and buy Manchester United off Glazer. Fly back and enjoy giving Chelski a taste of their own medicine by buying everything that has two legs and is up for sale

**gameboy** · 03-07-2006

Originally Posted by T_G

buying everything that has two legs and is up for sale

That's a lot of Parrots! -

**BGonaSTICK** · 03-07-2006

I would buy Manchester United, and turn it into a football club. Not sure if £40bn would do it though. Might have to take out a massive loan as well

Actually, I would buy as much of the unspoilt UK countryside as possible, split it up into tiny plots and give it away to the public to stop the developers wrecking our green and pleasant land.

£40bn should get me an allotment in Surrey

**gameboy** · 03-07-2006

Originally Posted by BGonaSTICK

I would buy Manchester United. Might have to take out a massive loan as well

Is that not what Glazer did?

***wod*** · 03-07-2006

i'd spend it and buy some quality sat gear, nice house in spain, cyprus

always wanted to have my own bar, as that would be fun

buy some equipment for local hospital

Likvid · 03-07-2006

I would buy a big farm with cattle and lots of land and a nice house where i can be alone without worrying about stupid neighbours annoying me.

Would not care if the biz with the farm would not go around financially, as i like working on a farm as i did it many years when i was young and liked it.

Also a nice car and have enough money til i die so i don't need to worry about being poor.

Much of it i would give away to people who got trouble in their life that lost their jobs and have problems getting back into society and also to people who don't have the chance to pay for their kids to goto University, give poorer people a second chance to break away from their miserable situation which many lives in today, help people with difficult diseases and so on....

**gameboy** · 03-07-2006

Originally Posted by Likvid

Much of it i would give away to people who got trouble in their life that lost their jobs and have problems getting back into society and also to people who don't have the chance to pay for their kids to goto University, give poorer people a second chance to break away from their miserable situation which many lives in today, help people with difficult diseases and so on....

Hopefully that's what the Gates foundation will be doing with it.

**BGonaSTICK** · 03-07-2006

Originally Posted by gameboy

Is that not what Glazer did?

=====================================

***D4ftpunk*** · 04-07-2006

I would never give it to friends, friends can never be 100% permanent.
I would buy everything i wanted, including a huge house etc, sort myself out for the rest of my life by investing a lot of it into an interest free savings account such as an ISA or premium-bonds. Then i would give 1 mil to each of my family members, and then i would sort out people who have helped me throughout life. Then i would give lots to charity. Who needs 40 bill ? Money is paper. heh

**gameboy** · 04-07-2006

Originally Posted by D4ftpunk

investing a lot of it into an interest free savings account such as an ISA or premium-bonds.

Do you mean tax-free? Interest free won't make you much. You have a limit as to how much you can invest each year in an ISA maximum £6000 (I think) and you can only own £30000 worth of premium-bonds.

We're talking billions here... You could buy a small country set up your own team and win the World cup!

***BarMoo*** · 05-07-2006

By the second post I had decided what I would do with a substantial wod of money - by the last post I thought it might not be a good idea to mention it.

I would buy land and build on it for charitable/community projects, and/or, not-for-profit housing.

Maybe also get together with North Korea on building something that could render Astra 2D useless. Simply buying a 4.8m dish for myself would be just a bit too indulgent

.

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