3 Ways Jeff Bezos Protects His Billions
Written by
Cara Danielle Brown
Edited by
Rebekah Evans
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Sara Celotto, founder and CEO at The Vision Catalyst, LLC, still remembers her first real job in a bank.
“I can still remember explaining over and over that deposits are only insured up to $250,000. For most people, that seems like more than enough, but for someone with real wealth it’s just the beginning. That’s when you realize protecting money is not as simple as putting it in a bank,” she said.
So how do billionaires manage to protect their wealth? GOBankingRates examined three structures Jeff Bezos has put in place to do exactly that.
Also here are five facts about Bezos’ wealth.
Diversification
It might be tempting to put all your money back into your own company. But if Bezos put all his hard-earned money back into Amazon, he’d be taking on serious risk. Should the company suddenly fail, his fortune would disappear. This is why billionaires — just like average earners — mitigate risk by diversifying.
“The scale is different, but the fundamentals aren’t,” stated Celotto.
Bezos’ Single-Family Office (SFO), Bezos Expeditions, spreads his wealth across various industries like space, healthcare, tech and real estate. Real estate, in particular, can be a savvy investment because it is a tangible asset. Markets may go up or down, but real estate grows in value over time and remains protected against inflation.
Without heavily relying on any one source, Bezos’ wealth becomes more stable. Notable investments in his portfolio include Airbnb, Uber and Zocdoc.
Utilizes Trusts
Trusts — both revocable and irrevocable — are some of the most reliable ways billionaires protect wealth.
“They reduce estate taxes, shield assets from lawsuits and control how wealth is distributed across generations,” said Laura Cowan, estate planning attorney, entrepreneur and author at 2-Hour Lifestyle Lawyer. Trusts also help surviving relatives avoid the costly probate process.
According to Celotto, Bezos’ D.C. mansion is currently owned by the Cherry Revocable Trust. He also owns three additional properties in Indian Creek Florida through three separate trusts: The Sunshine Trust, The Palm Trust and The Cape Trust. And this only scratches the surface of his real estate holdings.
Additionally, Bezos utilizes dynasty trusts for long-term wealth preservation which avoid the Generation-Skipping Transfer (GST) tax. And he has established trusts for philanthropic giving via the Bezos Earth Fund and the Bezos Day One Fund.
Gives To Philanthropy
According to Cowan, billionaires like Bezos understand that philanthropic giving is not merely an altruistic pursuit; it’s a wealth strategy. Not only do charitable donations reduce Bezos’ taxable income, they also provide influence by helping him shape his personal brand and legacy.
“[Bezos Earth Fund’s] $10 billion commitment not only funds climate projects but also secures Bezos immediate tax deductions while giving him long-term discretion over how funds are deployed,” Cowan explained.
Philanthropic giving on this scale positions him and Lauren Sanchez as global change-makers by having a key stake in assets that shape culture, politics and the future economy. Power means protection.
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