Democrats may leave a tax loophole billionaires love untouched. Closing it would dent the fortunes of Jeff Bezos and Elon Musk.

TAX
SpaceX founder and Tesla CEO Elon Musk/President Joe Biden/Amazon founder and CEO Jeff Bezos

  • Democrats can’t decide whether to close a tax loophole that’s popular with the wealthiest Americans.
  • The “step-up basis” loophole lets billionaires pass down investment gains without paying any taxes.
  • Here’s how the loophole works, and why Democrats are split on whether to close it.
  • See more stories on Insider’s business page.

Democrats face a looming deadline to pass an infrastructure package before the end of September – and they’re still squabbling over how to pay for it.

Many of the solutions are simple. House Democrats and the Biden administration both support higher taxes on rich Americans and corporations. But one particular tax issue – the “step-up basis” – sits at the center of their hemming and hawing.

It has to do with how, when Americans sell assets like stocks or bonds, they pay a capital gains tax on their earnings. If someone bought a stock for $100 and sold it for $250, they’d pay taxes on the $150 profit.

Through the step-up loophole, however, those charges can be dodged entirely. If an investor transfers assets when they die, the inheritor receives them without a capital-gains tax burden. It’s also an easy way to dodge the estate tax. While estates are taxed when they’re transferred after the owner’s death, gifts – like unrealized gains from assets -aren’t.

Understanding the loophole of a ‘step up’ in value

The term “step-up” refers to the difference in value and tax liability that an asset has when it is acquired and when it is transferred to an inheritor.

The proverbial billionaire Jerry, for example, could buy a home for $250,000 and sell it for $1 million, after which he’d pay taxes on the $750,000 gain. But if Jerry passes the home onto his daughter Ella, and she has it appraised at $1 million, its value has taken a “step up” in value to $1 million. If Ella sells the home for $1 million or less, she wouldn’t owe anything in taxes.

For billionaires like Jeff Bezos and Elon Musk who earn far more through their investments than their salaries, this loophole is a perfect way to shield their wealth. Intergenerational wealth has contributed to surging inequality in America, which grew wider during the pandemic. Since 2019, the wealth of the top 400 richest people in the US increased by $1.4 trillion, per research from Gabriel Zucman and Emmanuel Saez, a pair of left-leaning economists at the University of California, Berkeley.

“Often, for these people, wealth accumulates tax-free their entire lives,” Frank Clemente, executive director at the left-leaning advocacy group Americans for Tax Fairness, told Insider. President Joe Biden proposed ending this loophole and making billionaires “pay their fair share,” so why does it look like his party won’t touch it?

Democrats split on hitting the rich where it hurts

Biden wants inheritors to pay taxes on gains larger than $1 million for single filers and $2.5 million for couples. Coupling that with a higher capital gains tax rate could raise more than $320 billion over the next decade, the White House said.

This week, the House Ways and Means Committee released tax proposals that would tax the rich more, including raising the top income tax rate to 39.6% and boosting the top capital gains tax rate to 25%. Left out of this framework, though, was an end to the step-up basis.

“The [Ways and Means] proposal fails to end the ability of the wealthiest filers to go through life without paying any taxes on the vast bulk of their incomes from assets, and this should be revisited as the reconciliation process continues,” Chye Chin Huang, executive director of the Tax Law Center at New York University, wrote on Twitter,

The Senate hasn’t released its own tax framework, but it is considering eliminating the loophole. “I feel very strongly that yearly, billionaires who did extraordinarily well in the pandemic should make tax payments like nurses or firefighters,” Sen. Ron Wyden of Oregon, chair of the Senate Finance Committee, told Insider.

Wyden will probably have to contend with moderates in the Senate, namely Joe Manchin and Kyrsten Sinema, just as moderates in the House have balked at closing the step-up loophole. If the moderates’ proposals prevail, the wealthy will likely continue to park their cash in assets with little financial consequence.

Closing step-up “is the one thing in the Biden plan that does get at wealth accumulation,” Clemente said. “For the really wealthy folks, they’re not going to have to cash out, so they won’t pay the tax anyway.”

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Billionaire investor Howard Marks compares the current market to the mid-2000s bubble, touts bitcoin’s staying power, and offers several tips in a new interview. Here are the 12 best quotes.

Howard Marks
Howard Marks.

  • Oaktree’s Howard Marks discussed stocks and bitcoin, and shared several tips for investors.
  • The investor highlighted similarities between the current market and the mid-2000s bubble.
  • Marks underlined the importance of managing risks, not panic-selling, and staying skeptical.
  • See more stories on Insider’s business page.

Howard Marks drew parallels between the current market and the asset bubble that preceded the global financial crisis, highlighted bitcoin’s longevity, and argued rock-bottom interest rates may justify higher stock valuations, speaking during the latest episode of the “We Study Billionaires” podcast.

The billionaire cofounder and co-chairman of Oaktree Capital Management advised investors to carefully manage their portfolio risk, resist the urge to buy high and sell low, and be skeptical of grand claims.

Here are Marks’ 12 best quotes, lightly edited and condensed for clarity:

1. “The pandemic was like a meteor hitting the Earth from outer space. The market decline was not born out of excess optimism. The recovery was not merely a bounce back from excess pessimism, it was the result of the greatest economic rescue effort in history.” – arguing the past 18 months shouldn’t be viewed as a traditional market cycle.

2. “There certainly are similarities that cause Jeremy Grantham and others to say ‘bubble territory’ and to blow the whistle of caution.” – comparing the hype around several assets in 2006 to the current market boom.

3. “If investors can think of an asset class and say, ‘Oh, for that, there’s no price too high’ – that’s one of the greatest indications of a bubble.”

4. “We have the lowest interest rates in history. That would simplistically argue for the highest asset valuations in history.”

5. “I came out very strongly against bitcoin in 2017. I was extremely negative, I was extremely outspoken. I had a knee-jerk reaction to something new. Now I prefer to say, ‘I don’t know enough about it to have a strong opinion.’

6. “Bitcoin has been around now for a dozen years. If it’s a flash in the pan, it’s an awful long pan.”

Read more: ‘It’s begging to be destroyed’: A stock trader who says he made more than $100,000 shorting the market during the 2008 crash just bet against the S&P 500 – and warns there’s a ‘fair chance’ stocks are about to drop 25%

7. “One of the most important aspects of being a good investor is you try to set things up so that if things go your way, you do great. But if things don’t go your way, you still do okay.”

8. “Good investing is not a matter of buying good things but buying things well. And if you don’t know the difference, then you shouldn’t be doing much investing.”

9. “Don’t get in the way of the compounding machine. Just get out of the way. Don’t screw it up.”

10. “When you’re in an area which is beset with uncertainty, variability, unpredictability, randomness, things like that – it just strikes me as folly to be confident that you know the future.”

11. “Active investors are in this business to buy low and sell high. But everything in our nature conspires to make us buy high and sell low. It is essential to combat those instincts.”

12. “Somebody comes into your office and says, ‘I’ve been managing money for 30 years, I’ve made 11% a year, and I’ve never had a down month.” Your job is to say, ‘That’s too good to be true, Mr. Madoff.'” – urging investors to always be skeptical of fantastic claims and promises.

Read the original article on Business Insider

Billionaire investor Leon Cooperman warns bitcoin buyers, rings the inflation alarm, and rules out an imminent market crash in a new interview. Here are the 14 best quotes.

Leon Cooperman
Leon Cooperman.

  • Leon Cooperman doesn’t expect a market crash, or recession for another year at least.
  • The billionaire investor sounded the inflation alarm and cautioned against betting on bitcoin.
  • Cooperman called out Robinhood users for boosting meme stocks to heady valuations.
  • See more stories on Insider’s business page.

Billionaire investor Leon Cooperman ruled out an imminent market crash, blasted the Federal Reserve for overstimulating the economy, and warned against holding bitcoin in a CNBC interview this week.

Cooperman, who converted his Omega Advisors hedge fund into a family office in 2018, also rang the inflation alarm, questioned the hype around meme stocks, and bemoaned the tiny yields from bonds and saving accounts.

Here are Cooperman’s 14 best quotes from the interview, lightly edited and condensed for clarity:

1. “Big declines come about because of recession. We’re coming out of a recession, we’re not going into one anytime soon. That’s at least a year away, maybe longer.” – Cooperman listed higher inflation, a falling dollar, and the Fed reducing, or eliminating its economic support as likely catalysts for the next downturn.

2. “The Fed is wrong on inflation. This idea that inflation is transitory is a pipe dream. 65% of business costs are labor. You know anybody working for less money in this environment?”

3. “The Fed has been the handmaiden to this administration. We’re running enormous fiscal deficits and the Fed has been funding it.”

4. “The market structure is broken. There’s no stabilizing forces in the market now, it’s all run by machines. When there’s a real reason for the market to go down, it’ll go down so quickly your head’s gonna spin.”

5. “If you don’t understand bitcoin, it means you’re old. I’m 78, I’m old, I don’t understand it. One thing I do know is it’s not in the interest of the US government to further a substitute for the US dollar.”

6. “I’d be very careful with bitcoin. I don’t think it makes a great deal of sense. If you’re nervous about the world, gold would be a better store of value than bitcoin.”

7. “Most companies are not overvalued against interest rates today. Some things are overpriced, are crazy – I call that the Robinhood market. I hope they know what they’re doing, but I doubt it.”

8. “Negative interest rates are ridiculous. There’s a bunch of academicians running monetary policy around the world. Bonds are totally mispriced. The idea of buying 10-year German bonds and getting less back in 10 years than you invest today – I really don’t get it at all.”

9. “There’s gotta be a return from investing in fixed income. The government’s gotta sell a lot of bonds. What schnook is gonna buy a bond today?”

10. “I’m listening to Fed-speak, I’m looking at inflation, market action, gold, bitcoin, the dollar exchange rate, and interest rates overall. I’m watching a lot of things for a signal to change.” – outlining what he’s monitoring to determine when it’s time to get out of the market.

11. “I’m a perennial optimist. I kind of agree with Warren Buffett. People don’t get rich being short America.”

12. “I don’t like the attack on the wealthy. I’m giving all my money away so I couldn’t care less, but I’m a capitalist with a heart. This constant attacking of wealthy people is very disturbing to me.”

13. “You could take away all the money from the wealthy and still not cover the fiscal problems for the country.”

14. “If you go to your financial planner and ask them what are you gonna earn on your savings, the answer is ‘bupkus.’ You can’t earn any money on your savings, you can’t afford to retire. That reduces the opportunity for the young people entering the labor force. The world has been turned upside down. This has got to change.”

Read the original article on Business Insider

Warren Buffett used Afghanistan to explain the role of luck in his career – and call for higher taxes on the rich

Warren Buffett
Warren Buffett.

  • Warren Buffett has underlined how lucky he is by pointing to Afghanistan.
  • The investor won the “ovarian lottery” by being born in the US, where his skills are rewarded.
  • Buffett has also invoked Afghanistan to highlight inequality and push for higher taxes.
  • See more stories on Insider’s business page.

Warren Buffett’s talent for spotting undervalued businesses has made him one of the wealthiest men in history. However, he has repeatedly underscored the outsized role that luck has played in his career, and highlighted Afghanistan to hammer his point home.

Winning the lottery

The famed investor and Berkshire Hathaway CEO popularized the term “ovarian lottery,” or the idea that the circumstances of a person’s birth shape their opportunities in life.

“It’s the most important event in which you’ll ever participate,” Buffett said at Berkshire’s annual shareholder meeting in 1997. “It’s going to determine way more than what school you go to, how hard you work, all kinds of things. You’re going to get one ball drawn out of a barrel that probably contains 5.7 billion balls now, and that’s you.”

Buffett noted that he and his business partner, Charlie Munger, won the lottery by being born white, smart, able-bodied, male, and in America.

“When we were born, the odds were over 30-to-1 against being born in the United States,” Buffett said at the meeting. “Just winning that portion of the lottery, enormous plus. We wouldn’t be worth a damn in Afghanistan.”

“We’d be giving talks, nobody’d be listening,” he continued. “Terrible.”

The US has richly rewarded the two men’s knack for valuing businesses, but that wouldn’t be the case in every country, Buffett continued.

“Is that the greatest talent in the world? No,” he said. “It just happens to be something that pays off like crazy in this system.”

Buffett repeated that point more than a decade later, adding that many important jobs are far less lucrative.

“The market system rewards me outlandishly for what I do,” Buffett told Time magazine in 2012. “But that doesn’t mean I’m any more deserving of a good life than a teacher or a doctor or someone who fights in Afghanistan.”

Sharing the jackpot

Buffett has drawn comparisons between the US and Afghanistan to emphasize how inequality starts at birth. He’s called for a system that incentivizes people to use their skills if they’re valued by the market and society, but also helps people who don’t hit the jackpot in life.

That type of system “makes sure that just because at that one moment in time they got the wrong ticket, they don’t live a life that’s dramatically worse than the people that were luckier,” Buffett said at the 1997 meeting.

The Berkshire chief has also pointed to Afghanistan to make his case for higher taxes on the wealthy.

“While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks,” he said in a New York Times column titled “Stop Coddling the Super-Rich” in 2011.

Buffett’s comments show he’s aware of his numerous advantages and privileges, which include living in a country that rewards his skills and protects his wealth. Afghanistan is his go-to example of a much tougher situation, fueling his belief that the less fortunate should be lifted up and the most affluent should share more of their wealth.

Read the original article on Business Insider

US billionaires’ collective wealth grew enough during the pandemic to pay off the $1.7 trillion student debt crisis

Blue Origin CEO Jeff Bezos and SpaceX CEO Elon Musk.
Blue Origin CEO Jeff Bezos (left) and SpaceX CEO Elon Musk.

  • A new report found US billionaires collectively got $1.8 trillion richer during the pandemic.
  • That’s enough wealth to pay off the entire $1.7 trillion student debt crisis.
  • Tesla CEO Elon Musk, for example, got $150 billion – or 600% – richer.
  • See more stories on Insider’s business page.

The pandemic brought significant financial hardships onto the US, but the ultra-wealthy remained relatively unscathed. So much so, in fact, that billionaires in the country collectively got $1.8 trillion richer – enough to pay off the entire student debt crisis, and then some.

Americans for Tax Fairness (ATF) and the Institute for Policy Studies Program on Inequality (IPS) released a report on Tuesday that revealed how much wealth billionaires gained during COVID-19 as of August 17. It found that their combined wealth skyrocketed nearly two-thirds, or 62%, to $4.8 trillion since March 2020, after starting off the pandemic just short of $3 trillion.

According to the report, Tesla CEO Elon Musk’s wealth increased by $150 billion during the pandemic – a 600% gain – and Amazon CEO Jeff Bezos’ wealth grew $75 billion in the same time frame.

“The great good fortune of these billionaires over the past 17 months is all the more appalling when contrasted with the devastating impact of coronavirus on working people,” the report said. “Over 86 million Americans have lost jobs, almost 38 million have been sickened by the virus, and over 625,000 have died from it.”

This report came after a ProPublica report in June that detailed how the wealthiest Americans, including Bezos and Musk, managed to pay little-to-nothing in federal taxes.

The student debt crisis continues to grow

As US billionaires’ wealth grew during the pandemic, so did the student debt crisis, which now stands at $1.7 trillion. Although President Joe Biden has canceled $8.7 billion in student debt for certain groups of people, that is less than 1% of the entire student debt burden, and borrowers across the country are struggling to keep up on their payments as their debt continues to grow.

Student debt payments, along with interest, have been on pause for the duration of the pandemic, and Biden recently announced a “final extension” of the pause through the end of January to give borrowers additional time to prepare restarting payments.

But, as Insider previously reported, while the pause has provided significant relief for borrowers, they will still not be ready to start making payments again come February and feel that without student-debt cancellation, there is no way out of their student debt.

“I’ve paid back almost all of my loans, but I still owe the full amount,” Alexendria Mavin, who graduated $117,000 in student debt, has paid $70,000 of it, and still owes $98,000 told Insider. “It’s a never-ending cycle.”

That’s why Democrats like Massachusetts Sen. Elizabeth Warren are calling both for $50,000 in student-debt cancellation for every borrower and a wealth tax to create a tax code that is fair for everyone.

“America’s billionaires have done great during this pandemic,” Warren wrote on Twitter. “America’s working families? Not so much. It’s time for a #WealthTax on the ultra-rich to raise the revenue needed to invest in child care, expand health care coverage, and fight back against climate change.”

Read the original article on Business Insider

Jeff Bezos and Bill Gates are among the billionaires paying a total of $15 million to fund a search for metals used in electric vehicles

Jeff Bezos, Bill Gates, and Michael Bloomberg
Jeff Bezos, Bill Gates, and Michael Bloomberg are among the billionaires financially backing KoBold Metals to search for electric vehicle metals

  • KoBold Metals, backed by Jeff Bezos and Bill Gates, will hunt for metals in Greenland.
  • The mineral company will spend $15 million looking for materials with mining firm BlueJay.
  • Bill Gates’ climate and technology fund is KoBold Metals’ principal investor.
  • See more stories on Insider’s business page.

A mineral company backed by billionaires, including Jeff Bezos and Bill Gates, on Monday agreed to join mining firm Bluejay to hunt for metals used in electric vehicles.

KoBold Metals will spend $15 million to search for nickel, copper, cobalt, and platinum as part of BlueJay’s Disko-Nuussuaq project in Greenland, the world’s biggest island, BlueJay said in a statement.

In return, KoBold will have a 51% stake in the project, London-based Bluejay said.

KoBold, which is privately owned, uses artificial intelligence, machines, and computing to look for the raw materials needed for electric vehicles, according to its website.

The mineral company’s principal investor is Breakthrough Energy Ventures, a climate and technology fund led by Microsoft co-founder Bill Gates, the statement said.

Read more: Why lithium mines in Cornwall could attract Elon Musk’s Tesla to the UK – and ease China’s stranglehold on the electric car market

Amazon founder Jeff Bezos, Bloomberg founder Michael Bloomberg, and Bridgewater Associates founder Ray Dalio are also investors, according to the statement.

Other investors in KoBold include Silicon Valley VC fund, Andreessen Horowitz, and Norwegian state-owned energy company Equinor.

KoBold CEO Kurt House said in the statement: “The Disko region has seen the rare convergence of events in earth’s history that could have resulted in forming a world-class battery metal deposit.”

“Disko is a project with great potential for the discovery of globally significant deposits of battery metals,” Blueyjay’s CEO Bo Møller Stensgaard added.

Read the original article on Business Insider

The luxury boats owned by some of the wealthiest people in tech, from a yacht so big it has its own support boat to superyachts with swimming pools and basketball courts

Jeff Bezos
  • Many billionaires like Jeff Bezos and Richard Branson enjoy spending their time on massive luxurious yachts.
  • The boats are decked out with amenities that many Americans can only dream of.
  • Here are some of the billionaires in tech who own private yachts.
  • See more stories on Insider’s business page.

Billionaires are often known for their luxurious lifestyles and high profile gadgets.

Some billionaires, like Elon Musk and Bill Gates, buy private planes to take control of the open skies – others purchase yachts to access the open seas.

From Amazon founder Jeff Bezos to Oracle cofounder Larry Ellison, and Google cofounders Sergey Brin and Larry Page, many leaders in tech have created their own mini vacation hubs at sea, decking their boats with amenities like gyms, spas, pools, nightclubs, and movie theaters.

If you want to find out what life is like aboard these multi-million-dollar yachts, some of them are available to rent out for a few nights or weeks at a time. For instance, late Microsoft co-founder Paul Allen’s yacht is expected to be available for rent for around $1 million per week, The Guardian reported. In the past, chartering yachts owned by billionaires like Alphabet President Sergey Brin has cost customers anywhere from $773,000 a week to $1.2 million.

Take a look at some of the yachts that have been owned by tech billionaires.

A mystery buyer bought a 414-foot superyacht that was once owned by late Microsoft co-founder Paul Allen for $278 million. Allen had the boat, which was named “Octopus,” built in 2003 for $200 million. Since the tech billionaires death in 2018, the boat has been listed for as much as $325 million.

The blue hull of the luxury yacht "Octopus" sits at the dock in London's Canary Wharf
Octopus in Canary Wharf, London, in 2012.

Source: SuperYacht Times

The undisclosed Scandinavian buyer is expected to charter the yacht for the first time in January 2022 via major yachting broker, Camper & Nicholsons. A price has yet to be announced for renting the boat, but it is expected to be around $1 million per week.

octopus paul allen luxury yacht
414ft luxury yacht ‘Octopus’ owned by Microsoft co-founder, Paul Allen, is moored to fuel up at Ege Ports in Kusadasi district of Aydin, Turkey on April 27, 2015.

Sources: The Guardian, SuperYacht Times

Amazon founder Jeff Bezos is building his own 127-meter yacht, according to a book. The yacht is so massive it has an additional “support yacht” with its own helipad.

bezos
Jeff Bezos.

Source: Amazon Unbound: Jeff Bezos and the Invention of a Global Empire

Bezos has long been interested in yachts. In 2019, he was spotted aboard entertainment mogul David Geffen’s superyacht.

12686190635_8b47dfabbc_c
David Geffen’s superyacht

Oracle cofounder Larry Ellison owns a 288-foot yacht named Musashi that he acquired in 2013.

larry ellison musashi yacht

Source: Forbes

Ellison has owned several superyachts over the years, including the Katana, the Ronin, and the Rising Sun.

rising sun

The Oracle cofounder also has a knack for competitive yacht racing, and helped to found and back a racing team, called Oracle Team USA, in 2000. The team has found success and won several prestigious titles over the years.

larry ellison oracle yacht team usa

Source: Telegraph

Ellison previously owned a bigger, 454-foot yacht called Rising Sun, which was designed specifically for the CEO in 2005. That yacht reportedly has 82 rooms, a movie theater, a wine cellar, and a basketball court. However, Ellison sold off the Rising Sun to Geffen for a reported $300 million.

Larry Ellison

Source: Forbes, Boat International

Ellison’s boat, Musashi, is a sister ship to the yacht of another billionaire, former Sears CEO Eddie Lampert. However, the yacht, named Fountainhead, is often mistaken for belonging to billionaire investor Mark Cuban. “The guy who owns the boat tells everyone that it’s mine,” Cuban told Page Six in 2016. “It’s so crazy … I don’t even own a boat.”

Mark Cuban
Mark Cuban.

Source: Page Six

Ellison’s yacht reportedly influenced the decision of late Apple CEO Steve Jobs to get a boat himself. However, Jobs never set foot on the boat – the yacht was commissioned in 2008, but wasn’t completed until 2012, a year after his death.

Steve Jobs

Source: Business Insider

When Jobs died in 2011, his yacht – along with his $14.1 billion fortune – was inherited by his wife, Laurene Powell Jobs, founder and president of a social-impact nonprofit called the Emerson Collective. The 256-foot yacht in named Venus, and is worth $130 million.

laurene powell jobs steve jobs yacht

Source: Business Insider

Google’s cofounders, Larry Page and Sergey Brin, are two of the richest people in the world. The two billionaires are known to splurge: In addition to each owning a super yacht, they both own private planes as well.

Larry Page Sergey Brin
Sergey Brin (left) and Larry Page.

Sources: Forbes, Business Insider

Page owns a yacht named Senses, a $45 million 194-foot boat that he bought in 2011 from a New Zealand businessman. The yacht has a private beach club with a Jacuzzi and sun beds, both indoor and outdoor dining areas, and a helicopter pad.

Larry Page superimposed with Senses yacht

Source: Boat International

Meanwhile, Brin owns a longer, 240-foot yacht that he bought for a cool $80 million in 2011. It’s reportedly one of the world’s fastest super yachts, and is equipped with a dance floor and open-air movie theater.

dragonfly yacht

Source: Business Insider

Brin’s yacht is named Dragonfly. The boat shares a name with Google’s once-secret project to launch a censored search engine in China. Google said in 2019 it had officially terminated the project.

Sergey Brin

Source: Business Insider, Forbes

But Brin and Page aren’t the only two high-powered Google figures with yachts. Former Google CEO Eric Schmidt owns a 194-foot yacht name Oasis. The yacht reportedly features a pool and a gym-turned-nightclub. He bought the boat in 2009 for a reported $72.3 million.

eric schmidt oasis

Sources: Business Insider, GQ

For Skype cofounder Niklas Zennstrom, his interest in yachts skews toward racing and competitive sailing. Zennstrom has gone through a succession of boats all named Ran, and his most recent purchase is the seventh in the series.

Co-Founder and CEO of Skype Technologies, United Kingdom Niklas Zennstroem
Co-Founder and CEO of Skype Technologies, United Kingdom Niklas Zennstroem listens during a plenary entitled ‘Digital 2.0:Powering a Creative Economy’ at the World Economic Forum in Davos, Switzerland,

Source: CNN

His latest yacht, appropriately named Ran VII, is the most technologically advanced of all of Zennstrom’s boats. The racing yacht uses electrical power, which Zennstrom says makes it “lighter, less drag, quieter, and most importantly it is environmentally friendly.”

ran vii 7 yacht niklas zennstrom

Source: CNN

The 40-foot yacht will compete in regattas through the racing team owned by Zennstrom and his wife, Catherine. The Ran racing team launched in 2008, and has won some prestigious regattas.

ran 7 yacht niklas zennstrom
The Ran racing team.

Source: CNN

Barry Diller, chairman of digital media company IAC, co-owns a $70 million yacht with his wife, fashion designer Diane von Furstenberg.

Barry Diller Diane Von Furstenberg
Diane von Furstenberg, left, and Barry Diller.

Source: Business Insider

The sailing yacht, named Eos, is 350 feet long with six bedrooms. The power couple has hosted many celebrities over the years – a few that have been spotted aboard Eos include model Karlie Kloss, actor Bradley Cooper, journalist Anderson Cooper, and singer Harry Styles.

eos

Source: W Magazine

For Jim Clark, the cofounder of Netscape, one yacht hasn’t been enough. Clark has owned boats for more than 30 years, and in 2012, he put up two of his sailing yachts for sale.

jim clark boat
Jim Clark, right.

Source: Business Insider

Clark listed the boats for a combined $113 million: the 136-foot Hanuman for $18 million, and the 295-foot Athena for $95 million. However, Clark has yet to offload Athena. Clark also previously owned a 155-foot yacht named Hyperion, and currently also owns a racing yacht named Comanche.

jim clark athena yacht
The yacht Athena.

Source: Boat International

Charles Simonyi worked at Microsoft until 2002, and oversaw the creation of Microsoft Office software. A few years before he left, Simonyi decided to purchase a yacht. He told the designer that wanted his yacht to be “home away from [his] home in Seattle.”

Charles Simonyi

Source: Boat International

The product of that conversation in 1999 is Simonyi’s yacht named Skat, meaning “treasure” in Danish. The yacht measures 233 feet long, and is unique with its nontraditional design and gray color. Skat features a matching gray helicopter, a gym, and motorcycles.

charles simonyi skat yacht

Source: Yacht Charter Fleet

Opulent British billionaire Richard Branson owned a yacht until he sold it in September 2018. The 105-foot catamaran sold for $3 million, significantly lower than the $9.6 million price Branson listed the boat for in 2014.

richard branson necker belle

Source: Business Insider

Branson, the founder of Virgin Group, bought the boat in 2009. He named it Necker Belle, a nod to his private Caribbean island, Necker Island.

Necker Island

Source: Business Insider

Additional reporting by Paige Leskin.

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I walked down Singapore’s most exclusive street and found it was a strange mix of mansions, embassies, and empty estates

a mansion on nassim road in singapore
Some of Nassim Road’s mansions sit empty because their owners bought them as investments.

  • Nassim Road, Singapore’s most prestigious street, is lined with embassies and mansions.
  • I walked down the street recently and found that many of the residences sat empty and in a state of disrepair.
  • Most of the mansions were barely visible behind dense foliage and gates with security cameras.
  • See more stories on Insider’s business page.
Nassim Road, a quiet, tree-lined street that’s less than a mile long, is the most exclusive and expensive street in Singapore.

nassim road singapore map
Nassim Road is located near the Botanic Gardens in central Singapore.

Nassim Road’s ultra-wealthy residents live in mansions known as “good class bungalows” — the most coveted type of housing in Singapore, which must have a land area of at least 15,000 square feet.

“Nassim has become a brand name on its own,” Bruce Lye, the cofounder and managing partner at Singapore Realtors Inc., told me. “The Nassim address itself commands a big premium … If you have the opportunity to own a piece of land there, it’s something that can be passed down for generations to come.”

Of the handful of good class bungalows publicly listed on Nassim Road right now, the cheapest is about $45 million and the priciest is roughly $72 million.

The most expensive home ever to sell on Nassim Road was a bungalow that sold for $170 million in 2019. The rumored buyer? Facebook cofounder Eduardo Saverin, who has lived in Singapore for more than 10 years. Saverin did not immediately respond to Insider’s request for comment for this story.

Nassim Road’s exclusivity stems from its secluded locations, large lots, and the fact that it’s a short street with a limited number of home sites.

the road sign of nassim road, singapore's most prestigious and expensive road

“A piece of regular land in Nassim is like fine art or wine,” Lye told me in March, adding that the prices of such properties “keep reaching new highs all the time.”

I recently took a walk up Nassim Road, starting from where it meets Tanglin Road and Orchard Road — Singapore’s famous shopping street — all the way to its end point at the Singapore Botanic Gardens. Here’s what I saw.

After the hustle and bustle of the Orchard Road area, stepping onto Nassim Road felt like stepping into a quiet, lush garden.

a view of trees and a condo building on nassim road, singapore's most prestigious and expensive road

The road was lined with trees, which muffled the noise of the city.

Toward the bottom of the road were a couple of condo buildings including this one, called Nassim Park.

a condo building on nassim road in singapore

Current listings in the building range from a four-bedroom unit for about $9.5 million to a five-bedroom penthouse for $26 million.

But the street is not all polish: I passed an abandoned building with a sign that said it used to be the Embassy of Saudi Arabia.

an abandoned embassy building behind a gate on nassim road in singapore

The Royal Embassy of Saudi Arabia is now located off Orchard Road, about a 10-minute drive away.

As I continued my walk up Nassim Road, the sounds of the city faded away even further and all I heard were birds and the occasional sounds of construction.

a view of the tree lined street on nassim road in singapore

The few cars that drove by were either construction vehicles or Range Rovers, Audis, Mercedes, and Porsches.

The condo buildings I saw at the bottom of the street gave way to grand homes like this gated mansion …

a white gated mansion surrounded by palm trees on nassim road in singapore

… and this ultra-modern house, which belongs to Stephen Riady, the executive chairman of real-estate company OUE.

a modern mansion on nassim road in singapore

Riady paid 95 million Singapore dollars, or about $70 million, for the home — which was designed by French architect Jean Francois Milou — in August 2019.

Nassim Road is clearly a high-security area: Every home I saw was outfitted with multiple security cameras, and that was on top of the gates and fences that surrounded most of the homes.

a view of two security cameras against blue sky and trees

And the homes weren’t the only high-security buildings on Nassim Road.

I walked by the Russian Embassy, a stark gray, brutalist building that had signs warning that photography was forbidden. The street is also home to the Embassy of the Philippines and the Embassy of Japan.

Some of the houses had gate houses.

a gatehouse and bungalow on nassim road in singapore

Most of the mansions were set far back on their lots and partially obscured by trees.

the front gate entrance to a mansion hidden among the trees on nassim road in singapore

Many were barely visible at all.

a mansion peeks through thick trees on nassim road in singapore

Through dense foliage, I could see just a peek of Eden Hall, the official residence of the British high commissioner in Singapore.

a blue and white mansion seen through thick trees on nassim road in singapore

In March, a bungalow right next to Eden Hall sold for $96 million to Jin Xiao Qun, the wife of Singaporean tech entrepreneur Shi Xu, who founded Nanofilm Technologies International.

Sunita Gill, the CEO and founder of the real-estate firm Singapore Luxury Homes, told me at the time that the new owner would likely need to shell out about another $20 million to renovate the nearly 60-year-old bungalow — showing just how much effort and money buyers are willing to spend for property on Nassim Road.

About halfway up Nassim Road is the most expensive property ever sold in the prestigious area: a good class bungalow that sits on nearly 85,000 square feet of land.

most expensive house nassim road singapore

In the summer of 2019, it sold for SG$230 million, or about $170 million. The seller was Cheng Wai Keung, chairman of property developer Wing Tai Holdings, who has an estimated net worth of $705 million.

The identity of the buyer has never been made public, but rumors have floated around that it was billionaire Facebook cofounder Eduardo Saverin.

The old Saudi embassy was not the only run-down building I saw on Nassim Road. Several other homes also appeared to be empty.

a mansion on nassim road in singapore

Lye, the real-estate broker, told me that quite a few of the homes on Nassim Road are sitting empty because some buyers are “land banking,” or holding the property with the intention of selling it in the future rather than living in it.

“People who own these plot of land are waiting for somebody to buy them out at whatever premium that they think the plot commands,” Lye said. “People are just buying it, knowing that the value will always be there.”

There were, however, multiple active construction sites on Nassim Road where people were either renovating older bungalows or building new ones.

a residential construction site on nassim road in singapore

The grandeur of Nassim Road is perhaps best displayed by satellite, which shows sprawling mansions with resort-like grounds and swimming pools.

a satellite view of mansions on nassim road in singapore

But from the road, you can only catch a tiny glimpse of that opulence. The neighborhood’s true essence is hidden from view for those who don’t have the wealth and access to go beyond the gates.

If you’re looking for a clear display of Singapore’s famed wealth, you won’t find it on Nassim Road.

a view of an entrance of singapore botanic gardens
My walking tour of Nassim Road ended at one of the entrances to the Singapore Botanic Gardens.

While there’s no dearth of impressive homes on Nassim Road, the bulk of them are hidden from view by trees, walls, and fences.

And that’s certainly not by accident: Like the ultra-wealthy across the globe, Singapore’s rich on Nassim Road clearly covet privacy and security.

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Business leaders have immense power over space travel but there’s a risk they won’t make ethical decisions for the rest of us, say experts

space station
A view from the International Space Station.

  • Many business leaders are showing a keen interest in space travel.
  • Experts have questioned how leaders’ decisions about the future of space will affect ordinary people.
  • One said it’s unclear whether leaders will make humane social and political orders beyond Earth.
  • See more stories on Insider’s business page.

Amazon founder Jeff Bezos recently jetted to the edge of space and back in a rocket designed and built by his company Blue Origin. Not long before that, fellow billionaire Richard Branson, who founded Virgin Galactic, also traveled to the edge of space.

While both events were marked as milestones in ushering in a new era of commercial space travel, some space industry figures say there are inherent problems with giving business leaders the keys to space. These leaders also include SpaceX founder Elon Musk, who along with Bezos and Branson, has shown great interest in the space sector.

“They may not make the wisest or most ethical decisions for all of us,” said Jordan Bimm, a space historian at the University of Chicago.

According to Bimm, for Bezos and especially Musk, tourism is just one step in a grand vision of private space settlement. “Bezos envisions millions of humans living off-world in verdant cylindrical space stations. Musk, on the other hand, is fixated on Mars and establishing a million-person city there,” he added.

But this approach is perilous, according to Bimm. He said: “Can we trust them to establish just and humane off-world social and political orders?”

Blue Origin, Virgin Galactic, and SpaceX did not immediately respond to Insider’s request for comment.

The shift to privatized space travel could also shake up the way NASA operates in the future, Bimm said: “It could mean a revitalized NASA, or a NASA that shifts into more of a basic space science and advisory role to private companies doing human spaceflight.”

Billionaire business leaders are also changing the career path into the space industry, experts told Insider.

“What is changing is the type of elite person allowed to go there,” Bimm said. “Before, it was soldiers and later scientists, and now we are seeing the very wealthy and their handpicked companions added to this elite lineage,” he said.

Michael Brown, assistant professor from the School of Physics and Astronomy at Monash University, agreed, saying that in previous decades those chosen for spaceflight missions tended to be pilots, scientists, engineers, and doctors.

Back then, crews were also carefully selected by a committee of government experts. “Later on, novelist Tom Wolfe famously described what set these astronauts apart as ‘the right stuff’- essentially skill, bravery, and ego,” Bimm said.

But to get to space today, you simply need the “right funds” to buy a ticket, according to Bimm. Or “as we saw in the case of Oliver Daemen and Mark Bezos, the right family to buy a ticket for you.”

Bimm added: “The flight was exciting to watch but also raises key questions about the future: what, and more to the point, who is space for? Soldiers, scientists, and now the wealthy.”

There are many unanswered questions about how accessible space travel really is but according to Brown, “space billionaires are only broadening space access to space millionaires.” He said the access they provide is “limited to a couple of minutes of floating.”

Matthew Hersch, a historian of aerospace technology at Harvard University, said that although the invention of commercial space travel is great, demand from ordinary people seems low.

“We haven’t seen evidence that demand for space launch services is elastic enough to support selling launch services to average people, even if they can be offered cheaply enough,” Hersch added.

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Warren Buffett won’t be following Jeff Bezos and Richard Branson into space – he ruled out a rocket trip 25 years ago

Warren Buffett
Warren Buffett.

  • Warren Buffett won’t be following Jeff Bezos or Richard Branson into space.
  • The investor once said he admired space explorers but had no desire to board a rocket himself.
  • Buffett joked he would charge less to insure Elon Musk’s Mars mission if Musk was on board.
  • See more stories on Insider’s business page.

Amazon’s Jeff Bezos and Virgin’s Richard Branson blasted themselves into space this month, while SpaceX CEO Elon Musk’s grand vision is colonizing Mars. Warren Buffett doesn’t share his fellow billionaires’ passion for interstellar travel – he ruled out leaving Earth 25 years ago.

Buffett – who made his fortune investing in staid companies like Coca-Cola and Gillette – takes the same approach to fast-changing businesses and industries as he does to extraterrestrial voyages, he said in his 1996 letter to Berkshire Hathaway shareholders.

“As investors, our reaction to a fermenting industry is much like our attitude toward space exploration: We applaud the endeavor but prefer to skip the ride,” Buffett said.

The 90-year-old investor clearly has zero interest in planning a trip to space. However, he found it a useful analogy to underscore the problem of a ballooning global population on a planet with limited resources during Berkshire’s shareholder meeting in 2002.

“If you were going to go on a spaceship for a hundred years and you knew in the back of the spaceship there were a lot of provisions, but you didn’t know exactly how much – in terms of filling the front of the spaceship with a given number of people, you would probably err on the low side,” Buffett said.

The Berkshire chief argued that if the exact amount of provisions and the precise timing of the spaceship’s return were unclear, it would make sense to be conservative with passenger numbers and reduce the risk of mass starvation.

“We are in a vehicle called Earth,” Buffett continued. “We don’t know its carrying capacity. We have learned that it’s a lot larger than might have been thought by Malthus or somebody a few hundred years ago, but that doesn’t mean it’s infinite at all.”

Buffett returned to the subject of space at Berkshire’s annual meeting this year. When an audience member asked if Berkshire would insure Musk’s mission to Mars, the investor quipped that he would charge a lower premium if the Tesla CEO was on the spaceship.

“I would probably have a somewhat different rate if Elon was on board or not on board,” he said. “It makes a difference. If somebody is asking you to insure something, that’s called getting skin in the game.”

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