Jeff Bezos Net Worth

Who is Jeff Bezos?

 

 

 

 

 

 

 

 

To many people, the name “Jeff Bezos” is synonymous with the company he founded, Amazon.com.  Indeed, his ownership in the company has contributed greatly to securing him the top spot on Forbes’ 2021 World’s Billionaires List.  Few people are aware that he also owns other companies and additional assets that add to his bulging net worth figure.  This article will include them in discussing Bezos’ net worth and his journey to becoming the richest man in the world.

Background

Originally named Jeffrey Preston Jergensen, Bezos was born on January 12, 1964, in Albuquerque, New Mexico to Jacklyn (née Gise) and Theodore Jergensen.  Unfortunately, the marriage ended in divorce, and in 1968, his mother married Miguel (Mike) Bezos, a Cuban immigrant.  Mike adopted the four-year-old, legally changing his surname to Bezos at the same time.  Upon graduating from the University of New Mexico, Jeff’s adoptive father was hired to be an engineer by Exxon, and the family moved to Houston, where Jeff attended River Oaks Elementary School.  During his high school years, his family relocated to Florida, and Jeff attended Miami Palmetto High School.  He was an excellent student, with an aptitude for science, and participated in the Student Science Training Program at the University of Florida while in high school.  He was a National Merit Scholar and, in 1982, received the prestigious Silver Knight Award, one of the nation’s most noteworthy student awards, whose recipients are selected based on superior grades, service, and talent.  As valedictorian of his class, he was one of the graduation speakers.  In his speech, Bezos spoke of his dream for the colonization of space, a dream that he is currently working to fulfill with one of the companies he owns.

Bezos went on to attend Princeton University, where he was inducted into the Phi Beta Kappa and Tau Beta Pi academic honor societies.  He was a member of the Quadrangle Club and also served as president of the Princeton chapter of the Students for Exploration and Development of Space (SEDS). He graduated summa cum laude in 1986, with a Bachelor of Science degree in electrical engineering and computer science.

 Career

Upon graduation, Bezos had job offers from numerous big-name companies, including Intel, Andersen Consulting, and Bell Labs. He declined those in favor of working at Fitel, a financial technology telecommunications start-up, where one of his projects involved building a network for international trade. A couple of years later, he quit Fitel to work as a product manager at Bankers Trust, and two years after that, he joined D.E. Shaw & Company, an investment management company founded in 1988 that utilizes mathematical models in determining its investment strategies.  He quickly rose to the position of senior vice-president of the company at the very young age of 30.  It was here that he met his future wife, MacKenzie Tuttle, a research associate at the company. His work at D.E. Shaw also shaped his future in another important way:  he was tasked with studying the aspects of the newly-emerging internet and assessing the investment possibilities associated with it.  In doing so, he recognized the internet’s enormous potential, which sparked his entrepreneurial spirit.  That spark led to the founding of Amazon, now one of the largest online retailers in the world.

Amazon

Bezos developed his business plan for an online book store and traveled from New York City to Seattle, Washington with wife MacKenzie Bezos after resigning from D.E. Shaw and Company.  Amazon.com was officially born on July 5, 1994, in Bezos’ garage in Seattle, with the help of his wife, a few employees, an estimated $300,000 investment by his parents, and other investments from friends and former associates.  To his credit, Bezos warned his early investors that the company had a 70% chance of failing.  

In July 1995, Amazon.com sold its first book. By the end of 1998, Bezos had expanded into selling music and videos and a variety of other consumer products on the Amazon website.  Clothing was added to the site in the fall of 2002. Amazon Web Services (AWS), a subsidiary of Amazon, was also created in 2002 to compile data from weather channels and website traffic. In 2006, AWS was expanded to provide cloud computing platforms to individual users, as well as governments and other companies. The year 2007 saw the advent of Amazon’s Kindle, a mobile electronic book reader with internet connectivity. Amazon Studios was founded in 2010, enabling Amazon to create its own original movies and TV shows to compete with other streaming services, such as Netflix.  AmazonFresh, another subsidiary of Amazon, enables members of Amazon’s Prime program to order groceries online for same-day delivery in many cases.  The company acquired Whole Foods for $13.7 billion in August 2017, expanding its position in the grocery industry, and in February 2018, Amazon launched its proprietary over-the-counter drug brand. 

By the end of 2020, Amazon had 503 million shares outstanding.  Sadly, Jeff and MacKenzie divorced in April 2019, after a 25-year marriage that produced three sons.  They are also the parents of a daughter they adopted from China.  Together, the couple owns 70,616,270, or 14%, of the outstanding shares of Amazon.  According to the divorce agreement, Jeff retains the voting rights for all 70,616,270 shares, but owns only 53,212,046 shares (10.5%) of Amazon for their investment value (e.g., price appreciation and any dividends that the company might pay). MacKenzie enjoys the investment value of the remaining 17,404,224 shares. 

Blue Origin

Bezos’ consumer-centric focus and continuously forward-looking, innovative spirit are obvious drivers of Amazon’s sustained success as one of the world’s top online retailers, but, as alluded to earlier, Amazon is only one of Bezos’ business ventures.  Blue Origin is another of his companies. Founded in 2002, this aerospace company designs rockets for commercial use, perhaps with the underlying mission to fulfill the valedictorian’s stated dream for the colonization of space.  In December 2017, its New Shepard vehicle conducted a successful flight carrying dummy passengers. On May 5, 2021, the company announced that it will begin selling tickets for its first space tourism flight, which is scheduled to take place on July 20th. New Shepard can transport as many as six people on a ride beyond the edge of space, reaching an altitude of more than 340,000 feet, assuming the results of previous test rides can be achieved.  The company is conducting an online auction for one of the seats on this flight.  If you have money to burn, you can enter your bid on Blue Origin’s website.  The auction will conclude on June 12, 2021. The winning bid amount will be donated to Club for the Future, a foundation Blue Origin created to “inspire future generations to pursue careers in STEM and help invent the future of life in space.”

The Washington Post

Bezos purchased The Washington Post in 2013 for $250 million, and while no financial data is available since it is privately held, reports are that the newspaper has added numerous new employees and digital subscribers since Bezos bought it.

Given all his successes, it is no wonder that Bezos was named Time’s Person of the Year in 1999 and Fortune’s Businessperson for 2012.

Bezos’ Income and Expenditures

Bezos has served as Chairman of the Board for Amazon since the company’s inception in 1994 and took on the title of CEO in May 1996.  For his work, Bezos has drawn a salary of just $81,840 from Amazon for the past several years, and a lesser amount prior to that.  He has opted to take no cash bonuses and receives no stock-based compensation.  The company’s financial information assigns another $1.6 million as “additional compensation,” but this is the annual amount that the company pays for security arrangements for Mr. Bezos.  It is not part of his income.  It is apparent that Blue Origin has not yet generated a profit for him although it seems poised to do so in the near future.  There is no publicly available information on any income he might garner from his ownership of The Washington Post, but if he earns anything from that investment, it is likely a negligible amount.

So, how, you might ask, does someone who earns only $81,840 a year become the richest man in the world?  It’s mostly due to the increase in the value of Amazon’s stock.  When Bezos sells some of the Amazon shares he owns, he generates capital gain income, which, by the way, is currently taxed at a significantly lower rate than wage and salary income.  In May 2016, Bezos sold a little more than a million of his shares in the company for $671 million.  Later that year, in August 2016, he sold another million shares for $756.7 million.  Even so, less than two years later, in January 2018, his remaining shares were worth more than $109 billion.  He sold more stock a few months into 2018 to invest in other assets.

How much does Jeff Bezos make a year? 

Thus, we might estimate Bezos’ true annual earnings by considering the price appreciation of Amazon’s stock over the course of a year.  On January 2, 2020, Amazon opened at $1,875 per share. As mentioned earlier, Jeff Bezos owns 53,212,046 shares of Amazon. Multiplying the shares he owns by the price per share, we find that his holdings of Amazon were worth $99,772,586,250 at the beginning of the first day of trading in 2020.  At the close of the last day of trading, the stock was selling for $3,285.85 a share.  Multiplying 53,212,046 by $3,285.85, we find that the value of his shares at the end of the year was $174,846,801,349. That’s a gain of $75,074,215,099 for the year.  Adding this to his annual salary of $81,840, Bezos earned $75,074,296,939 in 2020.

How much does Jeff Bezos earn in a day? An hour? A minute? A second?

To put this in perspective, let’s consider what this annual amount translates to when thinking about how much he earned in a day, an hour, a minute, and a second in 2020.  Since there are 365 days in a year, we simply divide $75,074,296,939 by 365 and discover that Bezos earned an average of $205,683,005 a day in 2020.  Dividing this by 24 hours in a day, we find that this translates to approximately $8,570,125 an hour.  Dividing by 60 minutes in an hour, we get an average income per minute of $142,835—more than many people make in a year! And dividing once again by 60 seconds in a minute, we determine that Bezos’ average income per second was approximately $2,381 in 2020.

Of course, this paints matters with a very broad brush since the stock price of Amazon is very volatile, relatively speaking, and has been known to increase—or decrease—by over $100 a share on some days.  Nevertheless, it is illuminating.

Expenditures

As alluded to earlier, Bezos has tended to invest a lot of the money he has received from the sale of his Amazon stock in other endeavors, such as Blue Origin and The Washington Post.  He also founded Bezos Expeditions, an investments company through which he makes his personal investments. He was one of the initial shareholders in Google and has historically favored healthcare and biotech companies as well.  He isn’t one for owning a collection of the newest, flashiest cars, but he does own his own private jet. And he has amassed a real estate portfolio with a market value of over $500 million dollars, including properties in New York City; Washington, D.C.; Beverly Hills, California; and Medina, Washington.  He also owns the Corn Ranch in west Texas.  

Philanthropy

Bezos directs a portion of his money to philanthropic efforts, sometimes via direct donations and other times through Bezos Expeditions, which has funded numerous non-profit projects.  Not surprisingly, these projects tend to be focused on the scientific sector, such as the creation of an Innovation Center at the Seattle Museum of History and Industry and the recovery of two Saturn V first-stage Rocketdyne engines from the floor of the Atlantic Ocean. They belonged to the Apollo 11 July 1969 mission’s S-1C stage and are now on display in the Seattle Museum of Flight.

Bezos also established a Day 1 Families’ Fund through which he presents leadership awards to civic groups and other organizations performing “compassionate, needle-moving work to provide shelter and hunger support to address the immediate needs of young families.” In 2020, Bezos donated $100 million to Feeding America and an estimated $25 million for All in WA, a relief program for the state of Washington.

Jeff Bezos Net Worth

At the beginning of this article, we asserted that “. . . the name Jeff Bezos” is synonymous with the company he founded, Amazon.com.” Evidence of this is obvious in the estimates of Bezos’ net worth from various public sources.  Net worth is equal to the total value of the assets a person owns minus the total value of debt he owes. However, if we simply take the price per share of Amazon’s stock at the point in time given for the estimate and multiply it by the number of shares Bezos controls, that source’s estimate of his net worth is miraculously close to the result we get. In actuality, though, only the number of shares he owns for their investment value should be used in determining his net worth since he only has voting rights for the other shares he controls.  The investment value of those other shares is part of MacKenzie’s net worth. Too, net worth estimates based solely on the value of his Amazon stock ignore the value of all the other assets he owns as well as any debt he has.  Bezos’ net worth may be greater than those estimates—or not, depending on the day. At the close of the trading day on May 4, 2021, Amazon’s stock price was $3,311.87 per share.  Multiplying this by the 53,212,046 shares he owns for their investment value, we get $176,231,378,786, or approximately $176 billion, which is less than a fairly recent net worth estimate of $200 billion due to the fact that Amazon’s stock price has taken a deep dive since that last estimate was published.  Still, the $176 billion figure ignores the market values of his $500+ million-dollar real estate portfolio, his personal jet, The Washington Post, Blue Origin, and other personal investments. It also ignores any debts Bezos may have, which would need to be subtracted from the total, but the founder of Amazon.com has a reputation for frugality, so one might expect his personal debt obligations would be low.

Current Contact Information for Jeff Bezos

As mentioned earlier, Jeff Bezos is currently both Chairman of the Board and CEO of Amazon.  However, he has announced that he plans to transition to the position of “Executive Chair” in the third quarter of 2021. Bezos has a presence on both Instagram and Twitter.  His Twitter handle is https://twitter.com/jeffbezos and his Instagram handle is similar: https://instagram.com/jeffbezos.  He can also be reached at jeff@amazon.com or via telephone at 206-266-1000. 

Jeff Bezos

Age 57
Birthplace Albuquerque, New Mexico
Current location Medina, Washington
Education Princeton University: Bachelor of Science in electrical engineering and computer science
Occupation Entrepreneur
Employer CEO and founder of Amazon.com
Relationship status Divorced; in a relationship
Net worth Greater than $190 billion
Height 5’ 7 1/2
Weight 154 pounds
Last updated May 5, 2021

 

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