Richest man in history

Amazon founder Jeff Bezos is now the richest person in history. On January 8^th 2018, Bezos net worth reached $105.1 billion. He has replaced the old record, which was held by entrepreneur Bill Gates whose net worth had surpassed $100 billion in 1999.

Background

Amazon is an American electronic commerce and cloud computing company that was founded on July 5, 1994. It started as an online bookstore and later diversified to sell various commodities like electrical appliances and apparel. Today, it also produces consumer electronics like the Kindle e-Readers, tablets and more. It’s market value had exceeded $500 billion by July 2017.

Amazon posted earnings for the second quarter of 2017 that fell dramatically short of investor expectations, even as the ecommerce giant boosted revenue 25%. Net sales roles to $38.0 billion in the second quarter. The tech giant reported $43.7 billion in earnings in 2017. This beat market expectations considerably as investors projected earnings of $42.1 billion. The Amazon sales leaped by 34 percent over the previous quarter.

Despite Amazon's sales growth, the firm's profits were nearly flat in 2017. This is because as it ploughed money into tech gadgets, streaming video, data centres and warehouses to support its growing empire. The firm said profits in the three months to the end of September were $256m, up from $252m in 2016. Chief executive Jeff Bezos said the Amazon sales increase was in part down to the growing demand for the firm's smart home products. He said, “In the last month alone, we've launched five new Alexa-enabled devices, introduced Alexa in India, announced integration with BMW, surpassed 25,000 skills, integrated Alexa with Sonos speakers, taught Alexa to distinguish between two voices, and more.”

Jeffrey Preston Bezos is the founder, chairman, and chief executive officer of Amazon.com.

Analysis

Amazon founder Jeff Bezos is now the richest person in history. On January 8^th 2018, Bezos net worth reached $105.1 billion. He has replaced the old record, which was held by entrepreneur Bill Gates whose net worth had surpassed $100 billion in 1999.

It should be noted that if Gates’ net worth was adjusted for inflation then his net worth in 1999 would be worth about $147 billion today. Some reporters have also suggested that Russian President Vladimir Putin is probably worth more than Bezos currently but there are no metrics to track the leader’s net worth. Thus, it should be noted that of all people whose wealth is publicly traceable, Bezos is the richest among them. Bezos has been hailed by many for overcoming many obstacles in becoming one of the most successful entrepreneurs in the world. He was born the son of a 16-year-old mom and a deadbeat father.

Majority of Bezos’ net worth comes from the 78.9 million shares of Amazon stock he owns. Shares of Amazon (AMZN) climbed 1.4% Monday, adding about $1.4 billion to his wealth. Shares of Amazon (AMZN) are up nearly 7% so far in this year after rising 56% in 2017.

Bill Gates, the second richest man in the world is now worth $91.9 billion according to Forbes, and $93.3 billion by Bloomberg. Analysts have pointed out that Gates would have been richer than Bezos but has continued to pour millions of dollars towards philanthropic efforts. But even without adjusting for inflation, Gates would still be worth more than Bezos if not for his significant charitable contributions. Based on the publicly disclosed donations, it has been revealed that Gates has given away 700 million shares of Microsoft. These are worth $61.8 billion at today's value. He has also donated $2.9 billion in cash. This would have put his net worth over $150 billion.

A study in 2017 revealed that the world’s richest 1% own half the world’s wealth. It also highlighted the growing gap between the super-rich and everyone else. The world’s richest people have seen their share of the globe’s total wealth increase from 42.5% at the height of the 2008 financial crisis to 50.1% in 2017, or $140tn (£106tn), according to Credit Suisse’s global wealth report published on Tuesday.

“The share of the top 1% has been on an upward path ever since [the crisis], passing the 2000 level in 2013 and achieving new peaks every year thereafter,” the annual report said. The bank said “global wealth inequality has certainly been high and rising in the post-crisis period”.

Assessment

Our assessment is that Bezos meteoric rise is indicative of his vision and drive that came from founding Amazon. The company has continued to perform better than projected estimations and the shares have risen exponentially in 2017. However, the extreme wealth being amassed by the richest of the rich also points towards a troubling trend – the rise in wealth gap between the super wealthy and the rest of the world. In India, the richest 10 per cent holds 370 times the share of wealth that it’s poorest hold. This must be addressed.