It’s official: Elon Musk is on track to become the world’s first trillionaire.
Tesla shareholders approved a new executive pay package Thursday afternoon that would give Musk nearly $1 trillion in stock over the next decade, a record-shattering deal for the world’s richest man.
The total award depends on whether Musk can meet ambitious performance targets for the struggling electric-vehicle company, including growing Tesla’s market cap to $8.5 trillion—a more than 500% increase from today’s valuation. The goals also include delivery of 20 million Tesla vehicles and 1 million bots in addition to 1 million robotaxis in commercial operation.
“While we believe Elon is the only person capable of leading Tesla at this critical inflection point, changing the world is neither an overnight process nor the work of a single person,” Tesla’s Board wrote in a letter to shareholders in August. “So, we also want your help in securing the team and strategy needed to achieve goals that others will perceive as impossible but that we know are possible for Tesla.”
Musk’s net worth is estimated at about $473 billion.
Reining Musk back in
If all goes to plan, Musk’s stake in Tesla will rise from about 13% to nearly 29%—a level of control he’s long sought.
Having voting control in the “mid-20s” percent range would help secure a “strong influence,” but gives shareholders enough control to fire him if he goes “insane,” Musk said during Tesla’s earnings call last month.
“It’s called compensation, but it’s not like I’m going to go spend the money,” Musk added. “It’s just, if we build this robot army, do I have at least a strong influence over that robot army, not current control, but a strong influence? That’s what it comes down to in a nutshell. I don’t feel comfortable wielding that robot army if I don’t have at least a strong influence.”
Tesla’s stock fell as much as 43% between January and March as Musk devoted much of his time to leading the Department of Government Efficiency (DOGE). Since stepping back, shares have recovered to being up 16% year-to-date.
Many shareholders hope the new incentives will keep Musk focused on Tesla.
Ron Baron, the founder and CEO of Baron Capital, which holds a 0.39% stake in Tesla, said in a post on X that he supported the plan because without Musk, Tesla wouldn’t exist.
“Elon is the ultimate ‘key man’ of key man risk,” Baron wrote. “Without his relentless drive and uncompromising standards, there would be no Tesla.”
From Pope Leo to Norway’s sovereign wealth fund, Musk’s pay package had its haters
Not every Tesla investor was on board with the extravagant deal.
Glass Lewis and ISS, two proxy advisory services, urged Tesla shareholders to vote against the proposal, with the latter group citing “unmitigated concerns” with its magnitude and design. Musk then fired back during Tesla’s October earnings call, calling them “corporate terrorists.”
Meanwhile, Norges Bank Investment Management, the group behind Norway’s $2 trillion sovereign wealth fund which holds a 1.14% stake in Tesla, said it voted against the pay package.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk — consistent with our views on executive compensation,” the group said in a statement this week.
Pope Leo XIV, though not a Tesla investor, also recently expressed his concern for the message sent by Musk becoming a trillionaire—and the growing divide between the rich and the poor.
“CEOs that 60 years ago might have been making four to six times more than what the workers are receiving, the last figure I saw, it’s 600 times more than what average workers are receiving,” the pontiff told Catholic news site Crux in an interview released in September.
“Yesterday, the news that Elon Musk is going to be the first trillionaire in the world: What does that mean and what’s that about? If that is the only thing that has value anymore, then we’re in big trouble.”
A recent report from Oxfam found that the 10 richest Americans—which include Musk as well as Oracle cofounder Larry Ellison, Amazon cofounder Jeff Bezos, and Meta CEO Mark Zuckerberg—gained $69.8 billion over the past year. That’s 833,631 times more than what the typical American household takes home.
While Musk still trails John D. Rockefeller’s $630 billion inflation-adjusted fortune, hitting his new performance targets could make him the richest person in modern history.
Don’t cry because you’re not going to Aspen this year, smile because a ski family might avoid paying some taxes by flying there privately. Bloomberg reported yesterday that ultra-wealthy Americans are taking full advantage of a new rule in the One Big Beautiful Bill Act that allows them to completely write off certain high-value assets.
ICYMI: President Trump’s landmark legislation expanded a tax break known as bonus depreciation, which now lets business owners deduct 100% of certain purchases from their taxable income. Eligible splurges include yachts, cars, racehorses, and private jets—as long as they’re used for business more than half of the time. Demand is climbing:
Sales of private jets are up by 11% from this time last year, according to data from the jet broker Global Charter.
Horse sales at the world’s largest thoroughbred auction in Kentucky grew by 24% last month compared to 2024.
Gas stations and car washes also qualify. Sales of these establishments spiked after Trump temporarily expanded bonus depreciation in 2017. One entrepreneur told Bloomberg that he avoided millions of dollars in taxes by buying several car washes, which offset income from the sale of his family business.
Looking ahead…this rule will cost the IRS $363 billion in lost revenue over the next decade, according to estimates by Congress’s Joint Committee on Taxation.—ML
GoFundMe’s CEO just said the quiet part out loud: in this economy, more Americans are crowdfunding groceries to get by.
The head of GoFundMe, Tim Cadogan, told Yahoo! Finance the economy is so challenged that more Americans are raising money to buy food—an arresting data point that captures the widening gap between household budgets and basic needs.
In a recent interview on the Opening Bid Unfiltered podcast with Brian Sozzi, he described a notable rise in campaigns for essentials like groceries, a shift from one-off emergencies toward everyday survival.
“Basic things you need to get through life [have] gone up significantly in the last three years in practically all our markets,” Cadogan said.
That evolution underscores the new economic reality for many Americans: persistent inflation, higher borrowing costs, and thin financial cushions are forcing many households to triage bills, juggle debt, and seek help in new ways.
Groceries as the new emergency
Cadogan’s observation—that more people are asking strangers to help pay for staples—marks a sobering turn for a platform historically associated with medical bills, disaster relief, and community projects. When the cost of food stretches paychecks past the breaking point, crowdfunding morphs from altruism to a parallel safety net.
In previous Fortune coverage of inflation’s long tail, consumers’ coping tactics have included trading down brands, shrinking baskets, delaying car repairs, and leaning on credit cards. The shift Cadogan describes suggests those tactics have run out of runway for a growing slice of the country, especially younger and lower-income households who rent, commute, and carry variable-rate debt.
The inflation aftershock
Even as headline inflation cools from its peak, elevated price levels remain embedded in household budgets. Fortune has tracked how cumulative inflation, not just the monthly prints, weighs on families. For instance, groceries cost more than they did two or three years ago, rents have reset higher, and child care is straining paychecks.
Wage gains helped many workers, but unevenly and often after costs had already jumped. For families without savings buffers, a higher cost baseline is the real story. That backdrop explains why an uptick in grocery campaigns on GoFundMe isn’t a curiosity—it’s a barometer of the current economy.
The credit crunch at the kitchen table
Household balance sheets have been whipsawed by stubbornly high prices on necessities as well as steeper borrowing costs on credit cards and auto loans. Fortune’s reporting has highlighted rising delinquency rates among younger borrowers and the squeeze from student loan repayments resuming after a long pause. For some, the social capital of friends, community groups, and online donors now substitutes for financial capital. Crowdfunding groceries is a last-mile solution in a system where wages, benefits, and public supports haven’t fully bridged the gap.
The Great Wealth Transfer meets a giving plateau
Cadogan also frames this moment as an opportunity: the U.S. is entering a historic wealth transfer as baby boomers pass tens of trillions to heirs and philanthropy. Yet overall charitable giving as a share of GDP has struggled to break out sustainably above roughly 2%. A central challenge is converting private balance-sheet strength into public generosity at scale. Fortune has explored the paradox of robust asset markets—fueled by equities, real estate, and private investments—coexisting with widespread financial insecurity. The wealth transfer could amplify that divergence or narrow it, depending on whether inheritors and living donors commit to more dynamic, needs-based giving.
Gen Z, millennials, and a new donor thesis
The GoFundMe CEO hopes younger donors, who are often more values-driven, digitally native, and community-oriented, will push giving higher and faster.
These cohorts already power mutual aid networks and micro-giving online; the question is whether that instinct can scale beyond one-off campaigns to sustained support for food security, housing stability, and local services.
If employer matching, donor-advised vehicles, and purpose-built funds become easier to use—and if transparency and immediacy remain high—small-dollar giving could compound into a measurable macro effect.
What comes next
Many Americans remain one shock away from going into arrears. More GoFundMe campaigns for groceries fits that narrative and raises a challenge to wealth holders on the cusp of inheritance decisions.
If the wealth transfer is the economic story of the decade, the generosity transfer might be its moral counterpart. Whether giving can rise meaningfully above its long-running share of the economy will hinge on channeling today’s empathy into tomorrow’s infrastructure, so that no one needs to pass the hat to put food on the table.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
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The IRS has set the 2026 tax brackets and standard deductions, keeping seven rates in place while shifting the income thresholds upward to account for inflation and to reflect changes enacted in the One Big Beautiful Bill Act, meaning many paychecks will see modest relief in 2026 and the top rate still bites only above very high incomes.
For most households, the standard deduction rises again, which will reduce taxable income before the brackets even apply, and high earners will continue to face a 37% top rate but at slightly higher income thresholds than in 2025.
The 2026 brackets
For 2026, the tax rates remain 10%, 12%, 22%, 24%, 32%, 35%, and 37%, with inflation-adjusted thresholds that determine how much income is taxed at each rate rather than taxing all income at a single rate.
Single filers reach the 12% bracket above $12,400, 22% above $50,400, 24% above $105,700, 32% above $201,775, 35% above $256,225, and the top 37% rate above $640,600 in 2026.
The corresponding married filing jointly thresholds are $24,800, $100,800, $211,400, $403,550, $512,450, and $768,700.
These thresholds rise to reduce bracket creep as prices and wages move, and press coverage pegs the broad pattern as roughly 4% increases for lower brackets and around 2% to 3% at higher levels compared with 2025, a common feature of the IRS’ annual inflation process.
Standard deduction changes
The standard deduction for 2026 is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household, reflecting both routine inflation indexing and specific changes embedded in the new law.
The law also bumped the 2025 standard deduction to $15,750 for single filers and $31,500 for joint filers—an increase that carries into the 2026 baseline—before the new 2026 figures take effect on returns filed in 2027
What it means for the average household
Most workers will see a small reduction in taxable income due to the higher standard deduction, and more of their pay will be taxed in lower brackets thanks to the shifted thresholds, which together help offset inflation’s push into higher nominal incomes.
The changes are designed to keep taxpayers from drifting into higher rates without real after-inflation income gains, so annual bracket adjustments typically translate into a modest paycheck boost or a slightly smaller tax bill at filing time.
What it means for high earners
The top marginal rate stays at 37% but begins at higher income levels—above $640,600 for single filers and $768,700 for joint filers—so high earners also benefit from bracket shifts, albeit modestly compared with their overall liability.
Beyond ordinary income, OBBBA made permanent several TCJA-era features that matter to affluent taxpayers, and it extended and reshaped other provisions, interacting with estate planning and high-bracket itemized deduction limits in ways that call for fresh planning.
Estate and wealth-transfer context
OBBBA permanently sets the federal estate and gift tax exemption at $15 million per person beginning in 2026, indexed to inflation, a significant change from the prior scheduled reversion that stabilizes long-horizon wealth planning for families with large estates.
That permanence creates durable room for transfers into trusts and other structures while aligning with the 2026 bracket landscape, making 2026 a key year to revisit estate strategies and potential gifting windows.
‘Sugar high’ risk
Fortunepreviously detailed how OBBBA cements TCJA-era individual rate architecture and boosts the standard deduction in 2025, framing the law’s household-level impact and distributional tilt as favoring higher earners according to independent modeling cited in our reporting.
Budget watchdogs have highlighted broader fiscal implications and the bill’s “sugar high” risk, linking tax cuts and spending choices to debt trajectories and future policy trade-offs that shape the 2026 tax bracket environment.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
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Peter Thiel, PayPal’s first CEO, turned his fintech fortune into a far-reaching empire of influence spanning venture capital, politics and power. Marco Bello/Getty Images
In 2007, Fortune magazine reimagined a classic mafia scene with a Silicon Valley twist: 13 male founders and early employees of PayPal, all long gone from the company, posed at a San Francisco café with slicked-back hair, poker chips and dozens of whiskey glasses. The crowd included some of the most recognizable names in today’s tech scene, like Elon Musk, Peter Thiel and Reid Hoffman. The magazine dubbed them the “PayPal mafia,” not for their time at the fintech company, but for their outsized impact on Silicon Valley through the companies they launched afterward.
PayPal went public in early 2002 and was acquired by eBay for $1.5 billion the same year. Most of its early employees left the company after the acquisition. They went on to found YouTube, SpaceX and LinkedIn, among other legendary names in Silicon Valley. However, like their cinematic namesake, the group hasn’t avoided controversy. These former colleagues have built billion-dollar businesses while also finding themselves in the crosshairs of public criticism.
For instance, Thiel has faced controversy over his political affiliations and, most notably, for funding Hulk Hogan’s 2012 lawsuit against Gawker Media with $10 million — a case that ultimately drove the online media company into bankruptcy. Musk has also faced criticism for his takeover of Twitter and his prior role in the Trump administration, where he led widespread federal employee firings.
Here’s what they are up to these days:
Peter Thiel: venture capitalist
Peter Thiel. Marco Bello/Getty Images
Peter Thiel, Max Levchin and Luke Nosek founded PayPal in 1998, originally as a software security company. After merging with Elon Musk’s X.com (unrelated to the social media platform he owns today), PayPal shifted its focus to digital payments.
Thiel served as CEO from 1998 until 2002, leaving after the company was sold to eBay. He then co-founded Palantir Technologies, a major U.S. government contractor providing data analytics services. The company now has a market capitalization of $439 billion.
Thiel is also known as a prolific angel investor. He co-founded Clarium Capital, Founders Fund, Valar Ventures and Mithril Capital. In 2004, Thiel became Facebook’s first outside investor after acquiring a 10.2 percent stake in the company for $500,000.
Thiel is among the many former PayPal employees who have entered political and high-profile public arenas. An active donor to the Republican Party, Thiel supported Donald Trump’s 2016 presidential campaign but withheld donations during the 2024 election. He is also credited with helping JD Vance reach the Vice Presidential ticket.
Elon Musk: entrepreneur, the world’s richest person
Elon Musk. Kevin Dietsch/Getty Images
Elon Musk briefly served as PayPal’s CEO before being ousted by the board in 2000. He went on to build one of the most influential portfolios in technology, spanning electric vehicles, space exploration, social media and A.I.
Musk founded SpaceX in 2002 and has led Tesla since 2008. He also founded Neuralink and The Boring Company, expanding his reach into brain-computer interfaces and infrastructure. In 2022, Musk gained global attention for acquiring Twitter for $44 billion, later rebranding it as X.
His ties to A.I. run deep: Musk co-founded OpenAI with Sam Altman in 2015 but left in 2018 over strategic disagreements. In 2023, he returned to the field by launching xAI, a research venture focused on building A.I. that is more understandable for humans.
Today, Musk is the richest person in the world, with an estimated net worth of $400 billion. He is also perhaps the only PayPal alumnus to ascend into direct political influence. During the Trump administration, he led the Department of Government Efficiency (DOGE)—a name shared with his cryptocurrency venture—before stepping down in May after clashing publicly with the President.
Max Levchin: computer scientist
Max Levchin. John Lamparski/Getty Images
Position at PayPal: co-founder, chief technology officer from 1998 to 2002
As PayPal’s chief technology officer, Max Levchin helped lead the company’s anti-fraud efforts by co-creating the Gausebeck-Levchin test—the foundation for the widely used CAPTCHA security tool. After leaving PayPal, he launched the media-sharing platform Slide in 2004, which was acquired by Google in 2010. Levchin briefly served as Google’s vice president of engineering until Slide was shut down the following year.
In 2012, he co-founded Affirm, a leading “buy now, pay later” (BNPL) company, where he continues to serve as CEO. Today, Affirm has a market capitalization of $27.5 billion, with 21.9 million consumers and more than 350,000 merchant partners on its platform.
Levchin has also held board positions at Yahoo and Yelp. In 2015, he became the first Silicon Valley executive appointed to the U.S. Consumer Financial Protection Bureau’s advisory board, emphasizing the importance of collaboration between companies and regulators.
Reid Hoffman: entrepreneur, investor
Reid Hoffman. Kimberly White/Getty Images for WIRED
Before joining PayPal, Hoffman worked as a senior user experience architect at Apple, contributing to the company’s online social network eWorld. He later became director of product management at Fujitsu. After his online dating startup, SocialNet, folded, Hoffman joined PayPal in 2000 as chief operating officer.
In 2003, he co-founded the career networking site LinkedIn. Following Microsoft’s $26.2 billion acquisition of LinkedIn in 2017, Hoffman joined Microsoft’s board, a move that greatly increased his wealth.
Over the years, Hoffman has served on the boards of Airbnb and OpenAI, where he was also an early investor. Through the venture capital firm Greylock Partners, he has backed dozens of A.I. startups. In 2022, he co-founded Inflection AI with Mustafa Suleyman, who now serves as CEO. Earlier this year, he teamed up with cancer researcher Siddhartha Mukherjee to launch Manas AI, a startup focused on drug discovery.
David Sacks: investor, White House A.I. and Crypto Czar
David Sacks currently serves as the White House A.I. and Crypto Czar. JC Olivera/Variety via Getty Images
Position at PayPal: chief operating officer from 1999 to 2002
Since leaving PayPal, David Sacks has built a career spanning film, tech, investing and politics. In 2005, he produced and financed a political satire that earned two Golden Globe nominations. The following year, he founded Geni.com, a genealogy-focused social network that later spun off Yammer, one of the earliest enterprise social networking platforms. He went on to co-found Craft Ventures, the startup Glue, and the podcast platform Callin.
Jeremy Stoppelman joined Musk’s X.com in 1999 and became vice president of engineering after its transition to PayPal. In 2004, he co-founded Yelp, where he has served as CEO ever since. Under his leadership, the company turned down a 2010 acquisition offer from Google and went public two years later. Stoppelman’s net worth is estimated at more than $100 million.
Ken Howery: investor, U.S. ambassador
Position at PayPal: chief financial officer from 1998 to 2002
Ken Howery served as PayPal’s chief financial officer from 1998 to 2002. After PayPal’s sale to eBay, he became eBay’s director of corporate development until 2003. He later joined Peter Thiel at Clarium Capital as vice president of private equity and went on to co-found Founders Fund as a partner. Beyond investing, he is a member of the Explorers Club, a nonprofit dedicated to scientific exploration, and an advisor to Kiva, the micro-lending nonprofit founded by former PayPal colleague Premal Shah.
Howery is also among the former PayPal executives who have moved into politics. He has donated at least $1 million to Donald Trump’s campaign through Elon Musk’s political action committee. During Trump’s first term, Howery was appointed U.S. ambassador to Sweden and today serves as the U.S. ambassador to Denmark.
Roeloth Botha: venture capitalist
Roelof Botha joined PayPal as director of corporate development shortly before graduating from Stanford University. He later became vice president of finance and went on to serve as chief financial officer until the company’s acquisition by eBay.
Position at PayPal: software architect from 1998 to 2003
Companies later founded: Yelp, Learnirvana
Russel Simmons helped design PayPal’s payment system as a software architect. After leaving the company, he and fellow PayPal alum Jeremy Stoppelman set out to build a platform for restaurant reviews. With a $1 million investment from Max Levchin, they launched Yelp in July 2004. Simmons served as chief technology officer until his departure in 2010. At the time, Yelp said he would remain a “significant” shareholder, though the size of his stake—and whether he still holds it—remains unclear.
In 2014, Simmons co-founded Learnirvana, an online learning platform.
Andrew McCormack: entrepreneur
Position at PayPal: assistant to Thiel from July 2001 to November 2002
Companies later founded: Valar Ventures
Andrew McCormack began his career as an assistant to Peter Thiel at PayPal and followed him into subsequent ventures. From November 2002 to April 2003, he oversaw operations at Thiel’s hedge fund, Clarium Capital.
In 2010, McCormack co-founded Valar Ventures with Thiel and James Fitzgerald, focusing on fintech investments. He remains a general partner at the firm.
Luke Nosek: investor
Position at PayPal: co-founder and vice president of marketing and strategy from 1998 to 2002
Companies later founded: Founders Fund, Gigafund
In 2005, Luke Nosek joined Peter Thiel and Ken Howery to launch Founders Fund, a San Francisco–based venture capital firm that has backed companies such as Airbnb, Lyft and SpaceX. While his exact net worth is unclear, Nosek has made substantial investments through his venture firms. At Founders Fund, he led one of the firm’s earliest major deals with a $20 million investment in SpaceX, later serving on its board.
In 2017, Nosek left to co-found Gigafund, which went on to invest $1 billion in SpaceX, according to the company. He also sits on the board of ResearchGate.
Premal Shah: entrepreneur
Position at Paypal: product manager
Companies later founded: Kiva
Three years after leaving PayPal, Premal Shah co-founded Kiva, a nonprofit that provides loans to entrepreneurs in underserved communities worldwide. He also serves on the boards of other nonprofits, including the Center for Humane Technology, the Change.org Foundation, Watsi and VolunteerMatch.
Keith Rabois: investor
Position at PayPal: executive vice president of business development
After leaving his executive role at PayPal, Keith Rabois became an active investor, backing companies including Slide, YouTube and Palantir. He also invested in LinkedIn, where he served as vice president of business and corporate development, and Square, where he was chief operating officer.
Rabois joined venture capital firm Khosla Ventures from 2013 to 2019 and was a partner at Founders Fund from 2019 to 2024.
If you’ve had internet access since 2005, you’re familiar with Taylor Swift.
Image Credit: Gilbert Flores | Getty Images
The superstar musician is the most-streamed artist in the world. She is the first to win album of the year at the Grammy Awards four times. Her Eras Tour generated more than $2 billion in ticket sales. And she has a net worth of $1.6 billion.
She also has something valuable in common with Amazon, the Jeff Bezos-founded ecommerce giant that boasts a $2.5 trillion market capitalization.
Aside from Swift and Amazon’s status as two of the most successful brands in the world, the pair shares a rare trait that’s helped them get there, according to former strategist at Harvard Business School Sinéad O’Sullivan.
“In an increasingly complex and seemingly random world, some systems perform better in chaos than others.”
The concept of “antifragility” relates to a field of physics called chaos theory. Lebanese American scholar of math and financial markets Nassim Taleb coined the term after noticing a peculiar event unfolding in systems and organizations across a wide range of fields, from biology to urban development, healthcare and more.
“What he saw was that in an increasingly complex and seemingly random world, some systems perform better in chaos than others,” O’Sullivan writes.
Essentially, antifragility flouts the human desire for stability and instinct to fear what’s different or unstable.
“The idea of antifragility goes far beyond saying that uncertainty doesn’t have to be bad,” O’Sullivan explains. “It actually says that uncertainty is good. Antifragility isn’t just about surviving chaos; it’s about flourishing in it. It’s about flipping the script and turning adversity into opportunity, uncertainty into innovation and chaos into creativity.”
The immune system and winemaking serve as real-life examples of antifragility at work, O’Sullivan notes. A strong immune system has been exposed to pathogens and can better ward off future threats. Great wine often comes from vines under stress because they grow smaller grapes with more concentrated flavor.
“Amazon’s business actually gets stronger because the volatility wipes out its competitors.”
The pandemic helped reveal which companies were antifragile, too — those that didn’t have to wait for share prices to recover because they’d never really fallen in the first place, according to O’Sullivan. As many major retailers struggled to stock their shelves, Amazon maintained total control over its supply chain and saw its online business soar.
“At Amazon, there is no single point of failure that would prevent toilet paper from being passed from millions of available sellers to millions of eagerly awaiting buyers,” O’Sullivan says. “Amazon’s business actually gets stronger because the volatility wipes out its competitors.”
Likewise, Swift has demonstrated remarkable antifragility while building her business over the years. O’Sullivan cites four career moments when Swift took a “destructive” path that weakened the competition and strengthened her brand:
1. In 2014, Swift withdrew her music from Spotify, the fastest-growing music streaming platform at that time, because she believed its compensation model for artists devalued their work.
Why wasn’t the move “fatal,” as many industry experts assumed it would be? The “friendship first” and “music later” relationship she has with her fans plays an important role, according to O’Sullivan.
“Taylor Swift can be compared to a Rolex watch, not a Swatch,” O’Sullivan writes. “The harder it is for people to access her music, the more they crave her and are willing to follow her. By withdrawing her music, Taylor Swift became what is known as a ‘Veblen’ or a ‘luxury’ good.”
When Swift left Spotify, her music was in the playlists of more than 19 million users; the week she returned in 2017, she hit nearly 48 million streams.
2. Swift isn’t afraid to “beef” with other musicians and celebrities — like Kanye West after he told her on stage at the 2009 MTV Music Video Awards that “Beyonce had the best video of all time.”
“The more Kanye West beat down Taylor Swift, the stronger her fan base rallied around her, leading to extravagantly higher levels of emotional connection between Taylor and her fans within the Swiftverse,” O’Sullivan says.
O’Sullivan adds that “at least from the outside, Taylor never starts the fights,” which also tends to fit within three main growth-fueling “vibes”: “powerful men taking advantage of less powerful women,” “women who are bitchy and unkind” and “being on the right side of history.”
3. During the pandemic, Swift released not one but two surprise albums despite marketing limitations amid lockdowns and industry precedents.
“When everybody else was fumbling to get a handle on their life, how was Taylor Swift able to Amazon herself?” O’Sullivan writes. “Well, most of it comes down to the fact that, like Amazon, she has spent her entire career creating, buying and owning her own ‘value chain,’ or the different parts of the music industry that she needs to engage with to release music.”
The Swiftverse is “one hell of a strategic asset,” O’Sullivan notes — and kept her able to deliver core products into the market.
4. Finally, Swift rerecorded her albums after Big Machine Label Group was sold to Scooter Braun‘s Ithaca Holdings.
Some industry leaders considered the lengthy and expensive move one that “would suck the oxygen out of her career” — but because Swift is antifragile, the opposite proved true, O’Sullivan says.
“As Taylor and Amazon both show us, [during a crisis] is exactly when their stock is going to rise,” O’Sullivan writes. “Investors who pay hundreds of millions of dollars to try to own what they think is Taylor Swift’s ‘core product’ (music) simply don’t understand her empire as well as she understands it.”
Going forward, business and strategy leaders who successfully lead through chaos will all be building antifragile organizations — Swift just happens to be ahead of the game, O’Sullivan says.
What’s more, as beneficial as antifragility is, O’Sullivan acknowledges that adopting it isn’t easy. It requires embracing uncertainty and volatility, building resilience and accepting “weird and bad things.”
O’Sullivan’s Good Ideas and Power Moves offers other takeaways from Swift’s career that entrepreneurs and business leaders might find applicable to their own, including how to be a unicorn, have a strategy and stick to it, build a world instead of products, negotiate with authenticity and more.
Tesla launched a limited robotaxi service in Austin, Texas, earlier this summer, but it’s unclear whether the vehicles driving around the city are technologically advanced enough to count towards that 1 million robotaxi goal. (The proposal specifies that the robotaxis must not have a “human driver,” and the vehicles in Texas have safety monitors sitting in their front passenger seats for city rides, and in the driver’s seats for highway trips.)
Meanwhile, the company is reportedly falling well short of its current goal to produce 5,000 units of Optimus, its humanoid robot, by the end of this year, having only produced a few hundred. Musk has said that Optimus could one day revolutionize the global economy by replacing the majority of human labor, but The Information reported in July that the Optimus team was having particular trouble with the robot’s hands. The company’s vice president of Optimus robotics, a nine-year Tesla veteran, left in June.
“For Musk to receive the full pay package, Tesla will need to be the leader of autonomous vehicles and humanoid robots in a number of countries,” says Seth Goldstein, a senior equity analyst at Morningstar, a financial services firm.
Musk’s past pay packages have been unconventional, and controversial. Unlike other CEOs, Musk does not receive annual compensation or incentives, but is instead paid according to Tesla’s long-term performance. His 2018 pay package, worth more than $50 billion, is still in legal limbo after a shareholder lawsuit accusing the Tesla board of insufficient transparency and independence led to a Delaware judge striking it down last year. (Tesla responded by reincorporating in Texas.) The board granted Musk an interim $29 billion stock award last month.
The proposal demonstrates that, despite his controversial moves, Tesla’s board sees Musk as a crucial part of the automaker’s success, and that the Musk era is far from over. “This new pay package should keep Elon Musk at Tesla for at least the next decade,” says Goldstein.
The package’s goals double down on the messages of Tesla’s “Master Plan Part IV,” a lofty mission statement posted this week exclusively on X, Musk’s social platform. Tesla’s Master Plans were once cheeky blogs posted directly by Musk onto Tesla’s website, complete with back-of-the-envelope energy cost calculations. The new plan points to Tesla’s more civilizational ambitions. “Autonomy must benefit all of humanity,” one section reads; “Greater access drives greater growth,” reads another, complete with renderings of Optimus robots serving cocktails and watering plants.
But if Musk wants to change the world and make his trillion, he’ll have to stay in his lane—and out of President Donald Trump’s, for whom he once served as “First Buddy”. The board-run committee that put together the pay proposal has met with Musk 10 times since February, the Tesla board wrote in its filing. Among other things, the filing reads, the committee received “assurances that Musk’s involvement with the political sphere would wind down in a timely manner.”
Opinions expressed by Entrepreneur contributors are their own.
Between now and 2048, an estimated $124 trillion in family assets will be passed from Generation X to millennials and Gen Z, the first mass transfer of its kind. This is a phenomenon so significant that it is named the Great Wealth Transfer, and it’s an event that began unfolding in the mid-2010s, catalyzed by the retirement of the Baby Boomer generation.
A market research firm called Cerulli and Associates estimated that out of the $124 trillion worth of assets that will be transferred, around $105 trillion will be inherited directly by heirs and $18 trillion will go to charity. Swiss banking giant UBS, in its 2024 wealth report, estimated that $83 trillion globally will be passed on within the next two decades, and that a large chunk of these assets will be held across the Asia Pacific region. A recent McKinsey report showed that the value of these assets circulating in this Eastern region could be worth $5.8 trillion by 2030.
As a fourth-generation heir of the Kowloon Motor Bus Company, Hong Kong’s oldest transportation company, I inherited my family’s wealth at a really young age due to premature deaths within my family. Despite this, I managed to carry the business forward as a director and figurehead, which I believe is rare since research has shown that as many as 90% of family wealth is often lost by the third generation. I am in a unique position to speak about this subject as a Baby Boomer looking to transfer to younger generations.
Among the concerns the older generation may have about the Great Wealth Transfer and how it will be orchestrated successfully across the coming years, here are what I consider to be three of the most salient points.
1. Gauging millennial and Gen Z’s financial interest
Most family elders, especially in Asia, are highly concerned about how they would go about educating their children about the family assets and businesses. How willing would their heirs be to take over a business that has been continuing for more than a hundred years? This is a common concern due to the fact that some of the oldest companies in the world are currently held by families in the East.
This concern is compounded by the fact that Baby Boomers and Gen X have significantly different attitudes to money compared to their heirs, since these generations have been conditioned to aim for a “job for life,” with intense focus on accumulating savings for retirement. According to an article by the Financial Times, millennials (1981-1996) lack financial education, having the propensity to build up credit card debt, while Gen Z possess a short-term fiscal outlook compared to their elders.
2. Emotions can get in the way of discussions
There may be different types of emotions at play whenever the Great Wealth Transfer is mentioned in a family business. Older generations are generally more reluctant to discuss financial affairs more openly with younger generations, which can act as a barrier to effective communication. Moreover, younger generations may find it distressing to have discussions about inheriting wealth and business, as they often have connotations of death.
Younger generations can also have significantly differing views to their elders when it comes to running a company, with evidence showing that they are more socially aware of issues that affect the world, such as climate change, AI revolution and globalization, while some members of older generations may have a more conservative attitude, with a greater focus on wealth preservation and conservation. These differences can make discussions about business succession more heated and prone to disagreements and family conflicts. This is one of the main reasons families delay these important conversations from taking place, which could negatively affect a smooth transfer.
An article written by the Guardian showed that the 2020 pandemic has accelerated the intergenerational wealth transfer due to unforeseen, untimely deaths. Many members of younger generations, especially in the UK, are beneficiaries of unexpected windfall, according to Treasury figures, which found that a record-breaking volume of inheritance tax was collected during 2021 and 2022: £6.1 billion.
Research from Capital Group also found that high-net-worth families are actually accelerating the transfer of wealth to their heirs, in a survey conducted with 600 individuals across Europe, Asia Pacific and the U.S. The report found that 65% of Gen X and millennial inheritors who participated in the research said they had regrets about how they used their inheritance money, with nearly two in five respondents wishing they had invested more of their assets after the transfer.
With these concerns percolating in older generations’ minds, it is only wise for family businesses to plan well ahead for the Great Wealth Transfer. Have those difficult conversations with your heirs early on so that unpredictable shifts will not shake up your family’s assets. And more importantly, it is important to ensure that the family wealth’s purpose is well-defined in this increasingly complex and volatile world, and for that, meaningful conversations between the generations need to continue. Family businesses can no longer rest on their laurels.
Between now and 2048, an estimated $124 trillion in family assets will be passed from Generation X to millennials and Gen Z, the first mass transfer of its kind. This is a phenomenon so significant that it is named the Great Wealth Transfer, and it’s an event that began unfolding in the mid-2010s, catalyzed by the retirement of the Baby Boomer generation.
A market research firm called Cerulli and Associates estimated that out of the $124 trillion worth of assets that will be transferred, around $105 trillion will be inherited directly by heirs and $18 trillion will go to charity. Swiss banking giant UBS, in its 2024 wealth report, estimated that $83 trillion globally will be passed on within the next two decades, and that a large chunk of these assets will be held across the Asia Pacific region. A recent McKinsey report showed that the value of these assets circulating in this Eastern region could be worth $5.8 trillion by 2030.
As a fourth-generation heir of the Kowloon Motor Bus Company, Hong Kong’s oldest transportation company, I inherited my family’s wealth at a really young age due to premature deaths within my family. Despite this, I managed to carry the business forward as a director and figurehead, which I believe is rare since research has shown that as many as 90% of family wealth is often lost by the third generation. I am in a unique position to speak about this subject as a Baby Boomer looking to transfer to younger generations.
High home prices and mortgage rates have created unaffordable conditions for many Americans, but the housing market’s ability to create more wealth has sputtered.
That’s because even as home prices continue to hover around record levels, they are also edging lower and lagging behind the rate of inflation, which has heated up amid President Donald Trump’s tariffs.
“For the first time in years, home prices are failing to keep pace with broader inflation,” said Nicholas Godec, head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices, in a statement on Tuesday. The last time that happened was mid-2023.
The latest S&P Cotality Case-Shiller home price data showed that the 20-city index fell 0.3% in June from the prior month, marking the fourth consecutive monthly decline.
On an annual basis, the 20-city composite was up 2.1%, down from a 2.8% increase in the previous month, and the national index saw a 1.9% yearly gain, down from 2.3%. Meanwhile, the consumer price index rose 2.7% in June from a year ago.
“This reversal is historically significant: During the pandemic surge, home values were climbing at double-digit annual rates that far exceeded inflation, building substantial real wealth for homeowners,” Godec added. “Now, American housing wealth has actually declined in inflation-adjusted terms over the past year—a notable erosion that reflects the market’s new equilibrium.”
Weak prices suggest underlying housing demand remains muted, he said, despite the spring and summer historically being the peak period for homebuying.
In fact, this year’s selling season has been a bust. While sales of existing homes have ticked up recently, they are still subdued and prices are flat. In addition, sales of new homes are slumping with prices down.
In Godec’s view, the recent shift in the housing market could represent a new normal—but one that also has a positive angle.
“Looking ahead, this housing cycle’s maturation appears to be settling around inflation-parity growth rather than the wealth-building engine of recent years,” he said.
That’s as pandemic-era hot spots in the Sun Belt have cooled off with demand increasingly tilting toward established industrial centers that enjoy sustainable fundamentals like employment growth, greater affordability, and favorable demographics.
“While this represents a loss of the extraordinary gains homeowners enjoyed from 2020-2022, it may signal a healthier long-term trajectory where housing appreciation aligns more closely with broader economic fundamentals rather than speculative excess,” Godec added.
Meanwhile, analysts at EY-Parthenon sounded gloomier about the housing market in a report that also came out on Tuesday, predicting that home prices will turn negative on an annual basis by year-end due to low demand and rising inventories.
Home listings are up 25% from a year ago, and inventories have risen for 21 consecutive months. Homebuilders are also cautious given that demand is under pressure and construction costs are still elevated.
“Looking forward, the housing market is expected to stay stagnant, as slowing income growth and persistently high borrowing costs continue to limit demand,” the EY report said. “While proposed changes to the regulatory environment can help improve builder sentiment, elevated construction costs due to higher tariffs along with ample inventories will continue to constrain construction activity.”
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Opinions expressed by Entrepreneur contributors are their own.
Entrepreneurship is the quickest path to wealth, offering the potential to bypass the slow grind of traditional saving and investing. I am a CPA, Certified Financial Planner and author of Rich Habits: The Routines Millionaires Use Daily That Will Help You Build Wealth.
Over a five-year period, I studied the daily habits of 233 wealthy individuals, of which 177 were self-made millionaires, and 128 people living in poverty. My Rich Habits research, along with insights from other independent third-party experts/studies corroborating my research, reveals that entrepreneurship accelerates wealth-building when paired with specific habits.
This article explores why entrepreneurship is the fast track to wealth and how my findings can guide aspiring entrepreneurs to success.
My research shows that self-made millionaires who pursued entrepreneurship built wealth faster than those who relied on saving and investing as employees. In my five-year Rich Habits Study, “Saver-Investors” took an average of 32 years to accumulate $3.3 million, while entrepreneurs reached $7.4 million in just 12 years. This gap highlights entrepreneurship’s potential to compress the wealth-building timeline.
Entrepreneurs can create multiple income streams, scale businesses and directly influence financial outcomes, unlike employees tied to fixed salaries. However, I must emphasize that success depends on adopting certain ‘Rich Habits’ — daily routines that set successful entrepreneurs apart.
Below are the key habits from my research, tailored for aspiring entrepreneurs.
1. Set clear, actionable goals
In my Rich Habits study, 80% of self-made millionaires set specific, long-term goals and focused on them daily. For entrepreneurs, this means defining a clear vision — whether launching a product or hitting revenue targets — and breaking it into daily tasks.
I found that successful entrepreneurs have a do it now mindset/daily mantra that encourages immediate action to maintain momentum.
Actionable Tip: Write one major business goal for the next year and break it into monthly and daily tasks. Review progress daily to stay on track.
Successful entrepreneurs are lifelong learners. My Rich Habits study shows that 88% of millionaires dedicate at least 30 minutes daily to self-education, reading books on personal development or industry trends. In contrast, 77% of poor individuals in my study spent over an hour a day either watching TV, streaming, reading books of fiction, social media engagement and other online time-wasters. Knowledge keeps entrepreneurs competitive.
Actionable Tip: Replace 30 minutes of social media with reading a business book or listening to an industry podcast. or reading industry journals
3. Live frugally to re-invest
Financial discipline is critical. Saver-Investor millionaires build their wealth by being frugal with their spending in order to save 20% or more of their net income, which they prudently invest themselves or through financial advisors. Entrepreneurs are different.
While they do share the frugality habit with Saver-Investors, they don’t save like Saver-Investors. Instead, they live frugally in order to maximize the amount of profits, which they then reinvest back into their businesses — marketing, product development or hiring. In order to be able to live frugally, budget no more than 25% of net income on housing, 15% on food, 10% on entertainment and 5% on vacations.
Actionable Tip: Automate investing 20% of your company’s profits into a business savings account to help you fund growth or provide a buffer.
Networking is a cornerstone of success. In my study, I found that 93% of millionaires with mentors credited them, almost entirely, for their success in life. Mentors offer guidance, share processes that work, teach habits that automate success, teach what works and what does not work and open doors to influencers who are part of their inner circle.
Wealthy entrepreneurs also invest significant time in cultivating “Power Relationships” with optimistic, success-minded peers and mentor others to strengthen their networks.
Actionable Tip: Seek a mentor in your industry and ask for specific advice. Mentor someone else to build your network and refine your strategies.
5. Take calculated risks
Entrepreneurship involves risk, but successful entrepreneurs do their homework and make informed decisions prior to taking any risk. In my study, 27% of millionaires failed at least once in business but learned from their setbacks. They avoid reckless, speculative moves, relying on research, mentorship and market analysis to seize opportunities others miss.
Actionable Tip: Before launching a venture, conduct market research and test ideas with a small-scale pilot program in order to minimize risk.
6. Prioritize positivity and health
A positive mindset and good physical health sustain entrepreneurial stamina and energy levels. My Rich Habits millionaires practiced “rich thinking,” controlling negative emotions and staying optimistic. Additionally, 76% exercised regularly to maintain energy and focus, enhancing decision-making and resilience.
Actionable Tip: Spend 30 minutes daily on exercise like walking, yoga, weights or resistance exercises and practice gratitude to maintain positivity.
I learned from my Rich Habits research that passion fuels entrepreneurial success. Passion makes work fun. Passion gives you the energy, persistence and focus needed to overcome failures, mistakes and rejection.
Passionate entrepreneurs endure long hours and challenges, while disciplined habits create a compounding effect. However, even the entrepreneurial fast track requires time — 12 years on average to reach multimillion-dollar wealth.
Addressing challenges
Critics of my work argue that systemic factors or demographic biases may influence wealth beyond habits. While barriers exist, my blind study focused on controllable behaviors. Entrepreneurs can’t eliminate external challenges, but can control daily actions, relationships and decisions to navigate them effectively.
Entrepreneurship offers the fastest path to wealth for those who adopt the Rich Habits my research highlights. By setting goals, prioritizing learning, living frugally, building networks, taking calculated risks and maintaining positivity and health, aspiring entrepreneurs can emulate self-made millionaires. Wealth-building is a two-step process — creating and sustaining it — and entrepreneurship, with disciplined habits, is the engine that drives both steps faster than any other path.
Start small, stay consistent and entrepreneurship will eventually lead you to financial success.
STATE HOUSE, BOSTON — In a state where more than 10% of residents live in poverty, lawmakers are pitching an omnibus bill to expand cash benefit programs, raise wages, and create state-run initiatives to help families build wealth.
There’s no age limit when it comes to achieving significant financial milestones, but many people envision checking them off their list by a certain point in their lives.
Unfortunately, these days, amid high costs of living and economic uncertainty, most U.S. adults fall short of wealth-building goals: 77% say they aren’t completely financially secure, according to Bankrate’s Financial Freedom survey.
How old should you really be to land that dream job, start saving for retirement, earn six figures or buy your first home?
New research from Empower set out to answer those questions and explore how Americans navigate money milestones today.
Although just 17% believe people should hit financial milestones by a specific age, 44% are glad they achieved them when they did, per the report.
On average, Americans think you should start saving for retirement at 27, land your dream job at 29, buy your first home at 30 and earn six figures by 35, according to the research. Respondents also reported hoping to be debt-free at 41 and to retire at 58.
About half of Americans (45%) wish they’d saved money earlier and with more consistency in order to prepare for life’s big changes, the study found.
After planning for retirement and becoming a homeowner, Americans see several life events as significant wealth-building opportunities: investing in stocks (34%), investing in education (26%), changing career paths (21%), getting married (19%) and starting a business (19%).
Nearly one-third of respondents said they realized the value of having a financial plan or working with a financial planner after meeting a life milestone.
“For all ages, it’s important to talk to an advisor who can help create a tailored path specific to your financial goals and set you up for a realistic retirement lifestyle,” Stacey Black, lead financial educator at Boeing Employees Credit Union (BECU), told Entrepreneur last year.
There’s no age limit when it comes to achieving significant financial milestones, but many people envision checking them off their list by a certain point in their lives.
Unfortunately, these days, amid high costs of living and economic uncertainty, most U.S. adults fall short of wealth-building goals: 77% say they aren’t completely financially secure, according to Bankrate’s Financial Freedom survey.
How old should you really be to land that dream job, start saving for retirement, earn six figures or buy your first home?
Millennials: You’ll remember walking into Abercrombie & Fitch in the late ‘90s and early 2000s. Loud, thumping music, perfume so strong you could barely think straight, and posters of half-naked men were all part of the experience—and a desire to feel “cool.”
David Turner/WWD/Penske Media—Getty Images
Mike Jeffries, Abercrombie’s former CEO, was behind that vision. And on Tuesday, he and his partner Matthew Smith were arrested in Florida in connection with sex trafficking-related charges, according to a federal indictment. The duo, along with an employee of theirs, James Jacobson, allegedly ran an international sex trafficking and prostitution ring from 2008 to 2015 that allegedly involved paying for secret sex with potentially dozens of men, including 15 unnamed victims.
The official indictment has been a long time coming. Last year, BBC released a documentary about Jeffries’ shady practices. The BBC investigation revealed that Jeffries and Smith allegedly used a middleman to find men to attend and participate in the sex events. Jeffries and Smith would allegedly engage in sexual activity with about four men at these events or “direct” them to have sex with one another, several attendees from the events told BBC. Jeffries’ personal staff dressed in Abercrombie uniforms and supervised the activity, according to the allegations, and staff members gave attendees envelopes filled with thousands of dollars in cash at the end of the events.
LAURENT FIEVET/AFP/GettyImages
The middleman “made it clear that unless I let him perform oral sex on me, I would not be meeting with Abercrombie & Fitch or Mike Jeffries,” David Bradberry, who was introduced to Jacobson in 2010 when he was 23 years old, told BBC. An agent posing as a model recruiter introduced Bradberry to Jacobson, who described himself as the gatekeeper to the “owners” of Abercrombie and Fitch, according to the BBC investigation.
The federal indictment included related allegations and more.
Jeffries’ shady past with Abercrombie
According to a 2006 interview with Salon, Jeffries wanted to make the 130-year-old retailer into the hearthrob teen clothing brand of the time, which he successfully did—but not without offending swaths of people. His interview pretty much sums up his marketing approach as only making it about “cool” people.
“Those companies that are in trouble are trying to target everybody: young, old, fat, skinny. But then you become totally vanilla,” Jeffries told Salon. “You don’t alienate anybody, but you don’t excite anybody, either.”
Brooks Canaday/MediaNews Group/Boston Herald via Getty Images
By 2006, Abercrombie & Fitch’s earnings had risen for 52 straight quarters, with annual profits of more than $2 billion. Plus, the company had opened hundreds of new brick-and-mortar stores and launched three new labels, including Hollister.
In the early 2010s, Abercrombie started going south financially as a result of age discrimination and hiring practice lawsuits, and Jeffries’ 2006 interview with Salon started being circulated again and went viral. In 2013, Jeffries was named as the worst CEO of the year by TheStreet’s Herb Greenberg. To boot, CNBC’s Jim Cramer named him to his “Wall of Shame.”
“Since its early trading in 1996, Abercrombie has barely beaten the S&P 500. It has dramatically trailed the index over the past one-, three- and five-year marks,” Greenberg wrote in 2013. “The past year, in particular, has been an abomination, leading activist firm Engaged Capital to demand his ouster.”
By 2014, same-store sales slumped for 11 straight quarters and two of its subsidiary brands, Ruehl No.925 and Gilly Hicks, shut down just a few years after launch. Teens were just also over Abercrombie’s style at that point, and the shopping mall era was coming to a close. And in 2016, Abercrombie was deemed the most-hated retailer by the American Customer Satisfaction Index for its hypersexualized marketing and controversies.
Abercrombie’s second wind
But as Abercrombie has distanced itself from Jeffries, the brand is making a major comeback after posting its best first-quarter earnings in company history this year. Abercrombie reported $1 billion in net sales, a 22% increase from 2023. Last year, its annual revenues were $5 billion.
YUKI IWAMURA/AFP—Getty Images
This was an epic comeback for the brand. CEO Fran Horowitz took the helm in 2017, revamping stores and inventories as well as expanding sizes and introducing clothing for a variety of lifestyles.
“We moved from a place of fitting in to creating a place of belonging,” Horowitz said in a 2022 speech at the Fordham University Gabelli School of Business’ fifth annual American Innovation Conference.
Mark Avallone of Potomac Wealth Advisors likes non-bank financials and diversified banks who do not rely on deposits. He says to avoid private credit due to its risky nature.
San Diego city officials and activists came together to call on business and government officials to address pay inequities for Latinas in San Diego, CA on Dec. 8, 2022.
Matthew Bowler | KPBS | Sipa USA
Latina women working full time, year-round earn 58 cents for every dollar paid to white, non-Hispanic men, according to data collected by the National Women’s Law Center.
Latina Equal Pay Day, which this year falls on Oct. 3, marks the additional days into the new year that Latinas must work to earn as much as the typical annual salary of white, non-Hispanic male workers.
That gap in pay translates to a loss of nearly $1.3 million over a 40-year career. Break that down further and Latinas lose $32,070 in wages per year, or $2,672 every month, compared with the dominant cohort.
While 58 cents per dollar is a penny improvement compared with the previous year, NWLC notes that even though wages have been increasing, so too has the total wage gap over a lifetime — which last year totaled $1,218,000.
“The increase in lifetime losses and widening of the wage gap for all Latina workers, including part-time workers, is likely because white men’s wages are increasing at a faster rate than other demographic groups,” said Ashir Coillberg, NWLC senior research analyst.
Assuming a Latina and her white, non-Hispanic male counterpart both begin work at age 20, NWLC notes, the wage gap means a Latina would have to work until she is 89 years old — eight years beyond her life expectancy — to be paid what a white, non-Hispanic man has been paid by age 60.
Despite the narrow improvement for full-time workers, the gap actually widens for part-time and part-year Latina workers, falling to 51 cents on the dollar compared with 52 cents last year.
The wage gap varies widely for certain Latina communities, and for some in the United States it’s even more extreme.
While full time, year-round Argentinean and Spanish Latina workers remain closest to parity at 84 cents and 81 cents, respectively, wages for Honduran, Guatemalan and Salvadoran women remained the widest at 47 cents, 48 cents and 51 cents, respectively.
“Most other marginalized populations — and women as a whole — saw a slight widening of the wage gap this year, for both full-time, year-round workers as well as when including part-time workers,” Coillberg said.
Guatemalan, Cuban and Spanish women saw the greatest increase in losses over a 40-year career.
Latinas are more likely to hold low-wage jobs, but NWLC research finds pay disparities at all education levels.
While continued education can be a benefit to earnings potential, NWLC data suggests getting more education does not shield them from the wage gap. Latinas are typically paid less than white, non-Hispanic men with the same educational attainment and are often paid less than white, non-Hispanic men with less educational attainment.
Some of the most educated Latinas have some of the most striking pay gaps compared to their white non-Hispanic men counterparts, according to the NWLC. For example, the center said a Latina with a professional degree stands to lose more than $2.9 million to the wage gap over a 40-year career.
“Unequal pay means Latinas have less money to cover current expenses and forces them to miss key opportunities to build wealth and build economic security throughout their lifetimes,” the NWLC notes in the report.
Instead of prioritizing continued education, pay equity experts are advocating for comprehensive legislative reform.
“A comprehensive approach includes requiring equal pay for equal work, pay transparency policies from lawmakers, eliminating the subminimum tipped wage, protection from caregiver discrimination, safety from harassment and health hazards for all workers, prohibiting salary history to determine future pay, and increased access to higher-paid jobs for women,” said Noreen Farrell, Equal Pay Today chair. “That’s how you actually close the gap.”
“The widening gap underscores the urgency of tackling this issue to ensure equitable economic opportunities for Latinas,” Farrell said. “Latinas do not have one more day to wait for equal pay.”
The Microsoft co-founder has long been one of the world’s wealthiest people. Yi-Chin Lee/Houston Chronicle via Getty Imag
Bernie Sanders, the famously anti-billionaire senator of Vermont, and Bill Gates, the world’s seventh wealthiest person with an estimated net worth of $138.5 billion, make an unlikely pairing—especially when it comes to debating income inequality. Despite their differences, the duo sat down together to discuss wealth and taxation for the latest episode of Gates’ new Netflix series What’s Next? The Future with Bill Gates.
“Several of my friends raised an eyebrow when I told them I was going to meet with him,” said Gates in a blog post on Wednesday (Sept. 18) discussing his meeting with Sanders and the show, which aired the same day. “After all, Sen. Sanders is the first U.S. Senator in history to go on record saying that billionaires shouldn’t exist,” he added.
Sanders maintained this stance during their discussion, calling the existence of ultra-wealthy individuals “unacceptable” and “obscene.” Gates, meanwhile, suggested that billionaires should voluntarily donate their wealth but disagreed on outlawing them altogether. “But again, I’m biased,” conceded the Microsoft (MSFT) co-founder. Gates, who has given away some $77.6 billion via the Gates Foundation, has long been a champion for billionaire philanthropy and in 2010 helped create the Giving Pledge, a campaign that urges the ultra-wealthy to donate the majority of their wealth.
How much should the ultra-rich be taxed?
Despite their different stances on banning billionaires, both Gates and Sanders are advocates for higher taxes on the rich. “I’m amazed that the rich aren’t taxed substantially more than they are,” said Gates during the episode. “If you raise taxes a fair bit, there should be enough to somewhat raise the social safety net, which is not as well-funded as I would make it,” he added. The centibillionaire said his ideal tax system would leave the wealthy with a third of their current fortunes, which would give Gates around $46 billion given his current fortune. Sanders, meanwhile, said he “would go a lot further.”
Gates’ comments echo statements he made earlier this month in an interview with The Independent, where he voiced his desire for more progressive tax policies. “If I designed the tax system, I would be tens of billions of dollars poorer than I am,” he told the outlet.
In a 2019 blog post, Gates suggested increasing taxes on large investments by the wealthy and urged the U.S. government to raise the capital gains tax to equal taxes on labor. While those relying on salary and hourly work are taxed at a maximum of 37 percent, “the wealthiest generally only get a tiny percentage of their income from a salary; most of it comes from profits on investments, such as stock or real estate, taxed at 20 percent if they’re held for more than a year,” he said.
During his discussion with Gates, Sanders pointed to a similar idea proposed by Warren Buffett in 2011 when he criticized the fact that he was taxed less than his employees. “That is not what the American people want to see,” said the senator.
Earlier this year, JPMorgan Chase (JPM)’s Jamie Dimon—estimated to be worth $2.3 billion—said that higher taxes on the rich would help the nation bring its debt down while increasing economic spending and growth. “You would maybe just raise taxes a bit, like the Warren Buffett-type of rule,” Dimon told PBS, referring to a tax rule borne out of Buffett’s comments that dictates no households earning more than $1 million annually should pay a smaller share of their income in taxes than middle-class families.
Street scene in Old Bond Street, Mayfair, London, United Kingdom.
Pawel Libera | The Image Bank | Getty Images
LONDON — Monaco, Italy, Switzerland, Dubai. They’re just a few of the destinations trying to lure away the U.K.’s uber wealthy ahead of proposed changes to the country’s divisive non-dom tax regime.
Almost two-thirds (63%) of wealthy investors said they plan to leave the U.K. within two years or “shortly” if the Labour government moves ahead with plans to ax the colonial-era tax concession, while 67% said they would not have emigrated to Britain in the first place, according to a new study from Oxford Economics, which assesses the implications of the plans.
The U.K.’s non-dom regime is a 200-year-old tax rule, which permits people living in the U.K. but who are domiciled elsewhere to avoid paying tax on income and capital gains earnings overseas for up to 15 years. As of 2023, an estimated 74,000 people enjoyed the status, up from 68,900 the previous year.
Labour last month set out plans to abolish the status, expanding on a pledge set out in its election manifesto and stepping up earlier proposals by the previous Conservative government to phase out the regime over time.
It comes as Prime Minister Keir Starmer has pledged to improve fairness and shore up the public finances, with further announcements expected early next week at the Labour Party’s annual conference and during the Oct. 30 Autumn budget statement.
Finance Minister Rachel Reeves has said that scrapping the program could generate £2.6 billion ($3.45 billion) over the course of the next government. However, Oxford Economics’ research, which was produced earlier this month in collaboration with lobby group Foreign Investors for Britain, estimates the changes will instead cost taxpayers £1 billion by 2029/30.
CNBC reached out to the Treasury for comment and did not immediately receive a response.
“We are ringing out the alarm bell that this is a perilous time,” Macleod-Miller, CEO of Foreign Investors for Britain, told CNBC over the phone. “If the government doesn’t listen they’ll put at risk revenues for generations.”
Other countries are smelling the fear and actively promoting their jurisdictions.
Leslie Macleod-Miller
CEO at Foreign Investors for Britain
Under the proposals, the concept of “domicile” will be eliminated and replaced with a resident-based system, while the number of years in which money earned abroad goes untaxed in the U.K. will be cut from 15 to four.
Individuals will also have to pay inheritance tax after 10 years of U.K. residency and would remain liable for 10 years after leaving the country. They will also be prevented from avoiding inheritance tax on assets held in trust.
However, Macleod-Miller, a private wealth practitioner who launched the lobby group in response to the proposals, said the changes would stymy wealth generation and is instead calling for a tiered tax regime.
According to the Oxford Economics research, which surveyed 72 non-doms and 42 tax advisors representing a further 952 non-dom clients, virtually all (98%) said they would emigrate from the U.K. sooner than previously planned if the reforms were implemented. The 72 non-doms surveyed were said to have invested £118 million each into the U.K. economy.
The majority (83%) cited inheritance tax on their worldwide assets as their key motivator for leaving, while 65% also referenced changes to income and capital gains tax.
It comes as other countries are shaking up their tax regimes to incentivize wealthy investors.
Switzerland, Monaco, Italy, Greece, Malta, Dubai and the Caribbean island of the Bahamas are among the various destinations proving most attractive to wealthy investors, according to industry experts and agents CNBC spoke to.
“Wealthy investors have a lot of choices now and a lot of domiciles are fighting for them,” Helena Moyas de Forton, managing director and head of EMEA and APAC at Christie’s International Real Estate, told CNBC.
Moyas de Forton, whose team advises clients on international relocation, said Labour’s plans were the latest in a string of political developments which have shaken the U.K.’s reputation as a safe haven over recent years.
Monte Carlo skyline surrounded by sea and mountains, Monaco.
Alexander Spatari | Moment | Getty Images
“It’s just another hit,” she said. “I’m not sure if they’re all leaving but definitely they’re questioning and taking their time to see what’s changing.”
A record number of millionaires are expected to leave the U.K. this year, according to a June report from migration consultancy Henley & Partners, which cited the July general election as adding to a period of post-Brexit political flux. It is estimated that Britain will record a net loss of 9,500 high-net-worth individuals in 2024, more than double last year’s 4,200.
“It is definitely a danger. The markets are so fungible nowadays. It’s easy for people to move home. It’s easy for people to move their businesses,” Marcus Meijer, CEO of real estate investor Mark, told CNBC’s “Squawk Box Europe” of the non-dom changes last week from Monaco.
A lot of people are worried. They would rather get out now before it’s too late
James Myers
director at Oliver James
Among the alternative offerings available to the ultra wealthy are indefinite inheritance tax exemptions in Monaco, Malta and Gibraltar, and an absence of income, capital gains and inheritance tax in Dubai. In Italy and Greece, flat tax regimes allow the wealthy to avoid paying tax on their worldwide assets for an annual fee of 100,000 euros for up to 15 years.
Italy last month doubled its fee for new arrivals to 200,000 euros ($223,283) in a move its economy minister said was designed to avoid “fiscal favors” for the wealthy. However, Macleod-Miller said the regime would likely remain appealing to the top 1% even at a slightly higher rate.
“Other countries are smelling the fear and actively promoting their jurisdictions and attracting their investment and their families,” Macleod-Miller said.
“Italy is one of those countries which is courting the wealthy and seems to think if you treat them well they will contribute,” he added.
That is also impacting the U.K.’s prime real estate market. James Myers, director at London-based luxury real estate agency Oliver James, saw an uptick in sales activity in anticipation of Labour’s election in July. But now, around 30% to 40% of clients are lowering asking prices to generate a quicker sale.
“A lot of people are worried. They would rather get out now before it’s too late,” Myers told CNBC over the phone. Many of Myers’ multimillionaire and multibillionaire clients have already started to put down roots in Monaco and Dubai, with Italy “becoming a thing” more recently, too, he said.
Transactions in London’s super-prime residential market, which covers homes valued at £10 million and above, fell 22% in the year to July compared to the previous 12 months, according to whole market data published Wednesday by property agency Knight Frank.
Elegant townhouses in South Kensington, London, England, UK.
Benedek | Istock | Getty Images
The decline was most pronounced in properties valued above £30 million, with just 10 sales generated compared to 38 the previous year, which the report attributed to higher buyer discretion.
Stuart Bailey, Knight Frank’s head of super-prime sales for London, noted that Autumn Statement uncertainty had now replaced election uncertainty, with non-doms not the only group being spooked by Labour’s anticipated tax changes.
Ultra-wealthy U.K. citizens, who are typically highly active in the super-prime market, are also in “wait and see” mode ahead of possible changes to capital gains and inheritance tax. It follows previously announced VAT (tax levy) charges for private schools.
“Non doms are a sector of that super-prime market, but they’re not the be all and end all,” Bailey said over the phone.
That is, however, creating opportunities for other investors, Bailey noted. U.S. citizens, who are already subject to U.S. tax on their worldwide assets, and so-called 90 dayers, whose annual stay in the U.K. falls below the tax threshold, could ultimately benefit from reduced competition.
“U.S. buyers, especially those sitting on a lot of cash, would be crazy not to think it’s a good time to buy right now,” he said.
“Private investments” is a catch-all term referring to financial assets that do not trade on public stock, bond or derivatives markets. They include private equity, private debt, private real estate pools, venture capital, infrastructure and alternative strategies (a.k.a. hedge funds). Until recently, you had to be an accredited investor, with a certain net worth and income level, for an asset manager or third-party advisor to sell you private investments. For their part, private asset managers typically demanded minimum investments and lock-in periods that deterred all but the rich. But a 2019 rule change that permitted “liquid alternative” mutual funds and other innovations in Canada made private investments accessible to a wider spectrum of investors.
Why are people talking about private assets?
The number of investors and the money they have to invest has increased over the years, but the size of the public markets has not kept pace. The number of operating companies (not including exchange-traded funds, or ETFs) trading on the Toronto Stock Exchange actually declined to 712 at the end of 2023 from around 1,200 at the turn of the millennium. The same phenomenon has been noted in most developed markets. U.S. listings have fallen from 8,000 in the late 1990s to approximately 4,300 today. Logically that would make the price of public securities go up, which may have happened. But something else did, too.
Beginning 30 years ago, big institutional investors such as pension funds, sovereign wealth funds and university endowments started allocating money to private investments instead. On the other side of the table, all manner of investment companies sprang up to package and sell private investments—for example, private equity firms that specialize in buying companies from their founders or on the public markets, making them more profitable, then selling them seven or 10 years later for double or triple the price. The flow of money into private equity has grown 10 times over since the global financial crisis of 2008.
In the past, companies that needed more capital to grow often had to go public; now, they have the option of staying private, backed by private investors. Many prefer to do so, to avoid the cumbersome and expensive reporting requirements of public companies and the pressure to please shareholders quarter after quarter. So, public companies represent a smaller share of the economy than in the past.
Raising the urgency, stocks and bonds have become more positively correlated in recent years; in an almost unprecedented event, both asset classes fell in tandem in 2022. Not just pension funds but small investors, too, now worry that they must get exposure to private markets or be left behind.
What can private investments add to my portfolio?
There are two main reasons why investors might want private investments in their portfolio:
Diversification benefits: Private investments are considered a different asset class than publicly traded securities. Private investments’ returns are not strongly correlated to either the stock or bond market. As such, they help diversify a portfolio and smooth out its ups and downs.
Superior returns: According to Bain & Company, private equity has outperformed public equity over each of the past three decades. But findings like this are debatable, not just because Bain itself is a private equity firm but because there are no broad indices measuring the performance of private assets—the evidence is little more than anecdotal—and their track record is short. Some academic studies have concluded that part or all of private investments’ perceived superior performance can be attributed to long holding periods, which is a proven strategy in almost any asset class. Because of their illiquidity, investors must hold them for seven years or more (depending on the investment type).
What are the drawbacks of private investments?
Though the barriers to private asset investing have come down somewhat, investors still have to contend with:
lliquidity: Traditional private investment funds require a minimum investment period, typically seven to 12 years. Even “evergreen” funds that keep reinvesting (rather than winding down after 10 to 15 years) have restrictions around redemptions, such as how often you can redeem and how much notice you must give.
Less regulatory oversight: Private funds are exempt from many of the disclosure requirements of public securities. Having name-brand asset managers can provide some reassurance, but they often charge the highest fees.
Short track records: Relatively new asset types—such as private mortgages and private corporate loans—have a limited history and small sample sizes, making due diligence harder compared to researching the stock and bond markets.
May not qualify for registered accounts: You can’t hold some kinds of private company shares or general partnership units in a registered retirement savings plan (RRSP), for example.
High management fees: Another reason why private investments are proliferating: as discount brokerages, indexing and ETFs drive down costs in traditional asset classes, private investments represent a market where the investment industry can still make fat fees. The hedge fund standard is “two and 20”—a management fee of 2% of assets per year plus 20% of gains over a certain threshold. Even their “liquid alt” cousins in Canada charge 1.25% for management and a 15.7% performance fee on average. Asset managers thus have an interest in packaging and promoting more private asset offerings.
How can retail investors buy private investments?
To invest in private investment funds the conventional way, you still have to be an accredited investor—which in Canada means having $1 million in financial assets (minus liabilities), $5 million in total net worth or $200,000 in pre-tax income in each of the past two years ($300,000 for a couple). But for investors of lesser means, there is a growing array of workarounds:
Tarpon Island, a private island in Palm Beach, Florida, sold for $150 million in May 2024.
CNBC
A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
Sales of ultra-luxury homes surged in New York, Miami and Palm Beach, Florida, in the second quarter, even as they fell in much of the rest of the world, according to a new report.
The number of homes that sold for $10 million or more in the second quarter jumped 44% in Palm Beach, 27% in Miami and 16% in New York, according to a report from real estate firm Knight Frank.
New York led the U.S. in $10 million-plus sales, with 72, its highest total in two years, according to the report. Miami came in second with 55, followed by Los Angeles with 42 and Palm Beach with 36. Los Angeles saw a 29% decline in $10 million-plus sales, due largely to the new “mansion tax,” which adds a 5.5% charge on homes sold for over $10 million, the report said.
The biggest sale of the quarter was the $150 million deal in May for Palm Beach’s only private island, reportedly purchased by Australian infrastructure investor Michael Dorrell, according to The Wall Street Journal. In June, a historic 3.2-acre estate in Palm Beach sold for $148 million, while in Manhattan, the penthouse of the Aman New York was sold for $135 million in July.
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While demand in many top luxury markets is slowing from the 2021 peak, ultra-wealthy buyers continue to pay record prices for rare trophy properties, boosted in large part by rising financial markets, Knight Frank said.
“Substantial wealth creation has supported the growth in the global super-prime sales market,” said Liam Bailey, global head of research at Knight Frank. “The transformation of markets like Dubai, Palm Beach and Miami has more than offset the slowing experienced by some more mature markets.”
Globally, in the 11 top luxury markets that Knight Frank tracks, sales of $10 million-plus homes fell 4% over last year to $8.5 billion.
Dubai leads the world in ultra-luxury real estate, with 85 sales in the second quarter, the report said. The city has seen a stratospheric rise, as the ultra-rich from Russia, China, Europe and other areas moved to Dubai for its friendly tax and regulatory regimes. In 2019, Dubai had only 23 sales over $10 million. In the past 12 months, it has had 436 sales — although sales in the most recent quarter fell slightly from last year and the first quarter, Knight Frank said.
London saw one of the largest declines in the world, with sales of $10 million-plus homes plunging 47% from last year on fears of higher taxes on the U.K. wealthy, according to Knight Frank.
Although ultra-luxury buyers usually pay cash for their properties, falling interest rates throughout the world are expected to help support sales in the second half, according to the report.
Last week, 29 contracts were signed in Manhattan for properties priced over $4 million, according to the Olshan Luxury Market report — the strongest post-Labor Day week since at least 2006.
“With rates moving lower, total transaction volumes are likely to tick higher into 2025,” Bailey said.
