Should George Soros have put off philanthropy until later in life?

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George Soros is one of the most remarkable investors in history. After founding his own hedge fund, Soros Fund Managment, in 1972, Soros went on to produce 25 percent per annum returns, making him one of the greatest investors in the history of capitalism and probably the greatest living investor today. His current net worth is over $25 billion, making him one of the richest men on the planet. Read more at The New York Times about George.

But as incredible as it may sound, Soros may have ultimately ended up being far, far richer that he is today, if he had decided to postpone his vast charitable giving until later in life. This is due to the simple fact that Soros is what may be considered a true investor. While many of the people who have made the Forbes 400 list are business people who have been involved, in one capacity or another, the investing of capital, there are very few who have made the entirety of their fortunes solely from the adept choosing of financial instruments.

The crucial difference is that billionaire businessmen, such as Bill Gates or Mark Zuckerberg, who made the vast majority of their fortunes from essentially the single transaction of their company being initially publicly offered on the stock exchange, and true investors, such as Warren Buffett and George Soros, who have made their fortunes through wide array of diverse investment types, is that the latter category, the true investors, have generated what could be called truly compounding returns. This means that they have generated consistent, positive returns over the course of their entire careers, with many people in the true investor category having had no or very few losing years in their entire lives. Read this story about George at politico.com             What this means, simply put, is that any capital that would have been at the true investors disposal 20, 30 or 40 years in the past, would today be worth phenomenal amounts of money. For example, George Soros has generated 25 percent returns. This means that if he would have had a mere $1 million more than he had available to him in the year 1972, today, he would be $2.8 billion richer that he currently is.

But it is safe to assume that he had much, much more capital available to him, throughout the course of his career, than just a million dollars. This is because Soros has given away over $15 billion throughout the course of his charitable giving.                                                                  It is therefore safe to conclude that, had Soros postponed charitable giving until his 80s, he would have been, by far, the richest man in the world today. He would have been, thus, able to give that much more away.

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