How Jeff Bezos Became One of the World’s Richest Men
As of late 2021, Jeff Bezos is the second-richest person on Earth, with his personal fortune eclipsing the wealth amassed by Microsoft Corp. co-founder Bill Gates and legendary investor Warren Buffett. According to the Bloomberg Billionaires Index, Bezos has a net worth of $197 billion as of this writing.
The founder, former chief executive officer (CEO), and now executive chair of global e-commerce behemoth Amazon was responsible for running a platform that accounted for up to 9% of all U.S. retail sales and a whopping 51.2% of digital retail spending in 2020.
As digitalization reshapes human behavior and the cloud computing revolution does the same to enterprise, the leader in online retail, with its high-flying cloud computing platform Amazon Web Services (AWS), is only forecasted to propel higher—spelling more good news for its founder.4
When Bezos had the idea for his e-commerce company, his well-intentioned boss tried to talk him out of quitting his stable job with D. E. Shaw & Co. Yet Bezos, raised by his teen mom and later his Cuban immigrant stepfather, always dreamed of creating something different, once telling his schoolteachers that “the future of mankind is not on this planet.”
Bezos even has a website, BezosExpeditions.com, that provides a rundown of more than 30 of his major investments, projects, and philanthropic endeavors. The name “expeditions” is appropriate since Bezos’ investments are not concentrated in just one or two industries or even market sectors; rather, they represent a far-flung exploration of many different business areas and ideas, including cloud computing, robotics, biotechnology, and even home-blown glass.
Amazon: Beyond Books
The tech visionary graduated from Princeton with degrees in computer science and electrical engineering. Upon graduating, he turned down job offers from companies such as Intel and Bell Labs to join a startup called Fitel. He went on to launch a news-by-fax service company with Halsey Minor, the founder of CNET. After that venture failed, Bezos became the youngest senior vice president at a hedge fund called D. E. Shaw, working his way up the ranks in just four years.
Bezos might have stayed on Wall Street for the rest of his career if he hadn’t been enthralled by the knowledge that, by 1994, the Internet was growing at a rate of 2,300% annually.6 Soon enough, his idea for Amazon was born, and the future CEO began making a list of 20 possible product categories to sell online.
Amazon.com, then a platform for selling books, grew in its early stages out of a garage with a potbelly stove. Bezos, who put his own $10,000 into the company comprising himself, his wife, and two programmers, ironically conducted most of his meetings at the neighborhood Barnes & Noble.8 Within its first month after launch in July 1995, Amazon sold books in every U.S. state and 45 countries around the world.
Beating Expectations
During Amazon’s first year, Bezos tried to raise money by predicting $74 million in sales by 2000, far underestimating the reality: $1.64 billion in sales in 1999 alone.1011 He managed to gather $1 million in seed funding from angel investors after using up investments from his family—primarily from his parents, who contributed a significant portion of their life savings.
The first approximately 20 investors in Amazon put in about $50,000 each for a stake rounded to 1%. Each investment would now be worth approximately $16.71 billion, representing a roughly 334,200-times return, given that the investors held onto their entire stakes and that they had never been diluted by later investors.12 In June 1996, Amazon raised another $8 million in Series A from venture capital firm Kleiner Perkins.
Amazon went public in May 1997 and turned out to be one of the few startups that survived the dot-com bust. As the platform diversified its product offerings and solidified itself as a market leader and pioneer, annual sales skyrocketed from $511,000 in 1995 to more than $3 billion in 2001. In 2013, Bezos revealed his plans for the company’s revolutionary Amazon Prime subscription business, with Amazon Prime Air, which would use drones to make deliveries to customers.
In 1998, Bezos also became an early investor in Google. While he hasn’t revealed what amount of the stock he owns after its initial public offering in 2004, his $250,000 investment would be worth billions today.
In August 2013, Bezos bought The Washington Post for $250 million.17 A couple of years after, its audience and traffic exploded, surpassing The New York Times for the first time in terms of U.S. unique web viewers in October 2015.18
Amazon’s share price reflects its phenomenal growth. The stock increased more than 450% from January 2016 to January 2021 and rose more than 75% from January 2020 to January 2021 alone.19 Bezos owns about 11% of Amazon as of 2021, making it the largest source of his wealth.20 From 2017 to 2019, Bezos sold more than a million shares and distributed additional shares to his now-ex-wife as part of divorce proceedings. The company’s 2021 annual meeting announcement showed Bezos owning more than 70 million shares.
Real Estate
Bezos also has substantial holdings in more traditional investments, such as real estate. His 165,000-acre Corn Ranch in Texas was acquired as the base of operations for his aerospace company, Blue Origin, and serves as the test site for the vertical-landing manned suborbital New Shepard rocket.
His personal real estate includes holdings on the East and West Coasts. Bezos has two multimillion-dollar homes in Beverly Hills and a 10,000-square-foot apartment in the Century Tower in Manhattan that cost him just under $10 million. Bezos’ New York presence is reported to have boosted Century Tower property values even higher, with space selling for $2,000 to $3,000 per square foot. He also has a lakeside property in Washington state, on which he spent $28 million to increase the living space to almost 30,000 square feet.
In 2012, Amazon bought its own South Lake Union headquarters building in Seattle for $1.5 billion, instantly making the company one of the city’s largest commercial property owners. Amazon took possession of nearly a dozen buildings, almost 2 million square feet of office space, and approximately 100,000 square feet of retail space. In August 2017, The Seattle Times reported that Amazon had as much office space as Seattle’s next 40 largest employers combined.
Charitable Donations
Bezos has also invested very sizable sums in giving back through charitable donations. In addition to the Bezos Family Foundation that funds several education projects, Bezos has made individual multimillion-dollar charitable contributions to Seattle’s Museum of History & Industry as well as to his alma mater, Princeton University.
Museum of History & Industry. “Jeff Bezos Donates $10 Million to Create ‘Center for Innovation’ at New MOHAI Museum in South Lake Union.” Accessed Nov. 17, 2021.
In January 2018, Bezos and his now-ex-wife, MacKenzie, announced a $33 million donation to TheDream.US, an organization working to improve college access for undocumented immigrant youth who were brought to the United States as young children. The grant will provide college scholarships to 1,000 U.S. high school graduates with Deferred Action for Childhood Arrivals (DACA) status.
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