The Billionaire Paradox: Why Many Billionaires Don't Retire Even When They Can

Most people alive today will never be able to retire. Almost half of all Americans report having no dedicated retirement accounts, and rising living costs mean that Millennials will need more than a million dollars saved to retire comfortably. It’s a bleak outlook for most who will likely be working in some capacity until the day they die.

Working Into The Twilight Years 🌅

Despite this grim reality, there are people with enough money to live several lifetimes in extreme luxury without ever needing to work again. Yet, many still choose to work, even at the expense of their health, family life, and overall net worth. So, what stops so many billionaires from retiring?

Warren Buffett is one example, and even with his children in leadership positions, it doesn't look like he’s ready to retire just yet. Age isn't much of a deterrent; according to Bloomberg, the average age of a global billionaire is now 63 years old. Wealthy people are living longer lives, with male billionaires averaging 63.7 years and female billionaires about 62.4 years old.

Interestingly, there are no billionaires under the age of 30 who are self-made. All have inherited their wealth as billionaires are getting older and richer. An increasing number of them are also working well into their twilight years.

The Cost of Not Retiring 💲

Some think billionaires are just obsessed with accumulating more wealth, but the reality is more complex. For instance, Donald Trump would have been worth as much as $13 billion if he had just taken his $400 million inheritance in 1988 and passively invested it into the S&P 500. This sum is nearly double what he is estimated to have today.

Similarly, Bernard Arnault, the world’s richest man, is still the active chairman and CEO of LVMH at 75. Succession planning has started to worry other investors in the company because Arnault has made it clear he doesn’t want to step down, despite the problems it’s causing for the company.

Three Reasons Billionaires Refuse to Retire 🧐

1. Stuck in Their Jobs Like Everyone Else

A study by Chicago Booth professors found that 69% of billionaires on the Forbes 400 list started their own businesses. The remaining 31% sourced their fortunes from inheritance, lucky investments, or pay packages as top company executives.

The success of some companies relies heavily on a few key people, often the founders who are billionaires on paper. If you start a business that becomes successful, you can't easily retire unless you have a way to liquidate your position. Options include:

• Selling your shares through an acquisition or initial public offering (IPO)
• Generating enough positive cash flow to pay yourself a dividend
• Using your equity in the company as collateral for a personal loan

All these options take time, making it hard for founders to ride off into the sunset.

2. The Psychology of Wealth

Company founders turning down acquisition offers worth tens or hundreds of millions of dollars, which are life-changing amounts for almost anyone, do so because they believe in their company or are addicted to watching their wealth grow.

Consider Tom from MySpace, who sold the site for $580 million and now lives a retired, leisurely life. In contrast, Mark Zuckerberg chose to stay with Facebook, possibly driven by the desire for more wealth or the power and lifestyle that comes with being a top executive.

3. The Attraction of the CEO Role

According to Harvard Business Review, the average CEO works around 62.5 hours per week, only slightly more than the average salaried employee working unpaid overtime. But CEO work is less monotonous, involving big strategic decisions and high-profile appearances.

A high-paying, flexible role offering significant power, where you get to talk to world leaders and celebrities, is a hard gig to give up, especially for those driven to reach such heights in the first place.

Conclusion: Why Work When You Don't Have To? 🤔

Understanding why billionaires refuse to retire involves more than just financial reasons. It’s a mix of being deeply tied to their roles, the psychological allure of accumulating more wealth, and the unique, stimulating work environment they enjoy as CEOs.

Most successful founders are working well into their old age not because they have to but because they choose to. If you still don’t understand why someone would keep working when they could retire into luxury, consider what CEOs actually do day-to-day to understand their commitment better.

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