How Jeff Bezos Made His Money, and How He Spends It

It shouldn’t come as too big of a surprise that the creator of a website that can deliver almost any product nearly anywhere within a day is amongst the richest people on the planet, with a net worth that hovers around the $200 billion range. Depending on the ebbs and flows of the stock market, he’s often at the top of the list of Forbes Wealthiest People, battling for the top spot with the likes of Elon Musk and Bill Gates. So how did he amass this substantial fortune and how does he spend it?

Jeff Bezos’s Early Life

Bezos’s roots are fairly humble by most people’s standards. He was born to a teenage mother, and his biological father abandoned both mom and son. After his mother remarried a Cuban immigrant named Mike Bezos, Jeff’s life stabilized and he showed promise as a good student with a high level of curiosity in figuring out how things work. He even created a business as a teen: the Dream Institute, which helped develop creative thinking in young students. 

This served him well, and he was accepted to the very prestigious Princeton University, graduating summa cum laude with a degree in computer science and electrical engineering. He learned the ropes of finance and developed an understanding of the potential of the World Wide Web, which was in its nascent stages in the mid-1990’s.

Jeff Bezos’s Business Track Record

His first and most famous creation, named for the 2nd longest river in the world was “Amazon.com.” First specializing in selling books online, it developed into what we know today as one of the largest global businesses. Bezos battled a lot of early pessimism about the company. Industry journalists jokingly called the company “Amazon.bomb.” There were a host of concerns about the company's proposed model, and its ability to raise private equity. He hoped that going public and selling stock would allow the company to grow in a fast and aggressive manner. It was risky, for sure, but in the end, Bezos was right.

Bezos’ ownership of Amazon is one of the largest drivers of his personal wealth. Amazon’s shares at the IPO were valued at $18 a share. After all the stock splits and ups and downs of the market, the most recent price per share was $3500. As a major shareholder in Amazon, his initial investment has increased in value exponentially. 

The shocking rise of Amazon stock, which is powered by directly democratic flows of supply and demand, is what fuels Bezos’s wealth; NOT any form of exploitation or cheating.

This is because Amazon itself has successfully adapted to a changing marketplace and innovated in several key areas. One of the biggest income streams for Amazon is their web hosting service, AWS. Additionally, Amazon acquired Whole Foods, giving them access to a share of the grocery store market. Many people depend on Amazon’s assistive devices like Echo on a daily basis, giving them a quick and easy way to order items whenever they think of it. Additionally, Amazon expanded into streaming platforms through its Prime video and music offerings and recently acquired the popular Twitch streaming service. Millions of people read books and magazines on Amazon’s Kindle devices, encouraging them to continue buying them through Amazon’s own marketplace. Don’t forget about Ring, Zappos, Audible, and others: brand names owned by Amazon.

In addition to the shares he owns of Amazon, Bezos was an early investor in several other highly successful companies that have seen their share price explode over the years such as Google, Twitter, Uber, Airbnb, and others. No doubt, having an understanding of the potential of the internet put Bezos in a great position to get in early on these stocks.

There’s a host of other smaller companies and projects that Bezos is either an owner of or is a major investor. One of these is the Washington Post newspaper, others include Lookout, which provides cloud security; GRAIL a pharmaceutical, Workday, a financial management software; Business Insider magazine; and the developer community, Stack Overflow.

How Jeff Bezos Spends His Money

So how does Bezos spend his massive fortune? One of Jeff’s largest expenditures may come as a surprise to some: his 2019 divorce from his ex-wife MacKenzie. Jeff’s divorce cost him a whopping $35 billion dollars, making it one of the largest divorce settlements in history.

Bezos also spends a great deal of his fortune on philanthropy. He made 2020’s largest single charitable contribution in his creation of the Bezos Earth Fund, supporting climate-change-related non-profits. He’s also donated millions to various charities around the globe for various causes such as combating homelessness, encouraging literacy, healthcare, and more. 

Though he has donated millions, he has been criticized in the past for not donating enough. His charitable contributions have picked up in pace in the last few years, however.

Jeff Bezos and Blue Origin

It’s not just companies and causes on earth that Bezos spends his money on. 20 years ago, Bezos quietly founded a space exploration company called “Blue Origin” and has spent billions funding it. Its first flight alone cost $5.5 billion dollars and lifted Bezos and a small crew just into the barrier of space for a few minutes, coming back to earth about 10 minutes later.

Despite SpaceX’s dominance in space travel, Blue Origin’s New Glenn rocket beats out nearly everything in sheer size. If properly commercialized, New Glenn can boost per-trip loads to orbit by huge amounts.

Bezos isn’t the only billionaire to start their own space exploration company. Two years after Blue Origin came to life, SpaceX was founded by rival billionaire and Tesla founder, Elon Musk. Unlike the many accomplishments of Amazon, this may be one area where Bezo’s acumen wasn’t as sharp as despite being 2 years younger, SpaceX has exceeded the accomplishments of Blue Origin in nearly every area. 

SpaceX was quickly able to successfully find a way to secure profitable private and governmental contracts for launching satellites into orbit. The SpaceX Falcon 9 has proved itself to be a highly useful and adaptable platform for launching both satellites and later astronauts. The early crewed missions were able to successfully ferry astronauts to and from the International Space Station. Additionally, the Falcon 9 platform perfected the ability for a large portion of the rocket body to return to earth and land on a drone ship with a spectacular level of precision.

So far, Blue Origin is largely a space-tourism company taking wealthy individuals barely into space before coming right back to earth. It’s failed to procure major governmental or private contracts. However, Blue Origin’s model was intended to be a more gradual approach, so it remains to be seen what this company can accomplish.