3 things rich people shouldn’t do and 1 they should
Scott Mlyn | CNBC
According to billionaire Leon Cooperman, if you have amassed more wealth than you need, there are a number of ways to deal with the excess money.
Omega Family Office founder Cooperman, who has an estimated net worth of $ 2.5 billion, shared his views on the stock market, technical valuations, taxes, and the uses of accumulated wealth in an interview on CNBC’s “Squawk Box” on Friday ” With.
His comments are timely as they are in a debate about how the richest Americans should be taxed.
On Wednesday, President Joe Biden unveiled the $ 1.8 trillion plan for American families, which will be paid for by increasing taxes on the richest citizens and closing certain loopholes such as “topping up”, interest rates and special real estate tax breaks should.
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Cooperman himself has fought against Senator Elizabeth Warren, D-Mass., Over a property tax, which she sees as part of a fairer tax system. He recently declined an invitation from Warren to testify at a Senate tax hearing.
“I believe in the progressive income tax structure, I believe rich people should pay more,” said Cooperman, adding, “The wealth tax doesn’t make sense to me for a number of reasons.”
He says there are other ways to meet Warren’s goals, like increasing the marginal tax rate or removing gaps such as interest income that allow certain businesses to defer taxes, and which are included in Biden’s most recent tax plan.
Here are three things Cooperman says people shouldn’t do when they have accumulated wealth – and one thing they should do.
1. Don’t consume too much
When you have extra money, spend it on things you want, Cooperman said.
“Buy planes, art, houses – things like that.”
In the long run, however, it isn’t as helpful as saving, investing, or finding other uses for your money. Cooperman said he was not a great collector of items himself and preferred to be more humble.
“My wife and I happen to think that material possessions cause trouble,” he said. “We are ‘less is more’.”
2. Don’t give everything to your children
Many families save and invest their money in the hope of passing it on to future generations. But for the ultra-rich, according to Cooperman, giving all their money to their kids may not be a good idea.
“When you have a lot of money, it is a mistake to give all your money to your children because you are depriving them of self-actualization,” Cooperman said.
3. Don’t give too much to the government
“Only a fool would give the government more money than they are entitled to,” Cooperman said. “You pay your taxes as a good citizen and you keep the rest.”
Cooperman added that everyone should pay their taxes, but the investor has their own idea of what is a fair share for wealthy Americans.
“I’m willing to work six months a year for the government and six months for myself, that seems reasonable to me,” said Cooperman. “In addition, it will be confiscating.”
4. Last and best: donate it
The best use of the wealth that has accumulated is to donate it to charity or help others, Cooperman said.
“Recycle it back into society and try to make the world a better place,” he said. “And that is my obligation.”
In 2010, Cooperman and his wife committed to donating most of their wealth to philanthropy or charity through the Giving Pledge, an initiative by Bill and Melinda Gates and Warren Buffett.
“I’m far from the most generous man, I wish I had more money to give away,” said Cooperman.
He said the current tax system is an incentive for the rich to give away their money – especially those who can donate valued assets such as stocks on which they have not paid taxes.
“The tax code was designed to encourage philanthropy,” said Cooperman. “The more you give away estimated pre-tax dollars, your costs will be reduced.”
In addition to tax breaks, Cooperman has other reasons to donate his fortune: He likes it, he said.
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