I don't understand marital instability when you're rich and live in a community property state. Either stay married because there's way too much to lose or stay single, but to philander and divorce is just economic suicide.
This isn't even about the wife--this is about a deal with a former mistress to keep quiet by offering her a token job as an investor at one of his companies.
She doesn't get the memo that she isn't actually supposed to do anything and suggests poorly substantiated investments and potentially does a little fraud... exhausting just reading about it, I'm not sure why I bothered.
There's no real takeaways here except he should just keep it in his pants. Definitely nothing worthwhile for this audience.
It was a lot to read through, and I don't know why we (or the NYTimes) should care, but it sure doesn't seem like "potential" fraud, and it was only "a little" because Eric Schmidt is a billionaire. She totally tried to pull a fast one (registering a company with the same name in a different state to get shares that were his to be transferred to hers). ESH here but the legal system will not look kindly on that bit of subterfuge.
The wife is paid off and fine. The problem is the troublesome girlfriends.
When there’s lots of money and ego at stake, people live their lives differently. Divorce brings acrimony and risk. The guy wants to be a playboy to fulfill whatever need he has, and seems to fritter around and make unwise choices. The spouse gets the prestige and status of being attached to the VIP, and may have her own dalliances.
High level operating people with money or power can afford to live seemingly bizarre lives. They’re just people with the same issues as everybody else, but the cash or influence allows them to make different choices, and for men think with their dick when they aren’t doing business - it’s pretty common.
Yeah, it's absurd to think that someone who probably makes roughly half a billion per year in income off his investments alone, cares about half of his net worth walking out the door.
Significant paper losses, but when you're worth >1 billion (and Schmidt is worth >25 billion) I argue that nominal dollars aren't really about money anymore. They're about power. I can't wring out a single tear for someone who's suffering the loss of going from being really, really, really powerful to merely really, really powerful.
Dividing your stock portfolio isn’t taxable as you aren’t selling anything. Also you can divide up the houses and then if one party’s assessed value is more than trivially different from the other’s, you can make up the difference in the division of the financial assets.
Most people of course have perhaps one house and many do sell it to split the asset value, but as I said in my comment we are talking about the billionaires (in Schmidt’s case) and multimillionaires where there are many more degrees of freedom.
What would he be liquidating? His wife will get some of his stock and a bunch of more liquid assets. That doesn't require 'liquidating' anything. He isn't going to sell a megayacht to 'pay for the divorce'.
You don't understand how finances work for people in his wealth class. When you have billions of dollars in net worth, at a certain point, it's pretty meaningless how much there actually is because it's pretty hard for one or two people to spend it that fast. At a certain level, it might as well be "infinity amount of money."
Then there's the investment income from such a large portfolio.
If you have $1BN in stonks and we assume they rise with the market average of about 10%, minus 3% inflation, plus we'll fudge it a bit lower just for the sake of envelope math...
...you are making $45M/year inflation adjusted off your investments.
Schmidt is worth over $20BN. If only $10BN of that is in stocks, then he's making half a billion a year. That is about $139,000 per day in investment income.
Do you think he cares that his investment returns drop to (inflation adjusted) $75k/day?
Let's assume he loses half his investment income. Let's also assume he's spending every single dime of that annual investment income. Let's also assume he doesn't change his spending after the divorce.* That means that if he lives another 30 years. At $250M/year, that's $7.5BN. Which means he'd die with $3BN in net worth. Which is enough to make $135M in income for whoever gets it.
Do you now understand?
If not, it's like this: you live in the desert. You have a tank next to your house that is your only source of water, and it gets filled every so often. Your daily consumption rate is fairly important, and that tank losing half its capacity, would be a pretty big deal, right? You're going to at least pull out a spreadsheet and run some numbers and see if you're going to make it until the next shipment. You might do your laundry a bit less, not wash your car as much.
Now, let's do the billionaire equivalent: someone lives in the pacific northwest, and their water supply comes from a 1000 acre, ~20 foot deep lake. They also have a town water supply connection.
A magic wizard comes along and shrinks the lake by half its size. Poof! 500 acres gone.
Do you think they pull out a spreadsheet to figure out if things are going to be OK? Do you think their water consumption habits change?
That's what doesn't compute. The wisdom and care required to have and keep billions requires a certain pathological, insouciant public face or internal armor. Sure sexual thrills and "love" makes most people dumber, but a big boy billionaire baller ought to have a certain de rigeuer self-control to not catch the wrong sort of complications or perhaps they should've had a discreet open relationship arrangement a priori.
The thing is… having billions doesn’t actually make you that cool or desirable to women. Maybe it’s nice on paper — like having a cool car, but it’s a condiment. I think a lot of these tech billionaires want what they didn’t have when young and suddenly the facade of it appears in the form of gold diggers… they fall for these traps where they are weak. Eric Schmidt is not a so called “baller” like Leo DiCaprio or Christiano Ronaldo — most average women don’t actually want to sleep with him.
> The wisdom and care required to have and keep billions requires…
I think this is where your logic breaks down. Many billionaires exist due to no more intelligence and ambition than the average person but to have the luck of being born in the right place and time. Many billionaires (Buffett and Gates to name two off the top of my head) have admitted that luck was the primary reason they are multi-billionaires rather than millionaires or lower.
Your "logic" is bullshit because luck doesn't exist. Capitalizing on timing, risk tolerance, excellent anticipatory judgment, self-control, and rich parents also help.
I'd imagine someone like Schmidt is a sociopath, you don't get to where he is just be being a regular "nice guy". I'm not saying he is necessarily evil, but I think it's hard for normal people to relate to people like this. Obviously risk taking is part of a lot of these types profile.
https://archive.ph/KdJpa