Caitlin's Corner

When Hundreds of Millions $ Is Not Enough

I'll be honest- I only recently warmed up to the idea that billionaires are bad. And even that is tough for me to type, because I don't believe that billionaires are inherently bad, but here's what I 100% believe: it is bad for someone to have billions of dollars.

It used to be easy to see what billionaires wanted: the biggest yachts, rarest art, and sprawling estates etched with architectural excess. This is relatable, to some extent. I mean, many of us can probably point to one version of a fantasy we've had at some point about yachting around a private island with our 100 besties and laughing over exquisite meals. This is the kind of Phase 1 billionaire behavior that is annoying, yet harmless-ish. It allows the rest of us peasants to defend the notion that people who have ultra wealth should be allowed to spend it how they wish- however selfish it might seem.

Then came Phase 2. Philanthropy as prestige, where billionaires could brand universities, museums and hospitals in exchange for tax-friendly legacies. This is next-level wealth, harder to imagine, but still- seems harmless enough, right?

But now, we’ve entered Phase 3 of billionaire power, and it's far from harmless. The yachts no longer thrill. The philanthropy doesn’t suffice. What so many billionaires crave now is direct influence over democracy- from the airwaves, to campaign trails, to policy outcomes.

We're Going From Fortune to Fiefdom

Elon Musk's current stake in Tesla is worth about $178 billion. Musk wants to grow Tesla even more, but has expressed the need for a larger stake in the company in order to do so. To appease him, the Tesla board has proposed a new pay package for Musk that could be worth $1.3 trillion. Musk's current net wealth already commands more money than anyone could spend in ten lifetimes. So, what could you buy with $1.3T that you can't buy with $178B?

The answer, of course, isn’t material things. It’s power. The power to bend markets, sway policy, and- as we've seen already with his massive political donations- reshape the future of entire nations.

And Musk is hardly alone. Miriam Adelson, inheritor of a casino empire, poured more than $90 million into a super PAC for Donald Trump’s 2024 campaign. Timothy Mellon committed $100 million in a single year, half of it to prop up Trump’s political machine. On the other side of the aisle, Michael Bloomberg has become the Democrats’ biggest billionaire benefactor, spending over a billion dollars in 2020 alone to influence elections.

Phase 3: Rewrite Democracy

Phase 3 billionaires are on a mission to buy elections, shape narratives (through the mainstream media they now own), and rewrite the rules of democracy. Their names may not appear on the ballot, but their fingerprints are everywhere.

Getting rich is not the problem. Wanting to get rich is not the problem. When you and I invest, and seek ways to grow wealth and explore financial independence, we're not looking to rewrite democracy.

It’s tempting to dismiss this as the natural evolution of wealth. But make no mistake: Phase 3 is not inevitable. What can we do to stop it?

To start, let's stop normalizing this level of power-grabbing as the American Dream panning out. We should all be free to do what we want with our wealth- unless it means having the ability to buy democracy. There's nothing wrong with aspiring to be wealthy, but let's not aspire to be billionaires.

Also, we can support independent media. Don't forget that Jeff Bezos owns The Washington Post, Rupert Murdoch owns Fox News and The Wall Street Journal, Patrick Soon-Shiong owns the LA Times, and The Ellison Family now owns CBS. All of this to say that if you're consuming news exclusively from these sources, you're hearing what they want you to hear.

It's impossible to write about this without noting that as investors, we can take other actions to avoid inadvertently investing in companies owned by "Phase 3 billionaires". This is not to say that you should feel responsible for having a portfolio that contains any of these holdings, but it IS to say that you can be empowered to have more control over your holdings.

Ways Around Investing in Billionaires

It’s very difficult to completely avoid billionaire-owned companies if you invest in U.S. equities, but you can dilute their dominance by shifting toward equal-weight, thematic, or direct indexing strategies. Don't feel discouraged if you're not ready or willing to take on this step, but if you are, keep reading 🤓.

Here are some concrete steps someone can take if she wanted to start divesting from billionaires (not to be construed as investing advice; please take this as information only and do your own due diligence):

1. Screen Your Funds

• Use tools like Morningstar, ETF.com, or As You Sow’s Invest Your Values to see exactly which companies are in your ETFs and mutual funds.
• Check the top 10 holdings: often these are companies with heavy billionaire ownership (Tesla, Meta, Amazon, etc.).

2. Consider Thematic or ESG Funds

• Look for ETFs that intentionally exclude concentrated billionaire-controlled companies.
• Examples: socially responsible or ESG-screened funds that underweight big tech or fossil fuel giants.
• Keep in mind: ESG isn’t perfect. It’s worth digging into the methodology to ensure it aligns with your values.

3. Shift Toward Equal-Weight Indexes

• Traditional index funds (like the S&P 500) are market-cap weighted, so mega-cap billionaire-run firms dominate.
• Equal-weight ETFs (e.g., Invesco S&P 500 Equal Weight ETF, ticker RSP) give each company the same weight, reducing exposure to outsized billionaire-driven giants.

4. Add Small- and Mid-Cap Funds

• Diversifying into small- and mid-cap funds reduces reliance on mega-cap billionaire-owned firms.
• This can give you broader exposure to companies less dominated by a handful of owners.

5. Explore Direct Indexing (riskier, and time-consuming)

• Some brokerages now offer “direct indexing,” which lets you own the individual stocks of an index but exclude certain companies you don’t want.
• Example: replicate the S&P 500 minus Tesla, Meta, or other billionaire-heavy firms.
• Caution: this can leave you more exposed to fewer companies, and should require that you pay attention to rebalancing more often.

6. Leverage Shareholder Power

• If you do hold shares in billionaire-owned companies through funds, use shareholder advocacy. This is how Elon's previous Tesla payout was challenged!
• Many platforms allow you to vote on corporate governance issues, giving you the chance to push back against outsized executive pay, board structures, or political donations.

7. Rebalance Regularly

• If avoiding billionaire-heavy companies is a priority, revisit your portfolio periodically. Index weights shift constantly, and billionaires’ influence grows when we don’t check in.

These steps require more time, knowledge, and work. My hope is that we'll soon get to an environment where investors have the tools readily available to them to enable them to invest more easily with their values. Until then, keep these pointers in mind, but don't shame yourself for not being able to achieve these time-intensive steps.

What I'm Reading

​📕 Those "Giving Pledge" Billionaires Had Better Pick Up The Pace

Despite this article aging two years, it couldn't be more relevant today. Hats off to Chuck Feeney and Mackenzie Scott, but what about the rest of those billionaires?

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