Make Money Doing Nothing... Not!

Personal Money Planning |

By Gary Silverman, CFP®

The other day I read a headline: Steve Ballmer is set to make $1 billion a year for doing nothing.

The subtext adds that he gets the $1 billion because he owns a bunch of Microsoft stock that pays a lot of dividends.

The sub-context is that he does not deserve the money because he did nothing while millions of hard-working Americans earned a heck of a lot less than that (or at least that’s my assumption) while doing a lot more. How dare he!

Yes, this is another article where Gary tries to be the apologist for some super rich guy. But hear me out.

Steve (may I call him that? I feel like we’re on a first-name basis) was, according to my 10-second research on the Internet, the 30th employee at Microsoft. He apparently was a smart guy because Bill (you can call him Mr. Gates) really wanted him but couldn’t afford him. So, as is rather common in start-ups (especially techy ones), he was given an ownership stake in the company in addition to a modest salary.

I have done the same thing in my company (though to a ridiculously smaller extent). Over the years I’ve had some employees who deserved to be paid a lot more than I could afford to pay them, so I gave them a piece of the firm—a firm that certainly could have gone out of business rather than (mostly) steadily growing for over 30 years. It worked out on both sides of the equation. They worked their butts off for a small salary, it grew the company, they got rewarded.

Similarly, Steve worked for Microsoft for many years helping turn it from a nothing to a really big something.

Still, some would point out that $1 billion is a ridiculous reward for working at a company, no matter how hard you work. And I agree with those people. But I’d like to point out to them that this Microwhatever might have failed—as most tech companies did. (To see what those days were like, I highly recommend the series Halt and Catch Fire which is probably streaming somewhere.)

Steve took a big risk and got a big reward.

If you buy a stock and it pays dividends, do you not deserve it because you did nothing? If you have money in the bank and it pays interest, do you not deserve it because you did nothing? If you have a job, take a vacation day, and get paid, do you not deserve it because you did nothing? The answer is obvious, which points out that the “problem” isn’t that someone got something for doing. The problem is that someone was paid more than we see as fair because they earned more than us.

That’s capitalism for you. Is it fair? Well, I’ve covered the idea of fairness over the years and don’t want to start again. But to summarize: there’s no such thing as fair. I suggest studying philosophy if you want to know more.