How Much Will Jeff Bezos’ Divorce Cost? Tens Of Billions

Jeff Bezos Divorce Will Cost Him Billions

Jeff Bezos and his wife, MacKenzie, are getting a divorce after 25 years of marriage, according to a joint statement put out Wednesday on the Amazon CEO's Twitter account. Jeff Bezos is of course, the founder of Amazon, and worth over $130 billion dollars depending on the stock price.

Given MacKenzie and Jeff married before Amazon's huge run up, it's safe to say that Jeff Bezos' household net worth will be cut in half, unless a prenup was put in place.

When it comes to divorce, the wealth accumulate AFTER the marriage is what's common divided up equally. With a household net worth over over $130 billion, it's not inconceivable to imagine the divorce will cost Jeff Bezos close to $65 billion. Washington is a community property state.

In November 28, 2018, Bezos owned 78.8 million shares of Amazon, or 16.2% of the company. One can do the net worth calculation from there. Obviously, Jeff and MacKenzie own other assets outside of Amazon stock as well.

Here is Jeff and MacKenzie's statement:

“After a long period of loving exploration and trial separation, we have decided to divorce and continue our shared lives as friends. We feel incredibly lucky to have found each other and deeply grateful for every one of the years we have been married to each other. If we had known we would separate after 25 years, we would do it all again.

This is a touching statement that couldn't be better written. Bezos, 54, and MacKenzie, 48, met and got married while working at D.E. Shaw, a New York-based hedge fund, in the early 90s. Shortly after, they packed up and moved across the country to Seattle, where Bezos launched Amazon.

Although losing $50 or $60 billion plus would be a record loss in a divorce, Jeff and MacKenzie built the company together. They were a team, and I see no problem why their assets shouldn't be split equally. Heaven knows you can still live a good life off of $50 – $60 billion !

We know that one man is probably a little excited, and that's Bill Gates, who would reclaim his throne as the world's richest man after the Bezos split.

Divorce is the #1 destroyer of wealth today, followed by overconsumption of things we don't need using debt. Roughly 40% of married couples end up going through a divorce, which ultimately divides assets based on the wealth accumulated during the time of the divorce.

Not only does divorce split wealth, divorce is also very hard on an adolescent child. According to endless research, after a divorce, kids are likely to experience distress, anger, anxiety, and disbelief. Here are some of the emotional impacts a divorce may have on a child:

  • Young children often struggle to understand why they must go between two homes. They may worry that if their parents can stop loving one another that someday, their parents may stop loving them.
  • Grade school children may worry that the divorce is their fault. They may fear they misbehaved or they may assume they did something wrong.
  • Teenagers may become quite angry about a divorce and the changes it creates. They may blame one parent for the dissolution of the marriage or they may resent one or both parents for the upheaval in the family.

Despite all these facts, couples with children STILL get a divorce because they just can't take each other anymore. Despite Jeff and MacKenzie's lovely statement, there were obviously conflict that became untenable for them to stay together for the sake of their 4 children.

If you're constantly fighting in front of the children, you're probably doing more damage staying together than divorcing.

Let's talk about how we can prevent a divorce.

How To Prevent Divorce

1) Get your finances down. Money is the #1 reason why couples fight. Yet, the Bezos had all the money in the world and still got a divorce. But for the rest of us, we need to get our money down right in order to relax and enjoy the little things in life.

If we're always stressed out about money, money is going to eat into the core of the relationship like a worm. The best think you can do is to track your finances like a hawk. Use a free financial tool online by Personal Capital to track your net worth, get a holistic overview of your risk exposure, and stay on top of you retirement plans.

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2) Build passive income to be free. Passive income is the holy grail for living a comfortable early retirement life. To do so, you need to build a large enough after-tax income portfolio that pays enough income to cover your expenses. It is not enough to max out your 401(k) and IRA.

Here's an article I wrote that highlights all the passive income investments you can make: Ranking The Best Passive Income Streams

3) Develop an outside support group. Don't only rely on your spouse for support. You must develop your own friends and acquaintances. Find hobbies or sports. Join social groups. An outlet is important.

4) Always be communicating. Marriages take work. We must continue to speak our minds when something is bothering us and find solutions to our problems. It's important NOT to let issues fester.

The best solution is often a compromise. Listen to your spouse's needs, instead of just thinking of your own. Ask for your spouse to share her feelings immediately after you notice something wrong.

Communicate, communicate, communicate! Destroy the ambiguity!

5) Create boundaries. Do your best not to bring your work home to your spouse and vice versa if you are a stay at home parent. Letting someone who wronged you that day spillover to negatively treat your spouse is toxic.

Make an agreement that once you step in the door, you start new. Take some time to unwind. Then start communicating.

6) Forgive and ask for forgiveness. Nobody is perfect. Recognize this fact. If you do something wrong, ask for forgiveness. If your spouse does something wrong, grant forgiveness. Give each other forgiveness credits!

Divorce by race
Divorce is a wealth destroy

7) Be kind and recognize effort. The worst thing we can do as spouses is ignore our spouse's efforts. Let us tell our significant others every night how much we care and appreciate them. Let's highlight specific reasons for our appreciation, rather than a blanket statement.

It is also important for us to be consistent in our mannerism. So much of life is a public show due to the internet and social media. We can't treat our spouses with respect and love in public, and then privately berate them and take them for granted.

8) Consider keeping separate finances. One of the reasons why a spouse can get resentful is if he or she always feels like he or she has to ask for permission before spending money. By having your own separate checking or savings account, this strategy helps relieve this pressure as nobody likes asking for permission, especially as a mature adult.

If keeping separate finances is too extreme, then create a third account for free spending. The third account can be treated as a savings account that is built up over time to be spent on whatever a spouse desires.

Avoid Divorce At All Costs

It is sad that Jeff and MacKenzie Bezos got a divorce. They will probably be fine given their wealth, status, and network. But for the rest of us, divorce can be extremely hard on our personal lives and on our finances.

We must not take our spouses for granted. Recognizing effort and respecting each other are keys to a healthy marriage.

As long as we can remind ourselves that none of us are perfect. And as long as we can forgive each other for our transgressions, I believe more marriages can flourish than fade.

Jeff and MacKenzie are going to do just fine after divorce. With Amazon's stock performing well in 2020 as everybody moves online due to COVID-19, they've already recouped much of their losses!

Recommendation To Build Wealth

Personal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. It's important to stay on top of your finances so you can ironically not have to worry about your finances as much during a marriage. Run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.

After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Definitely run your numbers to see how you’re doing. I’ve been using Personal Capital since 2012 and have seen my net worth skyrocket during this time thanks to better money management.

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Personal Capital sample retirement planner calculator. Are you on track? Click to find out.

About the Author: Sam started Financial Samurai in 2009 as a way to make sense of the financial crisis. He proceeded to spend the next 13 years after college working in finance. In 2012, Sam was able to retire at the age of 34 due to his passive income investments. He spends time playing tennis, taking care of his family, and writing online to help others achieve financial freedom.