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January 12, 2016

Opinion: Vanity Projects Can Be Precarious for Young New Billionaires

Andrew Ross Sorkin, editor of DealBook, a New York Times blog, writes that creating wealth and value in limited domains can give new billionaires a false sense of confidence when they they embark on large-scale philanthropic and business ventures in unfamilar territory.

"With so much money sloshing around, and more and more of the superwealthy pushing into areas beyond their expertise, it is likely we will see more headlines about the failure of some of these fanciful investments and philanthropic experiments," Mr. Sorkin writes. 

He cites as an example the $100 million investment in Newark's public-school system by Mark Zuckerberg, chief executive of Facebook, which was largely deemed a failure, and writes that a learning curve is inevitable as young entrepreneurs become more sophisticated about how charity works best.

Bill Gates, the co-founder of Microsoft, has spent years working to eradicade diseases like polio and malaria, while acknowledging that "in truth, he has spent a lot of money on projects that didn’t work along the way."