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Meet John Havens, the ex-Citigroup president who was charged in the Florida prostitution bust

citibankRobert Galbraith/Reuters

  • John Havens, the former president and chief operating officer of Citigroup, was among those charged in a huge prostitution sting in Florida on Friday. 
  • Havens, among 24 other charged men, was arrested after allegedly paying for sexual services at numerous locations, including Orchids of Asia Day Spa in Jupiter, Florida.
  • Havens was Citigroup’s president in 2011, but resigned from the position a year later
  • Havens was among at least three power players that were arrested in the bust, which also swept of Patriot’s owner Robert Kraft, and founder of private equity firm J.W. Childs Associates, John Childs.
  • Here’s what you need to know about ex-Citigroup president and COO John Havens.

John Havens’ name was on a list of 25 men released by the Jupiter, Florida police department on Friday, accused of soliciting prostitution.


Source: CBS 12

Havens served as Citigroup’s president and chief operating officer, but only held the position for a year. He is currently the chairman of Citigroup’s former hedge-fund division, Napier Park Global Capital.

Mark Lennihan/AP

Source: Bloomberg

Havens came to Citigroup in 2007, when the bank bought the hedge fund he founded with Vikram Pandit. Pandit would go on to serve as the CEO of the bank.

Mark Lennihan/AP

The pair, who met during their days at Morgan Stanley, helped the bank survive the financial crisis of 2008. 

Havens resigned from his position as president and COO of the bank on the day that Pandit quit in 2012, while under pressure from the board.

Source: Bloomberg

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THE US HOME HEALTHCARE REPORT: How US providers are using telehealth to tap into the booming home healthcare market (CVS)

This is a preview of a research report from Business Insider Intelligence, Business Insider’s premium research service. To learn more about Business Insider Intelligence, click here. Current subscribers can read the report here.

US home healthcare is evolving into a massive market for US health systems and hospitals. The US home healthcare market is projected to grow about 7% annually from $103 billion in 2018 to $173 billion by 2026 — outpacing growth in all other care types, including hospital care (+5.3% annually) and physician services (+5.6% annually) — and providers must figure out how to tap into the burgeoning space.

bii us home healthcare marketBusiness Insider Intelligence

US health systems and hospitals are turning to telehealth as a tool to extend care into patients’ homes to improve outcomes, reduce costs, and tap into the home healthcare opportunity. Telehealth — including video doctor visits and remote patient monitoring tech — extends the reach of physicians, enables a constant relationship between patients and caregivers, and offers providers a continuous stream of real-time health data. 

The US Home Healthcare Report from Business Insider Intelligence sizes the US home healthcare market and identifies the industry trends fueling the rise in home-based care. We highlight how providers are using telehealth to deliver quality remote care, and detail other investments providers are making to prepare for the future of home healthcare. We also analyze a case study of a successful home healthcare model, laying out best practices that organizations can adopt to reduce admissions and healthcare costs via home healthcare. 

The companies mentioned in this report are: American Well, Best Buy, CarePredict, CVS Health, Emerald, Epic Geisinger, GreatCall, InTouch Health, Johns Hopkins Medicine, Medically Home, NewYork-Presbyterian Hospital, Philips SnapMD, Teladoc, University of Pittsburgh Medical Center

Here are some of the key takeaways from the report:

  • Home-based care is a large and growing market for US health systems and hospitals, while growth in the services that providers have historically relied on for profitability is tapering off. 
  • The home healthcare market opportunity is driven by the need to manage the healthcare costs and readmission rates of a swelling senior population, as well as the risk of facing financial penalties.
  • Telehealth is a powerful enabling technology that offers traditional health systems the ability to deliver care in patients’ homes.
  • Early trials of telehealth-enabled home-based care programs have reaped lower costs, lower readmission rates, and higher patient satisfaction scores.
  • Providers need to make telehealth and staffing investments now to corner off a chunk of the home healthcare market and fend off growing competition.

 In full, the report:

  • Sizes the US home healthcare market and outlines the industry and demographic trends that are driving the market’s growth.
  • Gives an overview of how telehealth is enabling providers to register positive returns on investment from home healthcare programs.
  • Outlines how providers are likely to face stiff competition in the home-based care market from nonhospital players
  • Highlights best practices and investment strategies that US health systems can adopt to tap into the booming home healthcare market.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the fast-moving world of Digital Health.

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Swiss drug giant Roche reportedly readies to buy the biotech behind the first FDA-approved gene therapy, which just became the priciest medicine in the US (ONCE, RHHBY)

Gene therapy hereditary blindness eye examAP Images

  • Swiss drugmaker Roche is nearing a deal to buy Philadelphia-based biotech company Spark Therapeutics, the Wall Street Journal reported on Saturday.
  • Spark’s gene therapy is for a rare form of blindness and is the first of such treatments to be approved by US regulators.
  • At $850,000, the one-time treatment called Luxturna is currently the most expensive medicine in the country.
  • Spark is also working on gene therapies for hemophilia, a lucrative market for Roche.

Swiss drug giant Roche is gearing up to buy a biotech company behind the first federally-approved gene therapy and the most expensive medicine in the US, the Wall Street Journal reported on Saturday.

Called Spark Therapeutics, the Philadelphia-based biotech created a one-time treatment called Luxturna for a rare form of blindness. It currently costs $425,000 per eye, or $850,000 total. That price tag makes it the priciest medicine in North America.

The Roche-Spark deal could be announced as early as Monday, the WSJ said, at a sticker price of close to $5 billion. As of Friday’s close, Spark had a market value of less than half that amount. 

Founded in 2013, Spark pioneered research on a new class of treatments for a rare, genetic form of blindness called Leber congenital amaurosis at Children’s Hospital of Pennsylvania. In 2017, the US Food and Drug Administration approved Spark’s one-time treatment for the condition, making it the first of such gene therapies to win regulatory approval.

But gene therapies are tough to develop and even tougher to receive.

And although Spark announced earlier this month that it had shipped 75 vials of its new drug and generated $27 million in sales, the company generated less than $65 million in revenue last year, the WSJ reported, and posted a net loss of close to $79 million.

For Roche, the deal is expected to be part of the Swiss pharma giant’s expansion into treatments for hemophilia, a rare disorder in which someone’s blood doesn’t clot as it should because it lacks blood-clotting proteins. Spark is working on treatments for the disorder, which is also a large potential source of growth for Roche. 

Gene therapies are buzzy but costly and hard to get

Gene therapyAP Photo/Eric RisbergSpark’s treatment for blindness falls into a larger category of potentially revolutionary new medicines known as gene therapies. Despite decades of being touted as having the potential to cure dozens of diseases, the treatments remain tough to access. Few have been approved by federal regulators; those that have can cost roughly $1 million to get, and even more to develop.

Earlier this month, Spark said it had shipped 75 vials of its new drug and generated $27 million in sales, according to the Philadelphia Business Journal. Yet the company generated less than $65 million in revenue last year, the WSJ reported, posting a net loss of close to $79 million. 

The approach behind Spark’s treatment — and all other gene therapies — involves modifying a person’s DNA to address the underlying cause of an inherited disease. Doctors take a sample of someone’s diseased cells, correct the errors in the code, and return the corrected cells to the person’s body. Over time, the healthy cells outnumber the diseased ones, and the illness disappears for good, the thinking goes.

Read more: This Silicon Valley startup envisions a future ‘where gene therapies are as accessible as vaccines’

But developing the therapies and getting them to patients has proven a steep challenge. In addition to targeting rare diseases, patients have to pay close attention to the time they take them to ensure they work. Plus, they are expensive and only offered at a small number of accredited facilities, according to a recent analysis from the IQVIA Institute for Human Data Science and the Arm Foundation for Cell and Gene Medicine.

After launching its gene therapy Luxturna, Spark released three different payment models to attract more patients to use it, Business Insider previously reported. Those included paying for the treatment based on how well it works and paying for it in installments over time. 

Spark is also working on gene therapies for hemophilia, a lucrative emerging area for Roche. Two years ago, Roche won FDA approval for Hemlibra, its treatment for one type of hemophilia and a drug that is expected to generate billions of dollars in annual sales. 

NOW WATCH: Earth’s north magnetic pole is on the move — here’s what will happen when our poles flip

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SEE ALSO: This Silicon Valley startup envisions a future ‘where gene therapies are as accessible as vaccines’

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Photos show chaos in Venezuela as protesters and soldiers clash over humanitarian aid shipments

AP_19054509457436Rodrigo Abd/AP

  • Violence erupted between protesters and National Guardsmen at Venezuela’s borders on Saturday. 
  • The opposition to President Nicolas Maduro had organized deliveries of humanitarian aid, which soldiers were ordered to turn away at the border.
  • But Venezuelans desperate for food and medicine showed up and clashed with the soldiers in an attempt to get the aid through. 

Political and economic crisis have brought Venezuela to the brink of chaos.

Violence and protests have erupted in the country over shipments of humanitarian aid that have been stopped at the border. 

As tensions reach a fever pitch over basic resources such as food and medicine, it appears like the country is teetering on the edge of crisis. 

Here’s what you need to know.

Violence erupted in Venezuela on Saturday as citizens clashed with National Guardsmen over shipments of humanitarian aid.

Andres Martinez Casares/Reuters

Source: AP

The 200 metric tons of emergency food and medicine was organized by opposition leader Juan Guaidó who has questioned the legitimacy of President Nicolas Maduro’s second term in office.

Andres Martinez Casares/Reuters

Source: AP

The chaos in Venezuela stems from the 2018 presidential election, in which incumbent Nicolas Maduro was elected to a second six-year term.

Carlos Barria/Reuters

Maduro’s rivals claim that the election was a sham, and last month opposition leader Juan Guaidó declared himself the real president. Nevertheless, Maduro has refused to step down and has maintained control of the country in part thanks to the military, which continues to support him.  

Source: PBS News Hour

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Warren Buffett bashes gold, says the ‘magical metal was no match for the American mettle’ (BRK.B)

warren buffett

  • Warren Buffett isn’t a fan of gold. 
  • In his annual letter out Saturday, Buffett gave an example showing why stocks are a better investment than gold over the long run.
  • This wasn’t the first time that Buffett has bashed the precious metal.

It’s no secret that Warren Buffett doesn’t like gold as an investment.

The legendary investor used an example in his 2018 letter to drive home his point about the importance of not panicking and investing in stocks over gold for the long run. 

Buffett highlighted the 40,000% surge in the US’s national debt over the last 77 years, and said if you "panicked at the prospects of runaway deficits and a worthless currency" and bought 3.25 ounces of gold with your $114.75 (the amount Buffett invested when he purchased his first shares of stock in 1942) it would be worth about $4,200, or "less than 1% of what would have been realized from a simple unmanaged investment in American business."

He added: "The magical metal was no match for the American mettle."

Over the years, Buffet has taken his fair share of swipes at the precious metal.  

At Berkshire’s 2018 annual meeting, Buffett compared $10,000 invested in stocks and gold in 1942 (the first year he invested in stocks). That money invested in an S&P 500 index fund (there were none at the time, he noted) would’ve been worth $51 million in 2018 while a gold investment would’ve been worth only $400,000.

"In other words, for every dollar you could have made in American business, you’d have less than a penny of gain by buying into a store of value which people tell you to run to every time you get scared by the headlines," he said.

And in his 2011 letter, Buffett noted that for $9.6 trillion you could buy "pile a" — all of the gold in the world, or "pile b" — the entire US cropland (400 million acres) plus 16 ExxonMobils and still have another $1 trillion left over.

"Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold," he wrote. "I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B." 

NOW WATCH: Sea cucumbers are so valuable that people are risking their lives diving for them

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Here are the biggest takeaways from Warren Buffett’s annual letter (BRK.B)

warren buffett

  • Warren Buffett, the chairman and CEO of Berkshire Hathaway, released his annual letter to shareholders on Saturday.
  • Buffett discussed items like his plans to repurchase the company’s stock and how a new accounting rule impacts Berkshire Hathaway’s bottom line.
  • The 88-year old investor made no explicit statements about plans for succession at the company.

Each year, Berkshire Hathaway investors and the broader investment community look to chairman and CEO Warren Buffett’s annual letter for company updates and his thoughts on the broader investment landscape. 

This year’s letter was notable for what it did — and did not — include. 

In the 13-page letter, Buffett lamented the new Generally Accepted Accounting Principles (GAAP) policy that slammed Berkshire’s bottom line in 2018, particularly during the volatile fourth-quarter.

The policy, as he warned investors about in last year’s letter, says the total change in unrealized investment gains and losses in stock investments must be included in all net income figures the company reports.

He also discussed share buybacks, something that’s recently drawn political condemnation, at length.

However, the 88-year old Buffett, who leads the company alongside his 95-year old vice chairman, Charlie Munger, did not explicitly make any statements about plans for succession.

Here’s a summary of the biggest themes from Buffett’s letter:

Stock buybacks

Reuters / Brendan McDermid

Buffett said that, over time, Berkshire will become a "significant" repurchaser of its own shares.

The CEO’s methodology for buying back stock is notable given his value-investing philosophy; he’s known for making investments in companies which are considered inexpensive by various valuations measures.

Buffett said Berkshire would buy back stock "at prices above book value but below our estimate of intrinsic value."

The company said last year it would loosen its share repurchase policy when it came to the valuation at which it would consider buying back stock. 

"My expectation of more stock purchases is not a market call," Buffett wrote.

"Charlie and I have no idea as to how stocks will behave next week or next year. Predictions of that sort have never been a part of our activities. Our thinking, rather, is focused on calculating whether a portion of an attractive business is worth more than its market price."

Acquisition plans

Alex Wong / Getty Images

For a second year, Buffett said he and Munger would like to make a large acquisition, but valuations are too high.

In the coming years, they’d like to move much of their excess cash into businesses to "permanently own," Buffett wrote. But that probably won’t happen, at least not in the short-term. 

"Prices are sky-high for businesses possessing decent long-term prospects," he wrote. "That disappointing reality means that 2019 will likely see us again expanding our holdings of marketable equities. We continue, nevertheless, to hope for an elephant-sized acquisition." 

He added: "Even at our ages of 88 and 95 – I’m the young one – that prospect is what causes my heart and Charlie’s to beat faster. (Just writing about the possibility of a huge purchase has caused my pulse rate to soar.)"

Accounting rules

REUTERS/Rick Wilking

The impact the new accounting rules had on Berkshire’s bottom line dominated the first page of Buffett’s letter.

The company in the first- and fourth-quarters recorded losses of $1.1 billion and $25.4 billion, respectively. Its full-year profit took a hit that resulted from the new policy.

"As I emphasized in the 2017 annual report, neither Berkshire’s Vice Chairman, Charlie Munger, nor I believe that rule to be sensible," Buffett wrote. "Rather, both of us have consistently thought that at Berkshire this mark-to-market change would produce what I described as ‘wild and capricious swings in our bottom line.’" 

Buffett also wrote that these swings in the company’s quarterly GAAP earnings would "inevitably continue" due to the large price fluctuations its $173 equity portfolio sees on a daily basis. 

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Warren Buffett warns of natural or human-made ‘megacatastrophe,’ and says our losses will be huge

warren buffettBill Pugliano/Getty

  • Warren Buffett released his annual letter on Saturday.
  • In it he warned about the prospect of ‘The Big One’ — a major hurricane, earthquake, or cyber attack that will ‘dwarf hurricanes Katrina and Michael.’
  • Although he said such a disaster could occur tomorrow or in decades, he warned that it was inevitable and losses would be ‘very big.’
  • Watch Berkshire Hathaway trade live.

Record-breaking investor and Berkshire Hathaway CEO Warren Buffett released his yearly letter on Saturday, and in it he warned about the prospect of "The Big One" — a major hurricane, earthquake, or cyber attack that he said "will dwarf hurricanes Katrina and Michael."

"When such a megacatastrophe strikes, we will get our share of the losses and they will be big — very big," Buffett wrote.

Although such a disaster could happen tomorrow or decades from now, one thing is sure, he said: the catastrophe is inevitable. Yet Buffett said he had a plan for such an outcome.

"Unlike many other insurers," he wrote, "we will be looking to add business the next day." That funding, he said, will come from deferred income taxes, liabilities that Berkshire Hathaway will eventually pay but are currently interest-free.

‘The Big One:’ a matter of when, not if

Hurricane Katrina levee breachAPAlthough Buffett says the catastrophe may take the form of a natural disaster or could be something more surprising, like a cyber attack, experts have warned about the impending nature of the former for decades.

In recent years, concerns about ‘The Big One" from geologists, seismologists, and other scientists have mounted as two things have: First, evidence of our role in a steady shift in climate has mushroomed as we observe more frequent and extreme fires, droughts, hurricanes, and tsunamis. Second, our ability to predict and model the risk of oncoming natural disasters is improving at a steady clip.

Science writer Kathryn Shultz galvanized public attention to the threat in 2015 with the New Yorker essay "The Really Big One," in which she describes how an earthquake could destroy a large chunk of North America’s coastal Northwest.

"The hand of a geological clock is somewhere in its slow sweep," she wrote. "All across the region, seismologists are looking at their watches, wondering how long we have, and what we will do, before geological time catches up to our own."

While some natural disasters are no fault of our own, they are in general being actively exacerbated by issues like hasty building, poor planning, a failure to invest in healthcare infrastructure and environmental protection, and an over-reliance on dirty fossil fuels, according to experts. And the outcomes — which include roof-toppling hurricanes, ground-rumbling earthquakes, and flooding and sea-level rise — will eventually affect everyone.

"The bottom line is it’s going to be bad everywhere," Bruce Riordan, the director of the Climate Readiness Institute at the University of California, Berkeley, told Business Insider two years ago.

"It’s a matter of who gets organized around this," Riordan said.

NOW WATCH: Earth’s north magnetic pole is on the move — here’s what will happen when our poles flip

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SEE ALSO: After you spit into a tube for a DNA test like 23andMe, experts say you shouldn’t assume your data will stay private forever

DON’T MISS: A top psychedelic scientist says ‘the climate’s looking good’ for magic mushrooms and MDMA to turn into medicines at a gathering of the world’s billionaires

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Jeff Bezos just gave a private talk in New York. From utopian space colonies to dissing Elon Musk’s Martian dream, here are the most notable things he said.

jeff bezos blue origin 2x1Axel Springer/Blue Origin/ Business Insider

  • Jeff Bezos, the founder of Amazon, gave a talk to a members-only event at the Yale Club in New York on Tuesday.
  • During the 30-minute lecture, Bezos said his private aerospace company, Blue Origin, would launch its first people into space aboard a New Shepard rocket in 2019.
  • Bezos also questioned the capabilities of a space tourism competitor, Virgin Galactic, and criticized the goal of Elon Musk and SpaceX to settle Mars with humans.
  • Ultimately, Bezos said he wants Blue Origin to enable a space-faring civilization where "a Mark Zuckerberg of space" and "1,000 Mozarts and 1,000 Einsteins" can flourish.
  • Bezos advised the crowd to hold a powerful, personal long-term vision, but to devote "the vast majority of your energy and attention" on shorter-term activities and those ranging up to 2- or 3-year timeframes.

Jeff Bezos may be the richest human on Earth, as the founder of Amazon, but his ultimate dreams reside within a relatively obscure company called Blue Origin.

In fact, as Bezos told the CEO of Business Insider’s parent company in April 2018, he liquidates $1 billion of stock a year to fund his private aerospace outfit.

"I believe and I get increasing conviction with every passing year, that Blue Origin, the space company, is the most important work I’m doing," Bezos said at the time.

On Tuesday, Bezos revisited his grand plans for humanity and gave updates on the work that Blue Origin is doing to help realize that vision. This time he spoke during a private event at the Yale Club in New York City. The Wings Club, a professional aviation group, organized the 30-minute lecture, which was moderated by Jeff Foust, a senior staff writer at Space News.

Their conversation covered everything from Blue Origin’s progress on developing 21st-century rocket engines to backstopping the Mars-settling visions of Elon Musk and SpaceX. Bezos even at one point thanked the crowd for shopping at Amazon and the e-commerce companies it owns.

"Every time you buy shoes, you’re helping fund Blue Origin, so thank you," Bezos said. "I appreciate it very much."

Business Insider has transcribed, lightly edited, and highlighted parts of the talk here.

Bezos said commercial spaceflight today is expensive because it prioritizes reliability, which has the industry stuck on conservative launch systems. He thinks we need more practice to prove the worth and safety of reusable rocket systems.

USAF via Wikimedia Commons

Jeff Foust: The aviation industry is a mature, strong safe industry. Commercial spaceflight is still well on its way to hitting that goal. Where do you see the parallels between aviation and commercial space, and what role will Blue Origin play in that?

Jeff Bezos: I really do think we’re at the barnstorming phase. It’s a very interesting analog to early aviation, because a lot of industries — new technologies — are first used for entertainment. It’s happened over and over again across industries, and of course, barnstorming was one of the first commercial things that small aircraft could do a long time ago. You see that today.

A very prominent case today is in machine learning and artificial intelligence. GPUs [graphics processing units] are instrumental in doing machine learning, but they weren’t invented for machinery — they were invented to play video games.

One of the things that I’m very excited about with New Shepard, which is our suborbital tourism vehicle, is using that to get a lot of practice. One of the equilibriums we’re at today with space launch is that we don’t practice enough. The most-flown vehicles may fly a couple dozen times a year launching payloads into orbit. Anything we do just a couple of dozen times a year, you never get really good at.

Let’s say that you’re going to have some surgery. You should make sure that the surgeon does that operation at least five times a week. There’s real data that backs up the fact that the practice effect makes that surgery much safer if your surgeon is doing it at least five times a week. And so we need to be going to space very frequently in a very routine way. One of the reasons that aviation is so safe today is because we do have so much practice. There are a bunch of reasons why it’s safe — that’s one of them.

We need to have [more] missions. If your payloads cost hundreds of millions of dollars, they actually cost more than the launch. It puts a lot of pressure on the launch vehicle not to change, to be very stable; reliability becomes much more important than cost, and it’s hard to get off of that equilibrium. It actually drives you the wrong directions, where you have fewer launches and very expensive satellites, and that’s what you see happening in many cases.

Reusable launch system’s aren’t good enough alone, Bezos said. They have to be easy to reuse or costs get too high, negating the point of their existence.

NASA Johnson/Flickr

Bezos: What we want to do at Blue Origin is try to get on that practice groove, and to do that you have to have an operable reusable vehicle. The key point there is operability.

The space shuttle was only reusable in the most [daunting] of senses. In reality, they would bring the space shuttle back, inspect it in very elaborate ways, and then re-fly it. It would’ve been better to have an expendable vehicle.

You can’t fly your 767 to its destination and then X-ray the whole thing, disassemble it all, and expect to have acceptable costs. And so that reusability is really the key. What we want to do, our goal — you asked, ‘What is Blue Origin’s goal in this?’ — we want to drive down costs using reusability, and the vision is to figure out how there can really be dynamic entrepreneurialism in space.

Bezos said he admires that Mark Zuckerberg helped create Facebook in a dorm room using existing internet infrastructure. Bezos thinks "a Mark Zuckerberg of space" can’t exist yet — but that Blue Origin is trying to make that possible.

Paul Marotta/Getty Images

Bezos: I’ve witnessed this incredible thing happen on the internet over the last two decades. I started Amazon in my garage 24 years ago — drove old packages to the post office myself. Today we have 600,000-plus people, millions and millions of customers, a very large company.

How did that happen in such a short period of time? It happened because we didn’t have to do any of the heavy lifting. All of the heavy-lifting infrastructure was already in place for it. There was already a telecommunication network, which became the backbone of the internet. There was already a payment system — it was called the credit card. There was already a transportation network called the US Postal Service, and Royal Mail, and Deutsche Post, all over the world, that could deliver our packages. We didn’t have to build any of that heavy infrastructure.

An even more stark example is Facebook. Here’s a guy who literally, in his dorm room, started a company — Mark Zuckerberg started a company in his dorm room, which is now worth half a trillion dollars — less than two decades ago.

How do you get that kind of entrepreneurial [advancement] in space? You need to lower the price of admission right now to do anything interesting space because it requires so much heavy lifting and so much infrastructure development. The entry price point for doing interesting things is hundreds of millions of dollars. Nobody is going to do that in their dorm room. You can’t have a Mark Zuckerberg of space today. It’s impossible. Two kids in their dorm room can’t start anything important in space today.

I want to take the assets that I have from Amazon and translate that into the heavy-lifting infrastructure that will the next generation to have dynamic entrepreneurialism in space — kind of build that transportation network. That’s what’s going on, that’s what Blue Origin’s mission is. If we can do that, then the whole thing will take off and there will be thousands of companies doing creative things.

See the rest of the story at Business Insider

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SEE ALSO: SpaceX’s list of competitors is growing — here are 9 futuristic rockets in the pipeline for the new space race

DON’T MISS: Jeff Bezos nearly died starting his rocket company Blue Origin — here’s what happened

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Here’s exactly how much you’ll pay your mortgage company over 10, 15, or 30 years

single family home for saleAP Photo/Chuck Burton, File

  • When comparing a 15-year mortgage versus a 30-year mortgage, it helps to figure out how much you’ll pay in total over time.
  • Using the standard mortgage calculation formula, we estimated how much mortgage borrowers will pay their mortgage providers over time.
  • Interest rates are critical to how much money a borrower will pay, but so is the time period.

Buying a house is one of the largest purchases many people will make over the course of their lives. And a mortgage will be one of the biggest loans a person will take out.

Monthly mortgage payments are generally calculated using a formula that combines the principal (the amount of money borrowed in the loan), the annual interest rate for the loan (what the lender charges you to borrow that money), and the term of the loan (the number of years it will take to pay the mortgage off).

The formula works backwards from the idea that each month, a borrower will be charged interest on the remaining balance of the loan, and then that balance will be reduced by the amount of the monthly payment. For a standard fixed-rate, fixed-term mortgage, we know how many payments the borrower will be making, and so we can figure out exactly how much they need to pay each month so the remaining balance of the loan is zero at the end of the term.

Using that basic mortgage payment formula, we can come up with some estimates for how much you’ll end up actually paying your mortgage provider over time, based on some of the key parameters of the loan.

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The term of a loan is a huge factor in how much a borrower will pay in total. Shorter-term loans will have a higher monthly payment, but because there is less time for interest to compound, borrowers on a shorter-term loan will end up paying much less interest overall.

Indeed, author Chris Hogan suggested in his book "Everyday Millionaires: How Ordinary People Built Extraordinary Wealth — and How You Can Too" that long-term mortgages are a big reason why many people don’t become rich.

Interest rates also make a big difference in how much a borrower will pay back in total. Higher rates will lead to higher monthly payments and more total interest paid on the loan.

Let’s assume that a borrower is taking out a $250,000 loan under the following three term and rate scenarios:

  • A 30-year term and a 4.25% annual interest rate, which at the time of writing is listed as the mortgage purchase rate offered by Wells Fargo.
  • A shorter 15-year term and a 4.25% interest rate.
  • A 30-year term, but a higher 5% interest rate.

Using the standard mortgage payment calculation, the two 30-year mortgages will have a lower monthly payment than the shorter-term 15-year mortgage:

1 monthly paymentBusiness Insider/Andy Kiersz

Read more: The most and least expensive places to live in America

But that higher monthly payment means accruing less interest over time and paying off the principal of the loan faster. Here’s what the three different scenarios would have paid off over the first 10 years of the mortgage:

2 amount paid after 10 yearsBusiness Insider/Andy Kiersz

After 10 years, the 15-year mortgage would have a much lower outstanding principal balance than the 30-year loans, and the slightly higher interest rate would result in a higher outstanding balance for the 30-year loan at 5% interest:

3 remaining principal after 10 yearsBusiness Insider/Andy Kiersz

The effect of mortgage terms and interest rates can be seen in the total amount paid back to the bank at the end of the 15- or 30-year term. The shorter term leads to much less interest being paid overall, and the slightly higher 5% rate eventually leads to about $40,000 more in interest over a 30-year term:

4 total paid after 30 yearsBusiness Insider/Andy Kiersz

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US inequality is only getting worse, and the ‘dynastic wealth’ bemoaned by Warren Buffett may be one of the reasons why

rich coupleTristan Fewings/Getty Images

  • Income inequality has increased in the US over the years, and many consider generational wealth to be one of its key causes.
  • The fortunes of US family dynasties have been on the rise, and some rich families are taking advantage of new tax laws that make it more flexible for them to pass money on to their heirs.
  • Some billionaires are thinking twice about how they’re tackling generational wealth; Bill Gates and Warren Buffett plan to give most of their money away through the Giving Pledge, instead of keeping it in the family.

The median American family owns just over $80,000 in household wealth, while 15 family dynasties own a combined $618 billion.

That’s according to the left-leaning Institute for Policy Studies’ Billionaire Bonanza report, which examined the growing concentration of wealth in the US by looking at 15 dynastically wealthy families from the Forbes 400 list and data from the Federal Reserve Survey of Consumer Finance.

"Each of these family’s wealth comes from companies started by an earlier generation, either a parent or more distant ancestor," states the report. "Each of them also represents a wealth dynasty passing generation to generation free from interruption."  

Since 1982, the combined wealth of three families — the Waltons, the Kochs, and the Mars — increased by 5,868%, while the median household wealth over the same period decreased by 3%. The families’ combined wealth totals $348.7 billion, quadruple the median wealth of US families.

Read more: The 25 richest American families, ranked

"A lot of folks don’t like to acknowledge the big leg up they get in things like buying a house or avoiding significant student debt as a result of generational wealth," Josh Hoxie, director of the Project on Opportunity and Taxation at the Institute for Policy Studies, told Business Insider.

"That leads to big problems when other people who don’t have generational wealth look around and wonder why they’re so far behind," he continued. "The reality is that the top indicator for economic prosperity is not hard work or intelligence, it’s the family you’re born into."

Generational wealth is seen as a key contributor to the gap between the rich and the poor

From 1978 to 2012, the amount of wealth among the richest .1% of families in the US grew from 7% to 22%, according to a University of California, Berkeley study.

That figure nearly doubles to 40% when looking at the wealthiest 1% of American households, according to a paper published in 2017 by the National Bureau of Economic Research.

"Today’s extreme wealth inequality is perhaps greater than any time in American history," Hoxie wrote in the Billionaire Bonanza report. "This is largely the result of rapidly growing wealth dynasties and a rigged economy that enables the ultra-wealthy to grow their wealth to never-before-seen highs."

In 2015, the income the bottom 99% of families took home was, on average, 26.3 times less than the top 1% of families, according to IRS data reported by the Economic Policy Institute, a nonprofit and nonpartisan think tank.

From 1980 to 2014, income doubled for the top 10% of earners, tripled for the top 1%, and quadrupled for the top .1%, according to The Quarterly Journal of Economics’ "Distributional National Accounts: Methods and Estimates for the United States." 

Read more: Calls to ‘abolish billionaires’ raise eyebrows, but they’ve been a long time coming

In an attempt to even the playing field between the richest and poorest Americans, a number of wealth-tax proposals have been introduced in 2019. Rep. Alexandria Ocasio-Cortez suggested a 60% to 70% top tax rate for Americans earning $10 million or more. Sen. Elizabeth Warren introduced a plan to levy a 2% tax on wealthy Americans’ assets over $50 million and 3% for assets over $1 billion. Sen. Bernie Sanders’ "For the 99.8% Act" would impose a graduated scale for the estate tax that increases to a 77% rate for assets in excess of $1 billion.

And the idea of abolishing billionaires reached a boiling point with a column by Farhad Manjoo in the New York Times in early February.

New tax laws increase flexibility for passing down wealth

Passing wealth down from generation to generation usually happens through a trust.

Most families establish revocable living trusts (meaning they can be changed) as the centerpiece of an estate plan that becomes irrevocable (meaning they can’t be amended) upon their death, Michael Rosen-Prinz, a partner in the Private Client Practice Group at McDermott, Will & Emery who works with ultra high-net-worth clients, told Business Insider. 

But recent tax reform has allowed for more flexibility in estate planning, Alicia Waltenberger, the director of wealth planning strategies at TIAA Institute, told Business Insider.

President Trump’s Tax Cuts and Jobs Act doubled estate tax exemptions and gift tax exemptions. An estate tax is a tax on money or assets transferred upon the trustor’s death, whereas a gift tax is imposed if the transfer occurs while the trustor is living. Several states have a separate state-level estate or inheritance tax.

An individual can transfer over $11 million in assets, and married couples more than $22 million, before being subject to federal estate taxes and federal gift taxes, according to Rosen-Prinz. The exemption amount is set to be halved at the end of 2025, and is subject to changes in new tax legislation, he said. 

"The IRS has made it clear that if the gift and estate tax exemption is reduced, it will have been a ‘use it or lose it’ situation," Rosen-Prinz said.

Sheltering taxes — methods to reduce one’s tax liability — leaves more money for families to pass on to other family members, who can use it to grow their wealth if they choose.

Consider Sheldon Adelson, CEO of casino company Las Vegas Sands who has an estimated net worth of $35.3 billion. From 2010 to 2013, he passed on $7.9 billion to his heirs while escaping $2.8 billion in gift taxes, The Washington Post reported.

"Some families with substantial wealth are using lifetime gifts as seed funding for irrevocable trusts, and then selling interests in closely held businesses and real estate at a discounted value to those trusts to further reduce the value of their taxable estates," Rosen-Prinz said.

Read more: 7 strategies rich people use to pay less in taxes

"Gifting can be done for a variety of reasons," Waltenberger said, "including non-taxable reasons such as having the ability to see the enjoyment and use of the gifted assets now during lifetime, and taxable reasons such as shifting of assets expected to appreciate in the future, so that that appreciation happens in the hands of others, not us where it may be subject to potentially higher income tax rates and/or estate tax at some point."

These tactics are often viewed as the root of massive family wealth, widening the gap between America’s rich and poor.

Some of the superrich are thinking twice about how they pass down wealth

The superrich are beginning to think twice about how they’re passing wealth to their heirs, according to Rosen-Prinz.

"The previous generation’s plan to just transfer as much money tax free down the family tree is being reconsidered in favor of a more nuanced approach based on the personalities and circumstances of the beneficiaries," Rosen-Prinz said.

Older generations may think about limiting the access their children will have to family wealth thanks to highly visible heirs and "trust fund babies" flaunting their wealth on social media, he added, and might include provisions to ensure that the trust can be modified in the future.

"Often, charities or 501(c)(4) social welfare organizations are included as additional discretionary beneficiaries — both to fulfill philanthropic wishes of the settlor and also as ‘overflow valve’ for additional wealth that may not further benefit the human beneficiaries of the trust," Rosen-Prinz said.

Or, the superrich could take a cue from high-profile billionaires Bill Gates and Warren Buffett.

Bill Gates, who has an estimated net worth of nearly $96 billion, and his wife, Melinda, created the Giving Pledge, in which wealthy individuals agree to donate the majority of their money. So far, 189 billionaires, or would-be billionaires, have joined.

The Gates themselves plan to leave only a fraction of their wealth to their children.

And Warren Buffett, the third-wealthiest person on the Forbes 400, pledged his entire fortune to charity and taxes. Buffett has been vocal about his efforts to reduce the vast wealth sitting in the hands of a few influential people.

"Dynastic wealth, the enemy of a meritocracy, is on the rise," Buffett said in 2007. "Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy."

NOW WATCH: What it’s like to do your own taxes for the very first time

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SEE ALSO: Bill Gates says the politicians proposing 70% income tax rates for the superrich are ‘missing the picture’

DON’T MISS: Billionaires who hate Alexandria Ocasio-Cortez’s 70% tax on the superrich are adamant it will hurt the economy — but history suggests otherwise

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