The Trillion-Dollar Question: How Bill Gates Missed Becoming the World's First Trillionaire

The Richest Man Who Wasn't

In May 2024, something remarkable happened: Steve Ballmer, Microsoft's former CEO, became richer than Bill Gates for the first time ever. The student had surpassed the master. But the real story isn't about Ballmer's rise—it's about the trillion dollars Gates left on the table.

If Bill Gates had never sold a single share of Microsoft stock, never donated a penny, and never diversified his portfolio, he would be worth approximately $1.2 trillion today. That's not a typo. One point two trillion dollars. He would be, by a massive margin, the richest person in history.

Instead, Gates is worth around $130 billion—still an almost incomprehensible fortune, but less than a ninth of what it could have been.

This is the story of two paths diverging in a yellow wood, and how the choice to diversify versus concentrate created a trillion-dollar difference.

The Tale of Two Strategies

Bill Gates: The Great Diversifier

Bill Gates co-founded Microsoft in 1975 and took it public in 1986. At the IPO, he owned about 49% of the company. If he had held that stake, he would own roughly 49% of Microsoft's current $3+ trillion market cap.

But Gates didn't hold. Starting in the mid-1990s, he began a systematic program of selling Microsoft shares. His reasons were sound:

• Diversification: Putting all your eggs in one basket is risky, even if you built the basket.
• Philanthropy: Gates and his then-wife Melinda pledged to give away the majority of their wealth.
• Liquidity: Cash is more useful than stock for buying things and funding foundations.

Over three decades, Gates sold billions of dollars of Microsoft stock. He diversified into a portfolio managed by his family office, Cascade Investment, which holds stakes in companies like Deere & Company, Canadian National Railway, and Republic Services. He also transferred tens of billions to the Bill & Melinda Gates Foundation.

Steve Ballmer: The True Believer

Steve Ballmer joined Microsoft in 1980 as its 30th employee and first business manager. He was compensated largely in stock and, unlike Gates, he almost never sold.

When Ballmer retired as CEO in 2014, Microsoft was widely considered a has-been, a legacy tech company that had missed mobile and was losing the cloud race. Its stock price had been flat for over a decade. Many analysts thought Ballmer had driven Microsoft into irrelevance.

But Ballmer held. And held. And held.

Then Satya Nadella took over as CEO and orchestrated one of the greatest corporate turnarounds in history. Microsoft pivoted to cloud computing with Azure, embraced open source, and rode the AI wave with its OpenAI partnership. The stock price increased roughly 10x from Ballmer's departure to today.

Ballmer's 4% stake, once worth around $15 billion, is now worth over $150 billion.

The Math: What Gates Left Behind

Let's do the math on what Gates gave up:

Gates's Original Stake: ~49% of Microsoft at IPO

Microsoft's Current Market Cap: ~$3.4 trillion (as of early 2025)

Hypothetical Gates Fortune: 49% × $3.4T = $1.67 trillion

Even accounting for dilution from stock-based compensation over the years, Gates would likely still own 35-40% of Microsoft today, worth $1.2-1.4 trillion.

Instead, Gates owns less than 1.4% of Microsoft, worth roughly $50 billion. The rest of his $130 billion fortune is in diversified investments.

The Difference: $1.2 trillion - $130 billion = $1.07 trillion left on the table

Who Made the Right Choice?

Here's where it gets philosophically interesting: Did Gates make a mistake?

The Case for Gates

1. Risk Management: Microsoft could have failed. It nearly did during the antitrust trials of the late 1990s. Diversification protected Gates from company-specific risk.

1. Philanthropy: The Gates Foundation has saved an estimated 122 million lives through its health initiatives. You can't put a price on that.

1. Lifestyle: Gates has lived an extraordinarily comfortable life. The marginal utility of an extra trillion dollars is essentially zero for personal consumption.

1. Peace of Mind: Watching your entire net worth fluctuate with one stock price is stressful. Diversification provides psychological comfort.

The Case for Ballmer

1. Conviction: Ballmer believed in Microsoft when others didn't. That conviction was rewarded spectacularly.

1. Tax Efficiency: Selling stock triggers capital gains taxes. By holding, Ballmer deferred billions in taxes.

1. Outcome: Ballmer is now richer than Gates. In the wealth game, he won.

1. Simplicity: Ballmer didn't need to manage a complex portfolio. He just held one stock.

The Chronos Score Perspective

From a Chronos Score perspective, this comparison is fascinating:

Bill Gates (Age 69):

• Net Worth: $130 billion
• Chronos Score: $130B × (1.10)^31 = $2.4 trillion

Steve Ballmer (Age 68):

• Net Worth: $150 billion
• Chronos Score: $150B × (1.10)^32 = $3.0 trillion

Ballmer's higher net worth and slightly younger age give him a 25% higher Chronos Score than Gates. But if Gates had held his Microsoft stake:

Hypothetical Gates:

• Net Worth: $1.2 trillion
• Chronos Score: $1.2T × (1.10)^31 = $22.2 trillion

That would be the highest Chronos Score of any living person by a factor of 3x.

The Broader Lesson

The Gates-Ballmer divergence illustrates a fundamental tension in wealth management:

Concentration creates wealth. Diversification preserves it.

To become a billionaire, you almost always need concentrated exposure to a single asset—usually a company you founded or joined early. But to stay a billionaire, conventional wisdom says you should diversify.

Gates followed the conventional wisdom. Ballmer defied it. In this particular case, defiance won.

But for every Ballmer, there are dozens of founders who held concentrated positions in companies that went to zero. We just don't hear about them because they're not billionaires anymore.

10 People Who Sold Too Early (and Missed Billions)

The Gates story is not unique. History is littered with founders and early employees who sold their stakes before the real gains materialized.

The Other Side: 10 Billionaires Who Lost It All

Of course, for every story of missed upside, there is a cautionary tale of catastrophic loss. Concentration can create wealth, but it can also destroy it with breathtaking speed, especially when combined with fraud, hubris, or a market crash.

Conclusion: The Ultimate Trade-Off

The stories of Bill Gates, Steve Ballmer, and these other titans of industry reveal the fundamental tension in wealth management: concentration builds wealth, while diversification preserves it.

Gates chose preservation and philanthropy, a path that has changed the world for the better but cost him a trillion-dollar fortune. Ballmer chose concentration, a riskier path that, in this case, led to an even greater financial reward. There is no single right answer, but understanding this trade-off is the first step to truly understanding the nature of wealth.

References

[1] Ballmer Is Richer Than Gates, a First for Microsoft Billionaires

[2] Bill Gates Would Be Worth A Lot More Than Elon Musk If He'd Kept His Microsoft Stock