Additional Coverage:
- The Walmart heirs are worth $330 billion. Sam Walton’s smart move in the 1950s is a big reason why. (newsbreak.com)
At a recent Walmart annual meeting in Fayetteville, Arkansas, Rob, Alice, and Jim Walton appeared. The Walton family, known for their association with Walmart, boasts a staggering net worth exceeding $330 billion according to the Bloomberg Billionaires Index, surpassing Elon Musk’s fortune of $237 billion. This immense wealth is largely attributed to a strategic decision made by Walmart’s founder, Sam Walton, over seven decades ago.
In 1953, with only a few stores to his name, Sam Walton adopted his father-in-law’s advice and established his business as a family partnership. He foresightedly allocated 20% shares each to his four children—Jim, Rob, Alice, and the late John T.—while retaining the remaining 20% for himself and his wife, Helen. This arrangement was described in detail in Walton’s autobiography, “Sam Walton: Made in America,” where he highlighted the tax advantages gained by transferring ownership early to avoid hefty gift or inheritance taxes later.
By giving away 80% of Walmart shares to his children when the company’s value was minimal, Sam Walton effectively shielded what would become billions in potential estate taxes, assuming the ownership stakes were passed after his death in 1992, when he was a billionaire. This strategic financial planning not only safeguarded the family’s wealth but also maintained familial unity and taught the children fiscal responsibility from a young age.
Moreover, the family maintained a collective control over Walmart through the partnership, thereby protecting the company from potential hostile takeovers. Sam Walton emphasized the importance of this approach in maintaining modest living and preventing extravagant spending that could lead to financial recklessness among future generations.
Fast forward more than seventy years since the inception of the first Walmart store in Bentonville, Arkansas, the company now generates around $600 billion in annual net sales, employs approximately 1.6 million Americans—nearly 1% of the U.S. workforce—and ranks among the largest global corporations with a valuation around $600 billion. The three surviving Walton children each have a net worth nearing $100 billion, with the majority of their fortune still invested in Walmart stock held in a family trust.
Sam Walton lived a modest life compared to other billionaires and hoped to instill this ethos in his descendants. In his autobiography, he humorously warned future generations against squandering their inheritance on lavish indulgences, insisting on maintaining the prudent financial principles that fueled the family’s success.
The original story can be found on Business Insider.