The stuff of dreams

From Henry Ford’s utopian rainforest city to Elon Musk’s Falcon Heavy rocket (pictured), history is littered with dream projects of the ultra-wealthy, but are they actually more than just vanity?

As an introduction to the human race, David Bowie’s Space Oddity is sure to be a hit with little green men or women in some far-flung galaxy. No doubt they’ll be clicking their little fingers as the Tesla electric sports car blasting out the song continues its journey through space. 

Those grooving aliens will have billionaire entrepreneur Elon Musk to thank after the PayPal co-founder’s Falcon Heavy rocket, under the auspices of his Space X company, delivered the Tesla payload into space in February.

The event marked a significant step forward in Musk’s aim to send human beings to Mars by 2024, and to do so with reusable rockets, as the Falcon Heavy’s boosters descended back to the Cape Canaveral launch site in one piece.

Musk, who pocketed $180 million when he sold PayPal in 2006, isn’t just spending cash on spaceships. He’s also investing in those Tesla electric cars and energy storage products such as the solar-powered home battery, Powerwall. 

The human body is also in his sights. A venture called Neuralink aims to create devices placed inside the human brain to help improve memory and interface with artificial intelligence software.

While Musk’s escapades may seem a little ‘out there’, he’s not alone in pursuing such ambitious projects. Other mega-rich entrepreneurs are also filling their heads with dreams.

Amazon founder Jeff Bezos, worth $112bn according to Forbes, is pumping $1bn a year into his Blue Origin project, which will also use reusable rocket technology to send tourists and satellites into space.  

Larry Page, co-founder of Google, is another fixated with the galaxies. His Planetary Resources firm is aiming to mine near-Earth asteroids for minerals and water to ‘sustain human life and as propellant for spacecraft’.

Peter Thiel, another PayPal co-founder, has his own plans for water. He’s the co-founder of the Seasteading Institute, which is looking to create a series of floating cities in French Polynesia, with offices, schools and hotels on board. Its aims have evolved from the creation of a libertarian utopia to helping the human race cope with rising sea levels as a result of climate change.

But why bother with human survival when, like Russian media mogul Dmitry Itskov, you can live forever as an avatar? He’s funding the 2045 Initiative, whose end goal is to transfer the mind and thoughts of a human being after death into an avatar with an artificial brain. 

It may be tempting to think that all of the above projects are the fevered thinking of men who have fortunes so vast that they don’t know how to spend them and are living out childhood fantasies of Star Trek and Buck Rogers. But tycoons spending their fortunes on outlandish or innovative personal projects aren’t just confined to the 21st century – you can find echoes of present projects in the past. 

Back to the future

Car manufacturing legend Henry Ford tried to create Fordlandia – a utopian city in the Amazonian forests of Brazil – back in the 1920s. As well as a source of cheap rubber, Ford wanted to build the city on his values, investing in health and schools, communal dances, a strict diet, no alcohol and plenty of gardening.

Ford invested $20 million in the site, but it was eventually sold back, at a loss, to the Brazilian government after World War Two. 

In the world of pioneering transport, Howard Hughes, the US businessman, engineer and film producer, is widely remembered for designing the Spruce Goose in the 1940s. The highly ambitious flying boat was 210 feet long, weighed 800 tonnes and was made entirely out of wood. It only flew once. 

In the medical field, entrepreneur John D Rockefeller invested in the Rockefeller Institute, the first biomedical research centre in the US, after his grandson died of scarlet fever in 1901.

There were also the first stirrings of the importance of renewable and solar energy, as 19th century Tyneside industrialist William Armstrong, who made money out of armaments, also invested in generating the world’s first hydro-electric power. 

Armstrong also predicted in 1863 that ‘England will cease to be a coal-producing country... within 200 years’.

We can appreciate the benefits of the work done by Armstrong and Rockefeller, and there’s a strong likelihood that similar gains for the human race will be made in science and health by the current generation of mega-rich entrepreneurs.

David Lambotte, Client Director, Trust Services, at Estera, says he’s an ardent follower of Musk and insists that what might sound like fun, fanciful schemes are much more complex.

“Musk realises there has to be an economic supporting function to drive his ultimately philanthropic projects,” he says. “He gets our buy-in because his ideas, such as colonising Mars, interfacing mind and machine at Neuralink, or developing electric cars, are ultimately commercially viable ideas.

"He’s secured huge launch contracts from NASA and the US government at SpaceX; Tesla now has a market capitalisation beyond that of Ford; and Neuralink is early stage but has the potential to change what humans are. All of these projects, which sound far-fetched, are profitable ventures.”

But there are huge risks in these projects, as well as potential benefits. Musk recently told the South-By-South-West conference that both SpaceX and Tesla almost went bust a decade ago. Of the $180 million he made when PayPal was sold, he put half into the companies.

But after research and test failures, he was soon down to his last $40 million. “SpaceX is alive by the skin of its teeth, and so is Tesla. If things had just gone a little differently, both companies would be dead,” he said.

Reality check

So, what lessons, if any, can be taken by HNWIs or entrepreneurs looking to invest in personal projects? As a trustee, when faced with a beneficiary seeking funds for an entrepreneurial endeavour – perhaps not a rocket or floating city, but still requiring significant capital – Lambotte takes the professional approach. 

“We have a duty of care to the beneficiaries of the trust fund, based on all their needs, and to follow the expression of wishes we have from the settlor,” he says. “We ultimately apply ‘prudent man’ standards. Is it an intelligent investment? Do they have a solid business plan and realistic forecasts? Are they going about this the right way? It isn’t risk avoidance, more a case of risk management.”

When it comes to exotic hobbies or interests, be it rebuilding steam trains or collecting art, it’s often preferential for a settlor, if alive, to keep that portion of his or her wealth outside a trust. 

“The trust fund is ultimately the safety net, the rainy-day fund, intended to last for some time,” says Lambotte. “Entrepreneurs are best to keep their ‘play money’ outside of the structure and get some sound advice to ensure they don’t fritter it away.”

Chase de Vere Head of Communications Patrick Connolly says hobbies can take the form of traditional alternative investments, such as art, coins, classic cars or wine, but care should be taken in less familiar territory. “You get investments that are expensive, unregulated and illiquid, with potentially volatile performance and that produces no income. This isn’t exactly attractive to most investors,” he says. 

Nevertheless, you may be inspired to follow the likes of Musk, Bezos, Rockefeller and Armstrong and invest your hard-earned cash in projects that can help empower the human race. But if you’re going to go after your dream project, with all its associated risks, you might want to take Bowie’s advice and ‘take your protein pills and put your helmet on’.