How Did George Soros Make His Money?

George Soros

George Soros; the man who broke the bank of England is also known as the king of trading. A billionaire with a net worth of US$8.6 billion, George Soros is an ace investor who has given away at least $32 billion to charities, left-leaning politicians, etc. So a man who worked as a railway porter and as a waiter in the early age of his life; how did he make his fortune?

George Soros had a vision and he dedicated his career to things he loved the most. Moreover, he did whatever; he had to achieve his target. He invested money in the right place at the right time and his bet against the Bank of England in 1992 profited $1 billion. Initially, he traded foreign stocks on Wall Street and eventually established his own hedge fund in 1973. He started with $12 million of investor money and made it more than $25 billion by 2018.

Who Is George Soros?

George Soros is a Hungarian-born American billionaire who was born on August 12, 1930. He was born in Budapest and survived the German occupation of Hungary and moved to the United Kingdom in 1947. His father’s name was Teodoro Ŝvarc and he was a lawyer. His mother’s name was Erzsébet and came from a family that owned a thriving silk shop. George Soros studied at the London School of Economics and there he was awarded a bachelor’s. Later, he obtained a master’s, and eventually a Doctor of Philosophy (Ph.D.) from the University of London.

At the beginning of his career, George Soros worked in various merchant banks in the United Kingdom and then the United States. George Soros formulated the General Theory of Reflexivity for capital markets that provide a clear picture of asset bubbles and the fundamental/market value of securities. Moreover, the theory is used to value discrepancies for shorting and swapping stocks. George Soros is a very active supporter of progressive and liberal political causes, therefore; he donated lots of money through his foundation, the Open Society Foundations. In fact, he has donated 64% of his original fortune which makes him the “most generous giver” by Forbes.

How Did George Soros Make His Money?

If you really want to know/understand how George Soros makes his money then you have to know the whole life events of him. So let’s read the rest of the article to know George Soros’s secrets.

Survival Skills Developed During The War

George Soros developed survival skills during World War 1. George Soros comes from a Jewish family where his father was a prisoner in the First World War. His family escaped Russia during the Russian revolution and to avoid problems related to their Jewish religion, his father changed their last name from Schwartz to Soros. So, George Soros experienced the increasing persecution of the Jews when he was young and helped his father in forging documents. So all these events helped George Soros acquire survival skills which helped him overcome every hurdle of his life.

Enter The Right School

George Soros’s educational background has also helped him become a successful investor and finally a billionaire. He joined the London School of Economics in 1947. There, Karl Popper was his mentor who was a philosopher and propounded the concept of open society opposing dictatorship. So, Karl Popper influenced the philosophical, philanthropic attitude of Soros. When George Soros completed his graduation, he got a finance-related job at a bank in London. In 1956 George Soros moved to the USA and started working as an arbitrage trader at F.M. Mayer. F.M. Mayer was a trading farm in New York. Through the first half of his career, George Soros worked as an analyst and trader at multiple firms on Wall Street. George Soros’s major career break was in 1967 when he managed the Eagle Fund for the first time. His success on the first Eagle Fund led to the Double-Eagle Fund in 1969.

The Formation Of George Soros’s Own Company

In 1973, George Soros formed his own company and it was the right time for him to do that. He left the job and with the help of his assistant Jim Rogers he formed Soros Fund Management. In 1978, the fund was renamed Quantum Fund and it generated 47% returns in a 10-year period which earned investors 4200% returns. In 1981, Quantum Fund was valued at $381 million. During that time George Soros was worth approximately $100 million. However, 1981 was not the luckiest year for George Soros and Quantum Fund because Quantum fund made its first loss in that year and its capital reduced to half. George Soros took a break and returned to full-time investing in 1984. In 1985 Quantum fund generated 122% returns and the success continued to 1986. During 1986, the assets of Quantum fund exceeded $1.57 billion. All these successes made George Soros one of the richest stock traders in the world.

Recruiting Of Stan Druckenmiller To Manage The Funds

This was another excellent decision from George Soros that boost his career. George Soros recruited Stan Druckenmiller to manage the Quantum fund in 1988. One of the best decisions from George Soros and Stan Druckenmiller was to short the British pound in summer 1992. This decision has resulted in a $1 billion profit for the Quantum fund. Similarly, George Soros shorted the Swedish krona in November 1992 and it also resulted in a $1 billion profit for the Quantum fund. All these successes increased the worth of George Soros by approximately $650 million in 1992. The same happened for the Quantum Fund and which was valued at $8.3 billion in 1993.

George Soros Currency Speculation

During the Asian financial crisis in 1997, George Soros made a huge short trade of around $1 billion against the Thai baht and made a huge fortune out of it. It showed George Soros’s ability of currency speculation. In 2013, George Soros made Yen short positioned and personally earned an estimated $4 billion.

Establishment Of Soros Fund Management LLC

George Soros founded the Soros Fund Management LLC and he is the current chairman. George Soros stopped accepting funds from outside investors and the Soros Fund mainly exists to provide money to Soros’s charity. George Soros donated a total of $32 billion and now his net worth is estimated at $8.6 billion. Now, George Soros is the 56th richest person in the United States and 162nd globally.

Books And Journalism Of George Soros

Throughout his career, George Soros has written many books, articles, various papers on economics, finance, stock trading, geopolitics, etc.

Books authored Or Co-Authored

1. The Tragedy of the European Union: Disintegration or Revival? (PublicAffairs, 2014)

2. Financial Turmoil in Europe and the United States: Essays (PublicAffairs, 2012)

3. The Soros Lectures at the Central European University (PublicAffairs, 2010) 

4. The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What it Means (PublicAffairs, 2008)

5. The Age of Fallibility: Consequences of the War on Terror (PublicAffairs, 2006)

6. Underwriting Democracy: Encouraging Free Enterprise and Democratic Reform Among the Soviets and in Eastern Europe (Free Press, 1991)

7. George Soros on Globalization (PublicAffairs, 2002)

8. The Bubble of American Supremacy: Correcting the Misuse of American Power (PublicAffairs, 2003)

9. Open Society: Reforming Global Capitalism (PublicAffairs, 2001)

10. With Mark Amadeus Notturno, Science and the Open Society: The Future of Karl Popper’s Philosophy (Central European University Press, 2000)

11. The Crisis of Global Capitalism: Open Society Endangered (PublicAffairs, 1998)

12. Soros on Soros: Staying Ahead of the Curve (John Wiley, 1995)

13. Opening the Soviet System (Weidenfeld & Nicolson, 1990)

14. The Alchemy of Finance (Simon & Schuster, 1988)                                          

Journalism

1. George Soros, “Why I support legal marijuana”, The Wall Street Journal, October 26, 2010

2. George Soros, “The Crisis and the Euro”, The New York Review of Books, August 19, 2010

3. George Soros, “Paulson Cannot Be Allowed a Blank Cheque”. Archived from the original on September 26, 2008, Retrieved May 3, 2012., Financial Times, September 24, 2008

4. George Soros, “On Israel, America and AIPAC”, The New York Review of Books, April 12, 2007

5. George Soros, “The Bubble of American Supremacy”, The Atlantic, December 2003, also audio recording of this article via Assistive Media, read by Grover Gardner, 18 minutes

6. George Soros, “Soros on Brazil”, Financial Times, August 13, 2002

7. George Soros, “Bitter Thoughts with Faith in Russia”, Moskovskiye Novosti (Moscow News), translated from the Russian by Olga Kryazheva, February 27, 2000

8. George Soros, “The Capitalist Threat”, The Atlantic Monthly, February 1997

9. A half-hour Opinions television lecture by Soros was transmitted by Channel 4 on August 1, 1993, and published the following day in The Times as “Why Appeasement Must Not Have Another Chance”

FAQs About George Soros

1. What Is George Soros Invested In?

George Soros is an investor and the Soros Fund Management LLC invested in public equity and fixed income markets worldwide, foreign exchange investment, currency, and commodity markets, etc. So, George Soros mainly made international investments.

2. What Is Black Wednesday?

Black Wednesday referred to an event on September 16, 1992, when the British government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism and it resulted in the collapse of the pound sterling.

3. Who Crashed The British Pound?

George Soros crashed the British pound. This is a legendary event in the global stock market where George Soros bet a huge amount of money against the pound sterling. This action from George Soros has resulted in the British pound devaluing rapidly. Then he bought back the currencies for a lot less money and earned $1 billion in the process.

4. What Are The Three Best Investments Of George Soros?

Throughout his career, George Soros made lots of investments. However, the three best investments of George Soros are – 

1. Bet Against the Pound
2. Bet Against the Baht
3. Bet Against the Yen

5. What Companies Does George Soros Own Stock In?  

Currently, Soros Fund Management LLC is holding 194 stocks. Some of the largest holdings of Soros Fund Management LLC are Liberty Broadband, Vici Properties, and Caesar’s Entertainment.

6. What Is The George Soros Open Society Foundation?

The George Soros Open Society Foundation is established by George Soros. This is the world’s largest private foundation that is working for justice, democratic governance, and human rights.

7. How Old Is George Soros?

George Soros is 90 years old. He is born on 12 August 1930.

8. Who Does The Open Society Foundation Fund?

The Open Society Foundation usually funds human rights groups around the world. They support groups that are working for the rights of all.

9. Is Open Society An NGO?

No, the Open Society Foundation is not an NGO. In fact, it is the largest private foundation established by George Soros in 1993. This foundation is funded by billionaire financier and investor George Soros.

10. What Is England’s Current Currency?

The pound sterling is the national currency of England. 

11. What Is The General Theory Of Reflexivity For Capital Markets?             

The General Theory of Reflexivity is a theory that indicates positive feedback loops between expectations and economic fundamentals. These positive loops can cause price trends that successively differ from equilibrium prices. According to George Soros, reflexivity contradicts the most mainstream economic theory.

Last Updated on June 10, 2021 by Musa D

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