Amazon mogul Jeff Bezos is the second-richest man in the world with a net worth of about $250 billion as of late January 2025, according to Forbes. But, believe it or not, not all of his money moves were successful. He has made financial mistakes along the way, from which millennials — currently in their peak earning years — can learn a lot.
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Here are five financial mistakes Jeff Bezos made and the lessons millennials can learn from them in order to improve their own finances.
Chasing Trends
One of Bezos’ most notorious flops was the Amazon Fire Phone — Amazon’s first foray into the Smartphone market. Bezos poured $170 million into the Fire Phone, which launched in July 2014 in an attempt to compete with Apple’s iPhone and the Samsung Galaxy.
But, more specialized in e-commerce, Amazon created a phone that was too expensive, lacked access to many apps and had features that, while innovative, were of limited interest to customers. When consumers failed to bite, Amazon discontinued it just three months later.
Sophie Musumeci, CEO and founder at Real Entrepreneur Women, said, “The failure stemmed from a lack of focus on consumer needs, as Amazon prioritized competing with rivals over delivering unique value.”
Lesson: The financial takeaway for millennials here is to focus on what investments make sense for your individual portfolio rather than just chasing market trends.
Paul Gabrail, founder and host of Everything Money, explained that too many people “are not learning about the WHY of stock market investing and the basic fundamentals of why a stock will perform a particular way over the long-run. Instead, they merely see a stock going up and want to be on it before it goes up higher.”
Inexperienced investors assume that, if other people are hopping on a bandwagon, they should, too. Had Amazon focused on what consumers truly valued in a product or simply stuck to what it did well, as opposed to expediently trying to capture market revenue, this failure may have been avoided. In fact, Amazon broke its own cardinal rule: customer obsession rather than competitor focus.
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Making Hasty Decisions
When Amazon launched in 1995, Jeff Bezos partnered with distributors and wholesalers to initially sell books, movies and music — and soon dominated the online market. Seeking to now become the “everything store,” Bezos decided to branch out and sell toys. However, there weren’t any toy distributors, so Bezos had to buy toys from manufacturers and store them in inventory.
Not only was this a departure from Amazon’s business model, but it went against the advice of other Amazon executives and the head of the toy company. Unable to be deterred and eager to Napoleon his way to internet domination, he did it anyway.
Ultimately, Bezos overestimated how many toys he could sell, winding up with $50 million in inventory that wouldn’t budge, per CSQ.
Lesson: It’s important to always stay level-headed when it comes to financial decision-making. Bezos, riding high on the momentum of his prior success, ignored logic and sound advice.
Senior wealth advisor at Vanguard Chuck Riley explained the importance of coming up with an investment plan and sticking to it long-term, regardless of whether the market is going up or down. Millennials should make investment decisions based on their goals and options available — not pride, ego or emotional exuberance.
Trying To Get Rich Too Quickly
From 1998 to 1999, Amazon quickly made a significant number of mergers and acquisitions across the web. Some of them included Pets.com, Kozmo.com, LiveBid.com, Accept.com, Wineshopper, Drugstore.com, Ashford.com, HomeGrocery and PlanetAll — just to name a few. Unfortunately, Amazon lacked the capacity to work with all of these companies and, as a result, most crashed and burned.
Instead of focusing on a small number of ventures and positioning them for success, Bezos took on too much, too soon in an effort to maximize profit and growth. At Business Insider’s 2014 Ignition Conference, Bezos said, “I’ve made billions of dollars of failures at Amazon.com.”
Lesson: Slow down. The key to making money is compounding. And the secret to compounding is time.
In fact, 99% of Warren Buffett’s $132 billion was accumulated after age 65, according to CNBC. Buffett’s fortune isn’t solely due to being a good investor; he started investing young and remained patient, only later reaping the benefits of compound interest.
Nothing worthwhile happens overnight. Money begets money and success begets success… if one is patient enough to let it play out. It’s incredibly important to steer clear of “get rich quick” mindsets, which open one to burnout and the vulnerability of scams.
Expanding Into an Industry Without Any Competitive Edge
Amazon Restaurants was launched in 2015 in an attempt to compete with UberEats, Door Dash and GrubHub. Unfortunately, it shut down in 2019, because delivery times were too long, delivery fees were too high and the competition offered a much larger restaurant network.
Similarly, Bezos launched Amazon Auctions in 1998 in an attempt to overtake eBay. But Amazon Auctions was less well known and had fewer sellers, buyers and items for sale. It, too, quickly shuttered.
Lesson: Expanding into an industry without any competitive advantage is risky, whether in business or finance.
“Millennials usually make similar mistakes by jumping into industries or side hustles that seem to be raking it in without understanding long-term sustainability,” said Jehann Biggs, president and owner at In2Green. “Drop shipping, day trading and real estate investing are common examples where people get caught up in the potential returns without assessing the risks. Before you commit to any financial decision, ask what your advantage is.”
Not Adequately Protecting Assets
After 25 years of marriage, Mackenzie Scott and Jeff Bezos divorced in 2019. While the divorce was reportedly amicable, it still went down in history as the most expensive divorce ever recorded, with Scott receiving 25% of the couple’s Amazon stock, in turn giving her a 4% stake in the company — translating to a whopping $38 billion — per CNN.
While Scott played an integral role in building Amazon from the ground up, according to Grey Journal, she was not officially a founder. Bezos and Scott, however, did not have a prenuptial agreement at the time of their marriage.
Lesson: While it could be argued that Scott more than deserved her piece of the pie, the fact remains that Bezos could have retained 100% of his wealth had he possessed the foresight to draw up a prenup. No one wants to think anything bad is ever going to happen to them, but it’s important to plan for the unexpected.
Acquiring homeowners insurance in the event of a natural disaster, establishing wills and trusts in the event of one’s untimely demise and, yes, drawing up prenuptial agreements in case of divorce are just some of the ways millennials can achieve peace of mind and financial protection.
Takeaway
While Bezos undoubtedly made mistakes along the way, he used what he learned from each of them to grow and evolve into the massive success he is today.
Millennials should not to feel so hampered by what could go wrong with their finances that they fail to make any money moves at all. While risk assessment is always advisable, financial success sometimes comes down to some good ol’ trial and error.
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This article originally appeared on GOBankingRates.com: 5 Mistakes Bezos Made Financially and How Millennials Could Learn From Them
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
