'Nobel' Ideas On Investing Prize Money
BOSTON — Teddy Roosevelt gave away his Nobel Peace Prize money to help refugees during World War I. Albert Schweitzer used his award to help build a hospital in French Equatorial Guinea. Albert Einstein's Nobel winnings helped pay part of his divorce settlement.
Every year, the Royal Swedish Academy of Sciences pays homage - and cash - to some of the world's physicists, chemists, medical doctors, poets, economists, and government leaders. For the tweed-jacket set, the prize is a recognition of powerful ideas, and the money is something of an afterthought. As a consequence, even the most methodical minds aren't quite sure what to do with their newfound wealth.
"Most of the people who win the Nobel are not used to money," says poet Seamus Heaney, who still hasn't decided what to do with the $1 million that came with last year's Nobel Prize in Literature. "Money is not my art. My instinct is to do nothing until I know what to do with it.
"My bank man said, 'You're mad,'" the Harvard professor adds from his office in Cambridge, Mass. "But I tell him, 'I've been doing my life like this for 57 years.' "
A random survey of Nobel laureates reveals that great minds have some very ordinary ideas about how to treat their serendipitous income. Some use it to pay off old debts, some give it to family members, and others give to favorite charities. This year's crop of winners will enjoy the largest monetary award in Nobel history - $1.12 million per prize. While some may be momentarily at a loss over what to do with the money once it is wired into their accounts, at least they have something to contemplate: The United Nations peacekeeping forces that won the 1988 Nobel Peace Prize got T-shirts.
For Robert Solow and his family, the sudden arrival of Nobel prize money in 1987 "didn't change our way of life." The economist at the Massachusetts Institute of Technology says he paid income tax on his prize money, gave much of the remainder to family members, and saved a small portion to buy a new set of sails for his 24-foot sloop.
Some prizewinners joke about their hasty investment choices. Glenn Seaborg, who shared the 1951 prize in chemistry, has had second thoughts over the past 45 years about the way he used his $16,000 in Nobel prize loot.
"I did something very foolish with my money," confides the professor at the University of California in Berkeley. "I paid off my mortgage. I should have bought IBM stock. If I had done that, I'd have been rich by now."
Yet most living prizewinners would agree that the emphasis of the Nobel ceremony is better placed on elevating ideas, not people.
"The real meaning of this is not to give prizes to persons and thereby create instant celebrities," says Dudley Herschbach, a Harvard University professor who shared the Nobel Prize in Chemistry in 1986. "The real message here is that this little country, Sweden, is reminding us that this kind of thinking is important for mankind."
For his part, Dr. Herschbach remembers thinking, "Holy smokes!" when he received his prize money. He and his wife set up a fund to help struggling artists, and the fund has given nearly $85,000 thus far.
Still, there's a certain prestige and thrill that comes with being listed among great thinkers such as Einstein, Enrico Fermi, and Marie Curie, he says. Even the name has a ring of royalty, he adds.
"Nobel is one of the last magic words in the world," agrees Mr. Heaney, the poet. "I met with Mrs. [Mary] Robinson, the Irish president, and she gave me perhaps the best advice I've ever received. She said, 'This must not become a burden to you. This must make you more carefree.' "
Some prizewinners note that prestige can sometimes be a burden, particularly at social occasions.
"There's an awe or silence at dinner parties," says Eric Chivian, who shared the 1985 peace prize with other founders of the International Physicians for the Prevention of Nuclear War. "Some people don't quite know how to relate to you, and they don't know that you are someone who may not tell very good jokes or have much wisdom."
This year, a new crop of Nobel writers and scientists will be seeking out sound tax and investment advice:
Physics. David Lee and Robert Richardson of Cornell University, New York, and Douglas Osheroff of Stanford University, California.
Chemistry. Robert Curl and Richard Smalley of Rice University, Texas, and Harold Kroto of the University of Sussex, Britain.
Economics. William Vickrey of Columbia University, New York, and James Mirrlees of Cambridge University, Britain.
Medicine. Rolf Zinkernagel of Switzerland and Peter Doherty of Australia.
Literature. Wislawa Szymborska of Poland.
The Nobel fund was created by Alfred Nobel, the inventor of dynamite. One of the world's best-managed endowments, it has steadily grown from its original $9 million pot. The peace prize will be announced today.