What would you do with a $1.2m prize if you earned it by spending thirty years on a question that began with pond algae?
Three scientists found out on Monday. Karl Deisseroth of Stanford, Peter Hegemann of Humboldt University in Berlin and Georg Nagel of the University of Würzburg shared the 2026 Nobel Prize in Physiology or Medicine for optogenetics, switching individual nerve cells on and off with light. The prize is 12 million Swedish kronor, about $1.2m, split between them.
Thirty Years of Pond Algae
The story starts in the early 1990s, with Hegemann trying to work out how a single-celled green alga finds its way towards light. It was not a fashionable question. With Nagel, he identified the protein responsible: a tiny channel that opens when light hits it. Deisseroth then put the gene for that channel into rat nerve cells and found he could fire them with a flash of blue light. Researchers now use the method to map which brain cells drive learning, fear and movement, and it may yet improve hearing implants. STAT’s account of the award sets out the science properly.
I love this because nobody studying algae in the early 1990s could have written a business plan that ended in Stockholm. They were curious, they kept going, and the payoff arrived three decades later from a direction nobody had forecast. I am not a patient person. I find stories like this both inspiring and mildly accusatory.
Where the Money Comes From
Here is the bit that caught my eye. The prize money is not donated each year, and no government pays it. It comes from a portfolio. When Alfred Nobel died in 1896, he left 31 million kronor, about 94% of everything he had, with instructions to invest in “safe securities” and the income given away as prizes. This is the 125th anniversary of the first awards, and that pot is still paying.
It has changed shape over time. For decades the foundation read “safe securities” cautiously. In the 1950s the rules loosened so that it could own shares, and today it looks nothing like a nervous saver’s account. According to the Nobel Foundation’s 2025 annual report, the invested capital stood at 6,744 million kronor at the end of last year, with 56% in shares, 22% in alternative assets, 13% in bonds and cash and 8% in property and infrastructure.
Earn Three, Spend Two
The numbers that matter are smaller. In 2025, the foundation spent 148.1 million kronor in total. Of that, 55 million went to the prizes themselves, and the rest paid for the committees, ceremonies and running of the place. That is a little over 2% of the pot. Its target is to earn at least 3% a year above inflation. Earn three, spend two, repeat for a century. That is the entire trick, and it is so dull that it took me years to take it seriously.
It is not a smooth ride either. Last year the fund returned 0.9% against 4.6% for its benchmark, largely because a stronger krona shrank the value of its foreign holdings. Over five years it has averaged 7.7%. And when things were tight in 2012, the foundation did something most of us find very hard. It cut the prize from 10 million kronor to 8 million, and raised it again only as the fund recovered. This year’s rise to 12 million marks the anniversary, and the foundation says it is meant to keep the prize’s value intact over time.
What I Take From It
I manage less than 6.7 billion kronor (lol), but I am trying to copy. A pot that owns mostly productive things. Spending set below what the pot can reasonably earn. A willingness to trim in a bad stretch instead of pretending it is not happening. And a horizon long enough that a poor year is a footnote. The foundation began in the safest assets it could find, the kind I wrote about in The Boring Market That Quietly Runs Your Life, and learned that safe and sufficient are different words.
The laureates collect their medals in Stockholm on 10 December. The algae, as usual, get nothing. But I’ve been thinking about how science and money turn out to the same story. Somebody did something unglamorous, kept doing it, and left it alone long enough to matter.
The Jacqueline Brand — knowledge builds confidence, and confidence builds wealth. This is editorial commentary for information and education only. It is not financial, investment or professional advice, and nothing here is a recommendation to buy or sell any investment. The Jacqueline Brand is not authorised or regulated by the Financial Conduct Authority. The value of investments can fall as well as rise, and past performance is not a guide to future returns. Figures were correct at the time of publication. Always do your own research and consider speaking to a regulated adviser. Where cryptoassets are discussed, they are high risk and largely unregulated in the UK, and you could lose all the money you invest. The Collection
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