Richistan chapters 1-12
Flashcard maker : Noel Macdonald
The Starkey Mansion Denver Colorado
– Starkey International Founder, Mary Starkey
– Starkey is the oldest and largest butler school in the country
– Students pay more than $12,000 to attend
– Starkey is the oldest and largest butler school in the country
– Students pay more than $12,000 to attend
The Ballet of Service
– A complex routine where all the waiters must serve the plates to quests in perfect sync.
– Designed to show off all the desired traits of a butler-to-be, discipline, agility, poise and intimacy
– To become masters at the care and feeding of the rich in eight weeks
– Designed to show off all the desired traits of a butler-to-be, discipline, agility, poise and intimacy
– To become masters at the care and feeding of the rich in eight weeks
Eight weeks
They learn to cook, clean, polish, dust, wash and fold, Iron a set of French cuffs in seconds, clip 1926 Pardona cigars, dust Kooning canvas, pair an oaky chardonnay with roasted free-range game hen, Clean a forty-five thousand square foot mansion (dividing into “zones” for cleaning and maintenance) Design “stationary wardrobes”- envelopes and letterhead to reflect the owner’s wealth and social standing
Rules
– wear a uniform of khakis, crisp white shirts, blue blazers, and brown shoes
– everyone is “Mr.” or “Mrs.” stress the importance of boundries
– rise from your seats every time a visitor enters the room
– everyone is “Mr.” or “Mrs.” stress the importance of boundries
– rise from your seats every time a visitor enters the room
Old School and New School
– Ms. Starkey has a great understanding about the new Richistanis, but maintains some “old school” tradition
– For instance: The new Richistanis like for the butlers to think that they are more middle class, even though they wear Burberry and have Master’s art everywhere
– Today’s Richistanis like to be “chummy” with their help. They try to get the staff to call them by their first name. However, Ms. Starkey says to never call them by first name, but to insist calling everyone “Mr.” or “Mrs.”
– For instance: The new Richistanis like for the butlers to think that they are more middle class, even though they wear Burberry and have Master’s art everywhere
– Today’s Richistanis like to be “chummy” with their help. They try to get the staff to call them by their first name. However, Ms. Starkey says to never call them by first name, but to insist calling everyone “Mr.” or “Mrs.”
Service Management Model
Butlers spend over 100 hours learning this system
– 1st-Service Vision- butler details exactly what kind of atmosphere he/she is trying to create in the house
– 2nd- People section- butler details family tree, family goals, values, lifestyles, and schedules
– 3rd- Environment section- describes the physical dimensions of the house and grounds
– Core of the System-Standards Matrix- “10 Service Standards and Perpetual Service Variables”
– 1st-Service Vision- butler details exactly what kind of atmosphere he/she is trying to create in the house
– 2nd- People section- butler details family tree, family goals, values, lifestyles, and schedules
– 3rd- Environment section- describes the physical dimensions of the house and grounds
– Core of the System-Standards Matrix- “10 Service Standards and Perpetual Service Variables”
Who are the butlers?
– Household Managers are younger and they are often college-educated
– Most likely to be women.
– Most are in their 30’s or 40’s
– Most have come from the service professions, like hotels, restaurants, or resorts
– All claim to be committed to “the service heart”
– Most likely to be women.
– Most are in their 30’s or 40’s
– Most have come from the service professions, like hotels, restaurants, or resorts
– All claim to be committed to “the service heart”
3 Major Wealth Waves in the US
– 1st begins after the civil war, grows from big oil, steel, and railroads
– 2nd the roaring 20s , grows from wartime profits and the advent of radio, moving pictures, autos and telephones
– 3rd Starting in the 90s, grows from a convergence of technology, free-market polices, and finance
– 2nd the roaring 20s , grows from wartime profits and the advent of radio, moving pictures, autos and telephones
– 3rd Starting in the 90s, grows from a convergence of technology, free-market polices, and finance
Ch. 2- The Wealth of the 3rd wave
The 3rd Wave Globally
The 3rd Wave Globally
The wealth generated in the 3rd wave far surpassed the previous 2, with half of Americas wealth being created over the past 10 years Rockefeller’s $1Billion would be worth $14Billion today – Less than the net worth of EACH of the five children of Wal-Mart founder, Sam Walton For the first time, the United States surpasses Europe in the population of millionaires In 2005 the US produced 227,000 new millionaires(those with assets worth more than $1 Million)
5 categories of Richistanis
1) Founders 2) Stakeholders 3)The Acquired 4)Money Movers 5) Salaried Rich
How much is “Rich”
To make it into the top 1% of Americans, you need a net worth of at least $6 Million, twice the level required in 1995. To get on the Frobes 400, you have to be a millionaire, entry price in 1995 was $418 Million.
Today $1 Million barely gets a 2 bedroom in Manhattan, let alone a place in the Hamptons. And there are now 9 million millionaires. So true wealth begins at around $10 Million.
Today $1 Million barely gets a 2 bedroom in Manhattan, let alone a place in the Hamptons. And there are now 9 million millionaires. So true wealth begins at around $10 Million.
I wish I’d thought of that ch3
James Leprino
Formulated a special kind of Mozzarella that had ideal melting properties and became a billionaire by selling it to Pizza Hut & Domino’s
Ty Warner
The multibillionaire creator of Beanie Babies
Christopher Goldsbury
Created Pace Salsa and made more than $1 billion after selling it to Campell’s
Also include: Butchers Bakers and Candlestick Makers
Formulated a special kind of Mozzarella that had ideal melting properties and became a billionaire by selling it to Pizza Hut & Domino’s
Ty Warner
The multibillionaire creator of Beanie Babies
Christopher Goldsbury
Created Pace Salsa and made more than $1 billion after selling it to Campell’s
Also include: Butchers Bakers and Candlestick Makers
Ed Bazinet
Went to the University of Minnesota but dropped out during his sophomore year
Got a job at a giftware/flower shop designing flower arrangements
Was promoted to gifts giving him a chance to travel in order to purchase unique items
His eye for distinctive pieces caught peoples’ attention giving him a good reputation with clients and other retailers
Got a job at a giftware/flower shop designing flower arrangements
Was promoted to gifts giving him a chance to travel in order to purchase unique items
His eye for distinctive pieces caught peoples’ attention giving him a good reputation with clients and other retailers
His big Break
In 1971 Ed met an Elderly potter who made cookie jars that looked like little Victorian houses
Ed decided that if they cut out the windows and installed lights inside the houses it could sell as a night light
Originally produced 6 to sell on the Backman’s shelves priced from
$150-$200
Contrary to expectation they sold out instantaneously
Ed decided that if they cut out the windows and installed lights inside the houses it could sell as a night light
Originally produced 6 to sell on the Backman’s shelves priced from
$150-$200
Contrary to expectation they sold out instantaneously
Striking it rich
Aware that the potter would not be able to keep up Ed flew to Taiwan and found a ceramics factory willing to take on the job
He founded DEPARTMENT 56
Spent the next 3 years overseeing production and teaching the workers how to paint the figures just so
Ed’s real innovation came when he thought of turning the houses into a village scene creating more demand from the customers
Instead of buying one or two, buyers were now compelled to purchase the entire village set including pet stores, car dealerships, diner, even a snow covered trailer park
He founded DEPARTMENT 56
Spent the next 3 years overseeing production and teaching the workers how to paint the figures just so
Ed’s real innovation came when he thought of turning the houses into a village scene creating more demand from the customers
Instead of buying one or two, buyers were now compelled to purchase the entire village set including pet stores, car dealerships, diner, even a snow covered trailer park
Growing tired of Success
Sales went from $250,000 – $100 million by the 80’s
Every Friday Ed took home stacks of letters from fans expressing their profound joy over their new acquisitions.
He could not relate
In the 90’s he became jaded, started to make fun of his customers by buying a “Get A Life” stamp to put on the most fanatical letters, even though he was making more than $750,000 a year off those same people.
“I know it’s hard to understand but I’m not money motivated. For me it was all about my product and having success with that product. It was about selling to the right stores. I’m a merchant at heart.”
Every Friday Ed took home stacks of letters from fans expressing their profound joy over their new acquisitions.
He could not relate
In the 90’s he became jaded, started to make fun of his customers by buying a “Get A Life” stamp to put on the most fanatical letters, even though he was making more than $750,000 a year off those same people.
“I know it’s hard to understand but I’m not money motivated. For me it was all about my product and having success with that product. It was about selling to the right stores. I’m a merchant at heart.”
Getting His own Life
Spent 3years and millions of dollars renovating his 5 story downtown Manhattan abode.
Oversaw the construction of every molding, window and fixture
After the penthouse was finished he was unhappy with it
He sued the construction company for “problems” in the home
“simply put, its too big, there are no cozy areas”
Wants to downsize by selling his beach house, antique biwing plane, as well as the newly finished penthouse.
He feels that the money would be better spent on charity
He is unwilling though to sell his ranch in Montana or his gulfstream jet.
“It’s still hard to believe, me…owning a jet”
Oversaw the construction of every molding, window and fixture
After the penthouse was finished he was unhappy with it
He sued the construction company for “problems” in the home
“simply put, its too big, there are no cozy areas”
Wants to downsize by selling his beach house, antique biwing plane, as well as the newly finished penthouse.
He feels that the money would be better spent on charity
He is unwilling though to sell his ranch in Montana or his gulfstream jet.
“It’s still hard to believe, me…owning a jet”
Tim Blixseth – The Billionaire
“On Tuesday morning, Tim and Edra boarded their Gulfstream 550 and flew to Manzaneo, Mexico, just south of Puerto Vallarta. There, they jumped on their yacht and motored to Tamarindo – a secluded jungle resort that Tim recently purchased. Two days later, it was off to Tahiti to another Blixseth resort playground.”
Life can resemble one long, luxurious vacation.
Feels like vagabond and home is a relative term to him, but Tim still considers himself to live the good life.
Life can resemble one long, luxurious vacation.
Feels like vagabond and home is a relative term to him, but Tim still considers himself to live the good life.
Tim Blixseth’s Career Track
Timber business – retired at age 40
Second career – building high-end resorts
Buys and sells land
Owns and develops property
Day-trades stocks
Funds start-up companies
Charitable foundation
Owns music label and writes pop songs
“I have trouble sitting stiff” – understatement?
Second career – building high-end resorts
Buys and sells land
Owns and develops property
Day-trades stocks
Funds start-up companies
Charitable foundation
Owns music label and writes pop songs
“I have trouble sitting stiff” – understatement?
The New Leisure Class
Tim Blixseth is a leading member of the new overachieving overclass.
Multiple vacation homes, planes, boats, and cars.
“For one of their wedding anniversaries, Tim set up dinner for two by their pool. On the table, he placed a crystal bowl filled with 50 raw carrots. When Edra asked why they were there, Tim said “Count them”, and underneath she found a 50 carat diamond necklace.”
Little time for the overachieving overclass to enjoy the life of leisure.
Workaholic wealthy vs Old money
Competition, innovation, risk, reinvention, brutal hours.
Richistanis – work has become their play, and play has become their work.
Tim is everyman’s billionaire and a classic example of new leisure.
Lived off welfare as a child; free lunches in school cafeteria.
“I don’t give a damn if you learn a single thing in this class. But just remember that you can do anything you want in this country if you want to. You can succeed or fail, but it’s up to you. You’re entirely responsible.”
Multiple vacation homes, planes, boats, and cars.
“For one of their wedding anniversaries, Tim set up dinner for two by their pool. On the table, he placed a crystal bowl filled with 50 raw carrots. When Edra asked why they were there, Tim said “Count them”, and underneath she found a 50 carat diamond necklace.”
Little time for the overachieving overclass to enjoy the life of leisure.
Workaholic wealthy vs Old money
Competition, innovation, risk, reinvention, brutal hours.
Richistanis – work has become their play, and play has become their work.
Tim is everyman’s billionaire and a classic example of new leisure.
Lived off welfare as a child; free lunches in school cafeteria.
“I don’t give a damn if you learn a single thing in this class. But just remember that you can do anything you want in this country if you want to. You can succeed or fail, but it’s up to you. You’re entirely responsible.”
Beginning a Blixseth Business & The Timber Trade
The Business
Marketing 101- Donkey Dollars
Becoming a Land Owner
$1000 down for 360-acre
The Timber Trade
Company buys Tim’s 360-acrefor $140,000→ $50, 000(Tim’s Profit)
Tim begins Career as a Timberland Trader
Starts off buying overlooked property
Blixseth goes Bankrupt
Marketing 101- Donkey Dollars
Becoming a Land Owner
$1000 down for 360-acre
The Timber Trade
Company buys Tim’s 360-acrefor $140,000→ $50, 000(Tim’s Profit)
Tim begins Career as a Timberland Trader
Starts off buying overlooked property
Blixseth goes Bankrupt
The Yellowstone Club
Private Family Ranch Getaway turns into Luxury Resort
$250,000 just become a member
Had to spend over a million dollars to build and buy on site
Tim knew what the wealthy desired
$250,000 just become a member
Had to spend over a million dollars to build and buy on site
Tim knew what the wealthy desired
Going Global in 2005
Tim’s Destination Club Development
Highly Exclusive Vacation Locations
Tim throws in Planes & Yachts
Hires hard working staff team (*Wine experts, Chefs, Butlers, Concierges etc…)
Highly Exclusive Vacation Locations
Tim throws in Planes & Yachts
Hires hard working staff team (*Wine experts, Chefs, Butlers, Concierges etc…)
The Conflicted Elite
Tim hates being labeled “rich”.
Richistans think of themselves as ordinary people, albeit with extraordinary fortunes.
Try to appear normal.
Richistans wear polo shirts, casual slacks, and open-collar dress shirts, forsaking the old uniform of monogrammed shirts and suits.
A Palm Beacher said “Suits are for the people who work for me.”
Blixseth does not like “rich” people.
Wealth can bring out the worst or the best in people.
“Money is like a truth serum. It brings out people’s true nature. So if someone’s already a jerk, they become more of a jerk after they’re rich.”
Does not think of himself as a billionaire.
Billion is a number that seems so far on the horizon. Does not seem real.
Modern day Richistans strive to maintain their middle-class identities.
Dual personalities
Middle-class values
Upper-class lifestyles
Richistans think of themselves as ordinary people, albeit with extraordinary fortunes.
Try to appear normal.
Richistans wear polo shirts, casual slacks, and open-collar dress shirts, forsaking the old uniform of monogrammed shirts and suits.
A Palm Beacher said “Suits are for the people who work for me.”
Blixseth does not like “rich” people.
Wealth can bring out the worst or the best in people.
“Money is like a truth serum. It brings out people’s true nature. So if someone’s already a jerk, they become more of a jerk after they’re rich.”
Does not think of himself as a billionaire.
Billion is a number that seems so far on the horizon. Does not seem real.
Modern day Richistans strive to maintain their middle-class identities.
Dual personalities
Middle-class values
Upper-class lifestyles
Dual Personalities
Every morning goes to have Starbucks to be around regular people.
“It keeps me sane” says Blixseth
Questioned on how many cars he owns.
Reply “I really don’t know.”
Impulse buy on a convertible Bentley ($250,000)
Two Rolls-Royce Phantoms
One blue
The other two-tone black and silver
Why two? Two-tone is a restaurant car. Gets a better parking space.
Got rid of the family’s Range Rovers for Nissan Armadas.
“Great deal”, Half price of Range Rover and just as good.
Favorite car: 1,600-pound Smart Car
$20,000 and gets 60 miles to the gallon.
Give away millions each year in philanthropy.
Tim helps those in need. Element of surprise.
Big tipper.
$20 tips to valets, etc. Once handed $100 tip to a driver.
“It’s true what they say – the first billion is the hardest. The second one was pretty easy.”
“It keeps me sane” says Blixseth
Questioned on how many cars he owns.
Reply “I really don’t know.”
Impulse buy on a convertible Bentley ($250,000)
Two Rolls-Royce Phantoms
One blue
The other two-tone black and silver
Why two? Two-tone is a restaurant car. Gets a better parking space.
Got rid of the family’s Range Rovers for Nissan Armadas.
“Great deal”, Half price of Range Rover and just as good.
Favorite car: 1,600-pound Smart Car
$20,000 and gets 60 miles to the gallon.
Give away millions each year in philanthropy.
Tim helps those in need. Element of surprise.
Big tipper.
$20 tips to valets, etc. Once handed $100 tip to a driver.
“It’s true what they say – the first billion is the hardest. The second one was pretty easy.”
The Gang of Four
Republicans had control of Colorado’s legislature for more than 40 years until the Gang of Four came along.
The Gang of Four was made up of Jared Polis, Tim Gill, Pat Stryker, and Rutt Bridges; they wanted greater opportunities for all Coloradans. They poured money into supporting the democratic ticket and were responsible for the democrats ruling both houses of congress for the 1st time since 1961.
They createda new kind of rich-man politics, which means rather than using the government to make themselves richer, they are using it as a tool for their own agendas.
The Gang of Four was made up of Jared Polis, Tim Gill, Pat Stryker, and Rutt Bridges; they wanted greater opportunities for all Coloradans. They poured money into supporting the democratic ticket and were responsible for the democrats ruling both houses of congress for the 1st time since 1961.
They createda new kind of rich-man politics, which means rather than using the government to make themselves richer, they are using it as a tool for their own agendas.
Learjet Liberals
Richistanis have already conquered the business world and now they want power. This is why many of them are getting involved in politics.
Many Richistanis are now running for office.
1980’s-90’s 3 people a year spend more than $1 million of their own money on campaigns. In 2004 that number grew to 24 a year.
Loans and contributions from candidates rose from $36.6 million in 1990 to 124.7 million in 2004
Many Richistanis are now running for office.
1980’s-90’s 3 people a year spend more than $1 million of their own money on campaigns. In 2004 that number grew to 24 a year.
Loans and contributions from candidates rose from $36.6 million in 1990 to 124.7 million in 2004
Democrats or Republicans
Of the candidates that spend more than $4 million on their campaigns, Democrats outnumber Republicans 4-1.
Candidates who spend between $1-$4 million republicans outnumber democrats 2-1.
This means that Republicans make up lower Richistan while Democrats rule the top.
“At a certain level of wealth, you care more about things like the environment and what’s going to happen to later generations than preserving your own money”.
Candidates who spend between $1-$4 million republicans outnumber democrats 2-1.
This means that Republicans make up lower Richistan while Democrats rule the top.
“At a certain level of wealth, you care more about things like the environment and what’s going to happen to later generations than preserving your own money”.
Jared Polis, 32
Sold several companies and his estimated net worth is 200 million
Republicans branded him and 3 other democrats the “Gang of Four” because they never teamed up to transform an important election.
Age 11- he gave a speech to the local city council meeting and convinced the town council to stop a new development
Age 16-Finished High School early and went to Princeton
Polis is now the Congressman of the 2nd District of Colorado
Republicans branded him and 3 other democrats the “Gang of Four” because they never teamed up to transform an important election.
Age 11- he gave a speech to the local city council meeting and convinced the town council to stop a new development
Age 16-Finished High School early and went to Princeton
Polis is now the Congressman of the 2nd District of Colorado
Band of brothers
Who they Were
Al Yates, Ken Salazar, Pat Stryker, Tim Gill
What Made them significant
Yates was the retired president of Colorado State University and one of the state’s most powerful and distinguished African Americans. Salazar was the Colorado State attorney general. Stryker was a low-profile mom who was worth an estimated $1.4 billion from her stake in her family’s medical-supply company, Stryker Corp, and Gill was a multi-million dollar computer programmer.
Al Yates, Ken Salazar, Pat Stryker, Tim Gill
What Made them significant
Yates was the retired president of Colorado State University and one of the state’s most powerful and distinguished African Americans. Salazar was the Colorado State attorney general. Stryker was a low-profile mom who was worth an estimated $1.4 billion from her stake in her family’s medical-supply company, Stryker Corp, and Gill was a multi-million dollar computer programmer.
Wealth as a requirement
Their political views
This Band of Brothers group was formed because of frustration with political leadership, and disagreement with certain policies. This group had come to mutual agreement that change needed to ensue politically.
Influence based on contribution
Tim Gates, a multi million dollar computer programmer devoted millions of dollars towards antidiscrimination measures for gays both to republicans and democrats. Their influence was not based on political expertise, but rather the sums of finances that they contributed.
This Band of Brothers group was formed because of frustration with political leadership, and disagreement with certain policies. This group had come to mutual agreement that change needed to ensue politically.
Influence based on contribution
Tim Gates, a multi million dollar computer programmer devoted millions of dollars towards antidiscrimination measures for gays both to republicans and democrats. Their influence was not based on political expertise, but rather the sums of finances that they contributed.
Impact on political parties
Contributions made
The group (Band of Brothers) plowed more than $3 million into an election effort. For state races, the group spent more than $2 million. Gill, Polis, and Stryker spent $1 million on ads for a specific race that targeted a party that they were in oppose to etc
The clout that obtaining Wealth can hold
This group was made up of individuals that had reached a certain level of wealth, not a certain level of political competency, which indicates that wealth carries more clout than actual knowledge in this day and age.
The group (Band of Brothers) plowed more than $3 million into an election effort. For state races, the group spent more than $2 million. Gill, Polis, and Stryker spent $1 million on ads for a specific race that targeted a party that they were in oppose to etc
The clout that obtaining Wealth can hold
This group was made up of individuals that had reached a certain level of wealth, not a certain level of political competency, which indicates that wealth carries more clout than actual knowledge in this day and age.
Worried Wealth
2005 Study: Less than ½ of Richistani’s agree with statement “Wealth has made me happier”
10% felt wealth created more problems than it solved
Rich People Problems:
Family squabbles
Endless choice in how to spend and invest
Constant fear of losing it all in financial markets
Frustrated with competition
Consistent feeling of needing at least 2x their current fortune to feel secure
10% felt wealth created more problems than it solved
Rich People Problems:
Family squabbles
Endless choice in how to spend and invest
Constant fear of losing it all in financial markets
Frustrated with competition
Consistent feeling of needing at least 2x their current fortune to feel secure
Support
Tiger 21: Nation’s biggest “wealth peer group”
Started by Michael Sonnenfeldt
Members of similar net worth discuss:
Hedge funds
Stocks
Family
Personal effects of wealth
Members open up to group and can relate and sympathize with each other
Started by Michael Sonnenfeldt
Members of similar net worth discuss:
Hedge funds
Stocks
Family
Personal effects of wealth
Members open up to group and can relate and sympathize with each other
Support pt.2
Highlighted Problems:
Selling stock too early
Risking friendships over business deals
Noise from construction in Manhattan office
Lifestyle too expensive
Dropping percentages on investment returns
Wife’s spending habits
Competition among wealthy
Inflation rate for wealthy
Rich people helping rich people!
Selling stock too early
Risking friendships over business deals
Noise from construction in Manhattan office
Lifestyle too expensive
Dropping percentages on investment returns
Wife’s spending habits
Competition among wealthy
Inflation rate for wealthy
Rich people helping rich people!
The Inner Millionaire
For many, their identity lies within their business
Once they sell stock and retire, what are they supposed to do?
Members brainstorm and give ideas on how to live life outside of the business
Reconnect with family
Volunteer with organizations they are passionate about
Travel
One member stated that she shares more with her group than she does with her husband and kids
Once they sell stock and retire, what are they supposed to do?
Members brainstorm and give ideas on how to live life outside of the business
Reconnect with family
Volunteer with organizations they are passionate about
Travel
One member stated that she shares more with her group than she does with her husband and kids
The Inner Millionaire pt.2
Peer groups also offer members exclusive inside info
Real estate opportunities
Premium financial information
Global business opportunities
Members build close relationships and become a group of families; they can seek advise from those who have had similar issues and get objective advice
Popularity of these groups is growing
Real estate opportunities
Premium financial information
Global business opportunities
Members build close relationships and become a group of families; they can seek advise from those who have had similar issues and get objective advice
Popularity of these groups is growing
What the Rich Talk About When They Talk About Money
Each meeting of Tiger 21 involves a portfolio defense
One member reveals personal balance sheet to group
Investments
Income
Charities
Household Spending
“Carefrontation”: Each member analyzes the portfolio and pose probing questions to help the subject find ways to control or diversify their wealth
One member reveals personal balance sheet to group
Investments
Income
Charities
Household Spending
“Carefrontation”: Each member analyzes the portfolio and pose probing questions to help the subject find ways to control or diversify their wealth
What the Rich Talk About When They Talk About Money ptt.2
Today’s Subject: George
Portfolio valued at $50 million
Earnings:
Investments: $300,000/yr
Income: $800,000/yr from corporate boards
Spending:
$750,000-$1.3 Million
½ on taxes and charity
½ on mortgages, cars, vacations, restaurants, etc
Portfolio valued at $50 million
Earnings:
Investments: $300,000/yr
Income: $800,000/yr from corporate boards
Spending:
$750,000-$1.3 Million
½ on taxes and charity
½ on mortgages, cars, vacations, restaurants, etc
What the Rich Talk About When They Talk About Money pt.3
Members critique:
George owns a lot of stock in companies that he also serves as director; This doubles his risk if the company fails or nets a huge loss
Portfolio is 60% bonds and 40% stocks; Too conservative for a man in his position; Take more risk to yield higher returns
George concedes, noting that his lifestyle is expanding and doesn’t want inflation to catch him 20 years down the road
George owns a lot of stock in companies that he also serves as director; This doubles his risk if the company fails or nets a huge loss
Portfolio is 60% bonds and 40% stocks; Too conservative for a man in his position; Take more risk to yield higher returns
George concedes, noting that his lifestyle is expanding and doesn’t want inflation to catch him 20 years down the road
We’ll Always Have Paris
The wealthy kids are attending classes to learn about manners and living the high-life
Financial Life Skills Retreat: a course run by IFF Advisors. In this course, the kids of multimillionaires and billionaires are taught:
– How to manage their inheriting fortune
– Portfolio theory learning, price to earnings and debt management
– How to convince their intended to sign pre-nups
– For example: Ryan’s fiancés asked him to sign up a marital agreement because her family wants to protect their assets
– How to control their spending, work with others or how to interview for a job
Financial Life Skills Retreat: a course run by IFF Advisors. In this course, the kids of multimillionaires and billionaires are taught:
– How to manage their inheriting fortune
– Portfolio theory learning, price to earnings and debt management
– How to convince their intended to sign pre-nups
– For example: Ryan’s fiancés asked him to sign up a marital agreement because her family wants to protect their assets
– How to control their spending, work with others or how to interview for a job
Aristokids
More than four million children of American millionaires.
$15 trillion will be passed down to children between 2002 and 2052
Most parents will leave 75% of their estate to their children
40% of millionaires give their children unregulated access to the kid’s own money
$15 trillion will be passed down to children between 2002 and 2052
Most parents will leave 75% of their estate to their children
40% of millionaires give their children unregulated access to the kid’s own money
Aristokids pt.2
Indulging Children
Resorts
Clothing Stores
Private Schools
New Problems
Little motivation
No basic skills
Substance Abuse
Depression
Resorts
Clothing Stores
Private Schools
New Problems
Little motivation
No basic skills
Substance Abuse
Depression
Aristokids pt.3
Insulated
Kids live in their own world
Some want to experience normal world
Others expect to get whatever they want
Old Money
“Weird combination of Christianity and manliness”
Work to experience adversity
Productive, but not too productive
Hobbies
Richistani
No boarding schools- day schools only
Want kids to make money, or not lose it
Teach kids how to run businesses
Kids live in their own world
Some want to experience normal world
Others expect to get whatever they want
Old Money
“Weird combination of Christianity and manliness”
Work to experience adversity
Productive, but not too productive
Hobbies
Richistani
No boarding schools- day schools only
Want kids to make money, or not lose it
Teach kids how to run businesses
The Sums of Our Fathers
Individual Students: Kyle
Wants to outdo his fathers worth of 500 Million
Saves about half of his earnings
Wants to be successful without his fathers help
Was taught as a boy, you have to earn every penny
Wants to outdo his fathers worth of 500 Million
Saves about half of his earnings
Wants to be successful without his fathers help
Was taught as a boy, you have to earn every penny
Trading Places
– The groups are asked to join stock-trading contest
– Each is given $100 in fictitious cash a laptop computer.
– They use that money to spend and choose the list of stocks based on their thoughts
– The stock market is simulated over a five-year period.
*Tim’s group is the winner (Tim is the famer’s son)
*He soon came up with a simple concept: focus on PE (price per earning) and high margin of safety to succeed in stock trading
– Each is given $100 in fictitious cash a laptop computer.
– They use that money to spend and choose the list of stocks based on their thoughts
– The stock market is simulated over a five-year period.
*Tim’s group is the winner (Tim is the famer’s son)
*He soon came up with a simple concept: focus on PE (price per earning) and high margin of safety to succeed in stock trading
Trading Places
Charles Martin, a top venture capitalist is the guest speaker in their dinner. He is sharing the story how he became rich from a poor family
All he has is self-made, no one helps him a long
Worked 2 jobs in college and got 3 degrees
Became a senior manager for an electronic company, working on missile systems
Start up his venture capital firm: investing in start-ups and leverage buyouts
His concepts about inheritance: He decided to have no inheritance for his nieces and nephews because he thinks those will be damaging the kids. The only thing he gives them is the scholarship.
All he has is self-made, no one helps him a long
Worked 2 jobs in college and got 3 degrees
Became a senior manager for an electronic company, working on missile systems
Start up his venture capital firm: investing in start-ups and leverage buyouts
His concepts about inheritance: He decided to have no inheritance for his nieces and nephews because he thinks those will be damaging the kids. The only thing he gives them is the scholarship.
46th Annual International Boat Show
10 days before the show, hurricane Wilma leaves thousands without the basic necessities such as shelter, food, water, and electricity.
Despite the destruction, multi-million dollar yachts were exhibited to the Richistanis with champagne and chocolate covered strawberries
An example of contrast: Pertrenia Craig and her six children were shuffling from homeless shelter to homeless shelter, while guests of the show discussed their Bentleys and dined on crab cakes
Despite the destruction, multi-million dollar yachts were exhibited to the Richistanis with champagne and chocolate covered strawberries
An example of contrast: Pertrenia Craig and her six children were shuffling from homeless shelter to homeless shelter, while guests of the show discussed their Bentleys and dined on crab cakes
46th Annual International Boat Show pt.2
The show’s promoter, Kaye Pearson, happily advertised that attendants of the event would never know a hurricane had recently torn through
Pearson denied that maintenance required for the event would divert resources from the public, such as police, phone technicians, and electric crews from residents suffering in the fall heat
Pearson denied that maintenance required for the event would divert resources from the public, such as police, phone technicians, and electric crews from residents suffering in the fall heat
Eating Richistan’s Dust
Median income for households fell for the fifth year in a row in 2005, decreasing the average income by $3000. At the same time, income of rich increased into the double digits (10,000+)
The richest 1% controlled more than 33% of the total wealth in the United States, more than the bottom 90% combined. Their national share was the highest since WWII.
The richest 1% controlled more than 33% of the total wealth in the United States, more than the bottom 90% combined. Their national share was the highest since WWII.
Wealth and Institution
Middle class voters began to feel that the cost of previously attainable expenses such as University tuition and doctor’s visits were becoming too great.
The rich, dissatisfied with the health care system, turned to “concierge” doctors who only served a limited number of families
Because of their large donations to political campaigns, the rich hold more power of persuasion over policy than the average citizen
The rich, dissatisfied with the health care system, turned to “concierge” doctors who only served a limited number of families
Because of their large donations to political campaigns, the rich hold more power of persuasion over policy than the average citizen
Consumption
With their immense consumption, the rich raised the standard of living, forcing the middle class to work harder and take on more debt to keep up.
As a result, the middle class also began to start spending their hard earned wages on luxury items to compensate for their lower status.
Even as the country was vastly underfunded for projects such as roads, bridges, health care, and the school system, the non-wealthy continued to spend on luxury.
As a result, the middle class also began to start spending their hard earned wages on luxury items to compensate for their lower status.
Even as the country was vastly underfunded for projects such as roads, bridges, health care, and the school system, the non-wealthy continued to spend on luxury.
Sustainability of Richistan
The resurgence of Democrats brought new efforts towards increasing the minimum wage, limiting global trade and trying to boost gov’t funding for education
Some argued for a redistribution of wealth through a “wealth tax” that could put balance back into the economy
While some believe Americans may be getting their pitchforks out to rally against the wealthy, many still hold a positive view of them and hold out hope that they too may one day be a citizen of Richistan
Most people feel concern over raising the standard of living for the middle class, not penalizing the rich
Some argued for a redistribution of wealth through a “wealth tax” that could put balance back into the economy
While some believe Americans may be getting their pitchforks out to rally against the wealthy, many still hold a positive view of them and hold out hope that they too may one day be a citizen of Richistan
Most people feel concern over raising the standard of living for the middle class, not penalizing the rich
Going Global
The river of wealth mainly flowed through the US in the 1990s but started to flow outward into a global market, taking it to locations where growth was stronger, such as China, India, Eastern Europe, and Latin America
The production of millionaires is expected to drift away from the US over the next 5-10, according to Frank
Global shift of capital will effect Richistan in 2 ways:
Become more globally diverse
Become more unequal
The world’s wealthy will form a 3rd culture
Will drive same cars, stay at same hotels, wear same clothes, etc.
Upper Richistanis will become future separated from Lower ones
Richer ones can afford to buy and invest abroad; Lower Richistanis can not.
The production of millionaires is expected to drift away from the US over the next 5-10, according to Frank
Global shift of capital will effect Richistan in 2 ways:
Become more globally diverse
Become more unequal
The world’s wealthy will form a 3rd culture
Will drive same cars, stay at same hotels, wear same clothes, etc.
Upper Richistanis will become future separated from Lower ones
Richer ones can afford to buy and invest abroad; Lower Richistanis can not.
A Shred of Hope
Inequality will only grow and will further separate richest from everyone else…
Yet hope exists, in that the wealthy few will have enough power and money to fix society’s biggest problems.
With their great fortunes, they can not only help their countries and communities, but also focus abroad.
Would have enough money to help people in other countries.
Ex. feed the hungry in Africa.
The wealthy will see their money not as a gift but as a responsibility
Yet hope exists, in that the wealthy few will have enough power and money to fix society’s biggest problems.
With their great fortunes, they can not only help their countries and communities, but also focus abroad.
Would have enough money to help people in other countries.
Ex. feed the hungry in Africa.
The wealthy will see their money not as a gift but as a responsibility
