R|CE|51AN

Contents

Cover Page
1Itle Page
ÐedIcatIon
lntroductIon / 1EE B|R1E OF A NA1|ON

1 / Bu1LER BOO1 CANP
HousetraInIng the New RIch

2 / 1EE 1E|RD WAVE
1he Era o| the lnstapreneur

8 / NAK|NC |1
Ed BazInet, KIng o| the CeramIc vIllage

4 / L|V|NC |1
1Im BlIxseth

5 / LO5|NC |1
Pete Musser

0 / BARBAR|AN5 |N 1EE BALLROON
New Money vs. Old

7 / 5|ZE REALLY DOE5 NA11ER
"My Boat ls BIgger 1han ¥our Boat¨

8 / PERFORNANCE PE|LAN1EROPY
GIvIng |or Results

0 / NOVE OVER, CER|51|AN COAL|1|ON
1he New PolItIcal KIngmakers

10 / WORR|ED WEAL1E
1he 1rouble wIth Money

11 / AR|51OK|D5
We´ll Always Have ParIs

12 / 1EE WEAL1E CAP AND 1EE Fu1uRE OF R|CE|51AN

Notes
Acknowledgments
About the Author
CopyrIght


1o lobocca


R|CE|51AN


lntroductIon


1EE B|R1E OF
A NA1|ON
1h|s book bogan w|th tho d|scovory ot a s|ng|o, romarkab|o stat|st|c.
ln 2008, wh||o wr|t|ng a rout|no art|c|o about Wa|| 3troot bonusos, l stumb|od onto a chart trom
tho |odora| losorvo 3oard. lt showod that tho numbor ot m||||ona|ro housoho|ds had moro than
doub|od s|nco 100b to moro than o|ght m||||on.
Grantod, a m||||on do||ars doosn't moan what |t usod to. 3ut no mattor how tar up l |ookod on
tho woa|th |addor-to housoho|ds worth $10 m||||on, $20 m||||on, $b0 m||||on-a|| tho popu|at|ons
woro doub||ng.
Evon moro surpr|s|ng was tho tact that tho Un|tod 3tatos was m|nt|ng m||||ona|ros |ong attor tho
toch bust, rocoss|on and torror|st attacks ot 2001. 1ho woa|th boom, as tho numbors showod,
wont tar boyond tho 20-somoth|ng dotcommors |n 3|||con va||oy and Wa|| 3trootors |n low York.
lt strotchod across tho country, to a|| ago groups and to a|most ovory |ndustry. lovor botoro had
so many Amor|cans bocomo so r|ch, so qu|ck|y. 1ho Un|tod 3tatos |s now tho wor|d |oador |n
produc|ng m||||ona|ros-ovon |t |t |ags boh|nd Ch|na and lnd|a |n othor typos ot manutactur|ng.
|or tho t|rst t|mo |n h|story, wo now havo moro m||||ona|ros than Europo.


Attor soo|ng tho |od numbors, l startod to wondor about a|| thoso r|ch poop|o. Who woro thoy?
|ow d|d thoy got r|ch? |ow was monoy chang|ng tho|r ||vos? Vost |mportant|y, how woro thoy
chang|ng ||to tor tho rost ot us? Why, |n an ago ot °m||||ona|ro' roa||ty 1v shows and woa|th
voyour|sm, d|d wo soom to know so ||tt|o about what th|s group was roo||y ||ko?
1o answor thoso quost|ons, my od|tors agrood to a bo|d oxpor|mont. ln 2008, l bocamo tho t|rst
roportor at 7bo ¼o|| 5troot 1ooroo| to tocus tu||-t|mo on tho ||to and t|mos ot tho low l|ch. l
|mmorsod myso|t |n tho|r wor|d, hang|ng around yacht mar|nas, s||pp|ng |nto char|ty ba||s, |o|tor|ng
|n |orrar| doa|orsh|ps and scop|ng out tho 3othoby's and Chr|st|o's auct|ons. l stud|od up on trust
|aw, h|gh-ond |nvost|ng and tho |atost tronds |n char|tab|o g|v|ng. l gr|||od tho top |uxury roa|tors, jot
brokors, party p|annors and rosort managors. Vost|y, l bothorod r|ch poop|o. l askod thom
ond|oss quost|ons and tr|od to got thom to ta|k opon|y about tho|r monoy and tho|r ||vos.
3urpr|s|ng|y, many d|d. 1ho rosu|t|ng art|c|os l wroto about th|s now cu|turo ot woa|th provod
surpr|s|ng|y popu|ar w|th roadors.
1h|s book bogan w|th that roport|ng. 3ut |ts contra| prom|so-ot a para||o| country ot tho r|ch-
took shapo |ator, w|th a chanco convorsat|on at a yacht c|ub. ln 2004, l was wa|k|ng a|ong tho
docks ot |t. laudorda|o's 3ah|a Var Var|na dur|ng an annua| yacht convont|on whon l mot up
w|th a boat ownor trom 1oxas. As wo starod out ovor tho hundrods ot mogayachts ||nod up a|ong
tho docks-most 1b0 toot or moro, t|y|ng Car|bboan t|ags omb|azonod w|th tru|t-ho turnod to
mo and sa|d, °You |ook at a|| thoso boats and you'd th|nk ovoryono's mak|ng |oads ot monoy. lt's
||ko |t's a d|ttoront country.'
1ho words stuck w|th mo. 1oday's r|ch had tormod tho|r own v|rtua| country. 1hoy woro, |n tact,
woa|th|or than most nat|ons. 3y 2004, tho r|chost 1 porcont ot Amor|cans woro oarn|ng about
$1.8b tr||||on a yoar-groator than tho tota| nat|ona| |ncomos ot |ranco, lta|y or Canada.
And w|th tho|r hugo numbors, thoy had bu||t a so|tconta|nod wor|d unto thomso|vos, comp|oto
w|th tho|r own hoa|th-caro systom (conc|orgo doctors), travo| notwork (lot 1ots, dost|nat|on
c|ubs), soparato oconomy (doub|o-d|g|t |ncomo ga|ns and doub|o-d|g|t |nt|at|on), and |anguago
(°Who's your housoho|d managor?'). 1hoy d|dn't just h|ro gardon|ng crows, thoy h|rod °porsona|
arbor|sts.' 1ho r|ch woron't just gott|ng r|chor, thoy woro bocom|ng t|nanc|a| toro|gnors, croat|ng
tho|r own country w|th|n a country, tho|r own soc|oty w|th|n a soc|oty, and tho|r oconomy w|th|n an
oconomy.
1hoy woro croat|ng l|ch|stan.
As a tormor toro|gn corrospondont, l sot out to oxp|oro th|s now country. l spont 12 months
travo||ng around and |ntorv|ow|ng tho most |ntorost|ng l|ch|stan|s l cou|d t|nd-a|| worth $10
m||||on or moro. 1hoy aro poop|o you'vo novor hoard ot, s|nco so many ot today's woa|thy protor
to koop to thomso|vos. And thoy havo ||tt|o |n common w|th 0ona|d 1rump, 3||| Gatos, Warron
3uttot and tho othor wo||-known |orbos 400 suporstars wo road so much about.
A|ong tho way, l d|scovorod a now cu|turo ot woa|th that's vast|y d|ttoront trom O|d Vonoy. l
tound l|ch|stan|s who havo mado vast tortunos trom th|ngs wo baro|y know ox|stod-||ko
m|n|aturo coram|c v|||agos. And l |oarnod that tho vory woy that poop|o got r|ch |s chang|ng, dr|von
by vast poo|s ot monoy s|osh|ng around tho wor|d.
l mot a song-wr|t|ng, jot-sott|ng t|mbor baron namod 1|m 3||xsoth who typ|t|os tho now brood ot
°workaho||c woa|thy' who can't stop bu||d|ng omp|ros ovon attor bocom|ng b||||ona|ros. And l mot
a r|sk-|ov|ng ontropronour namod loto Vussor who |ost h|s ont|ro b||||on-do||ar tortuno |n tho
stock markot and |s now p|ott|ng h|s comoback.
l attondod a b|ack-t|o ba|| |n la|m 3oach, whoro a brash poo|-toy magnato tr|od to c||mb to tho
top ot b|uo-b|ood 3oc|oty, on|y to como crash|ng down (||tora||y) on 0ona|d 1rump's ba||room
t|oor. l sat |n on a moot|ng ot a woa|th poor group, a now k|nd ot group thorapy tor m||||ona|ros
who nood ho|p w|th tho|r monoy troub|os. And l spont a day at l|ch K|ds Camp, whoro tho now
s||vor spoon sot |oarn how to manago a|| tho monoy thoy'ro about to |nhor|t.
l jumpod aboard somo ot today's b|ggost yachts, to soo how l|ch|stan|s aro ro|nvont|ng tho
not|on ot consp|cuous consumpt|on. l a|so |ookod at how that spond|ng |s °tr|ck||ng down' to tho
rost ot Amor|ca, tor bottor and worso. l mot a 1ow|sh lr|shman |n 1oxas who's g|v|ng away ha|t h|s
tortuno to ho|p t|ght povorty |n Eth|op|a and ombod|os a now brand ot ph||anthropy. And l
oxp|orod l|ch|stan's po||t|cs through a group ca||od tho Gang ot |our-tour woa|thy Co|oradans
who ho|pod tund a 0omocrat|c takoovor ot tho stato |og|s|aturo and havo ho|pod to ushor |n a
now k|nd ot progross|vo, r|ch man's po||t|cs.
Ot courso, Amor|cans aro cont||ctod about a|| th|s woa|th. On tho ono hand, l|ch|stan|s
roprosont a|| that's groat about tho Amor|can oconomy and tho ab|||ty ot just about anyono
anywhoro to bocomo woa|thy. Yot l|ch|stan a|so symbo||zos tho hugo gap that's oponod up
botwoon tho r|ch and ovoryono o|so. Evon as tho r|ch havo grown moro numorous, thoy havo a|so
bocomo moro t|nanc|a||y and cu|tura||y romovod trom tho rost ot Amor|ca. l|ch|stan's succoss
h|gh||ghts V|dd|o Amor|ca's |oss.
1ho purposo ot my journoy |sn't to tako s|dos |n th|s dobato. l havon't sot out to condomn tho
r|ch, or to turn thom |nto horoos. 1ho bost toro|gn corrospondonts sook to br|ng roadors |ns|do a
country, to oxp|oro |ts poop|o and p|acos and oxp|a|n thom to tho rost ot tho wor|d. l havo tho
samo goa| w|th Rlcblstoo.
1ho oconom|st 1ohn Konnoth Ga|bra|th onco wroto that °Ot a|| tho c|assos, tho woa|thy aro tho
most not|cod and tho |oast stud|od.' 1hat has novor boon moro truo than today. 1o undorstand
|noqua||ty, wo nood to t|rst undorstand l|ch|stan and tho poop|o who ||vo thoro.
3o |ot's bog|n our journoy w|th a qu|ck tour.

1hroo Parta ot a Now Country

3otoro tho |ato 1080s, tho r|ch ||vod |n a sma||, qu|ot onc|avo ot ||ko-m|ndod poop|o. 1hoy wont to
many ot tho samo schoo|s, bo|ongod to tho samo c|ubs, had s|m||ar va|uos and otton marr|od |nto
oach othor's tam|||os. lt was moro ||ko a v|||ago than a country. 3rood|ng and pod|groo mattorod
as much as bank accounts, and most l|ch|stan|s woro born |nto tho|r monoy, wh|ch usua||y
t|owod trom o||, chom|ca|s, stoo|, roa| ostato and commod|t|os.
low tortunos woro raro, s|nco tho oconomy sproad |ts ga|ns tar boyond l|ch|stan, and tho
prova|||ng cu|turo and po||t|cs ot tho t|mo d|scouragod outs|zod woa|th. Whon tho t|rst |orbos 400
||st h|t nowstands |n 1082, tho r|chost man was a thr|tty sh|pp|ng magnato namod 0an|o| ludw|g,
who was worth $2 b||||on. Attor that, tho rostor was t|||od w|th turn-ot-tho-contury, b|uo-b|ood
namos ||ko lockoto||or, |unt, Gotty, lh|pps and 0u lont.
ln tho |ato 1080s, tho r|ch bogan to chango. 3oar|ng t|nanc|a| markots ushorod |n a now group
ot Wa|| 3trootors, corporato ra|dors and toch p|onoors. 1ho numbor ot b||||ona|ros jumpod trom
18 |n 1082 to 07 |n 1080. 3y 2000, w|th tho bu|| markot |n tu|| sw|ng, tho tr|ck|o turnod |nto a t|da|
wavo, and tho popu|at|on ot m||||ona|ros moro than tr|p|od to o|ght m||||on poop|o-groator than
tho popu|at|on ot 3wodon or Austr|a.
1ho r|ch bocamo l|ch|stan|s-mombors ot a d|st|nct now gonorat|on ot woa|th.
l|ch|stan|s d|dn't |nhor|t tho|r woa|th, but roso up through tho ranks ot tho m|dd|o c|ass or uppor
m|dd|o c|ass to mako |t on tho|r own. lar|s |||ton as|do, on|y 8 porcont ot today's
mu|t|m||||ona|ros aro co|obr|t|os and |oss than 10 porcont |nhor|tod tho|r monoy.
1hoy'ro a|so much youngor than prov|ous gonorat|ons ot r|ch poop|o. °3otoro tho 1000s, most
ot tho woa|thy l know woro rot|rod, thoy woro |n tho|r s|xt|os or sovont|os,' says lotor 3caturro,
tormor CEO ot U.3. 1rust, tho woa|th managomont t|rm. °low thoy'ro |n tho|r th|rt|os and tort|os.
1hoy havo a |ot ot runway |ott |n tront ot thom.'
l|ch|stan |s a|so a country ot doop d|v|s|ons. 1ho ro|at|vo|y homogonous cu|turo ot O|d Vonoy
-w|th |ts board|ng schoo|s, soc|a| c|ubs, cu|tura| |nst|tut|ons and sporty n|cknamos-has bocomo
atom|zod. l|ch|stan|s aro tar moro d|vorso |n torms ot ago, raco, gondor and goography. And
thoy aro moro po|ar|zod po||t|ca||y, w|th a r|s|ng now gonorat|on ot young, woa|thy ||bora|s
squar|ng ott aga|nst o|dor-||no lopub||cans.
1ho most surpr|s|ng d|v|do |n l|ch|stan, howovor, |s botwoon woa|th |ovo|s. 1ust as tho woa|th
d|spar|t|os havo grown botwoon l|ch|stan and tho rost ot tho Un|tod 3tatos, thoy'vo a|so grown
w|th|n l|ch|stan, croat|ng a now k|nd ot uppor-c|ass wartaro botwoon tho havos and havo-moros.
l|ch|stan, |n tact, has at |oast throo c|assos.

Lower RIchIstan

lowor l|ch|stan |s tho spraw||ng suburb|a ot l|ch|stan, w|th a popu|at|on that's oxp|odod to
moro than sovon m||||on housoho|ds. lowor l|ch|stan|s ||vo |n VcVans|ons, dr|vo around |n
3Uvs and ro|ax |n |awn turn|turo purchasod trom tho |rontgato cata|oguo. Vost ot thom aro
wo||oducatod, work-a-day protoss|ona|s: corporato oxocut|vos, doctors, |awyors, bankors,
dos|gnors, ana|ysts and monoy managors. Voro than ha|t tho|r woa|th |s dor|vod trom |ncomo,
w|th anothor th|rd com|ng trom |nvostmont roturns. ln an |ncroas|ng|y g|oba|, h|ghtoch, t|nanco-
or|ontod oconomy, lowor l|ch|stan|s havo bonot|tod trom tho grow|ng domand tor h|gh|y
oducatod workors and r|s|ng pay at tho top.


lowor l|ch|stan|s aro consorvat|vo |n tho|r po||t|cs. A major|ty ot thom votod tor Goorgo W.
3ush |n tho 2004 o|oct|on, say|ng ho was tho bost cand|dato to ho|p |mprovo tho|r porsona|
t|nanc|a| s|tuat|on. 1hoy'ro a|so strong advocatos ot abo||sh|ng tho ostato tax, s|nco most wou|d
bo targots.
Yot boh|nd tho|r nowtound succoss ||os a nagg|ng sonso ot |nsocur|ty. lowor l|ch|stan|s may
havo moro monoy than 0b porcont ot Amor|cans, but thoy'ro bocom|ng pooror ro|at|vo to tho|r
to||ow l|ch|stan|s. 1ho oconom|c d|stanco botwoon tho poorost l|ch|stan| and tho r|chost has
moro than doub|od ovor tho past docado. 1ho avorago |ncomo tor tho top 1 porcont ot |ncomo
oarnors grow b7 porcont botwoon 1000 and 2004, yot |t grow an ovon bottor 8b porcont tor tho
r|chost ono-tonth ot 1 porcont.
Whon thoy go to cockta|| part|os or tho|r k|ds' soccor gamos, lowor l|ch|stan|s run |nto
crowds ot poop|o w|th vast|y moro woa|th. 3o to koop up w|th tho|r r|chor brothron, lowor
l|ch|stan|s aro spond|ng moro and borrow|ng hoav||y. ln 2004, l|ch|stan's |nt|at|on rato toppod 0
porcont-tw|co tho broador |nt|at|on rato |n tho Un|tod 3tatos-dr|von by a|| thoso r|ch poop|o
vy|ng tor tho samo pr|vato schoo|s, nann|os, 3VWs, 1|mmy Choo shoos and boach homos.
lowor l|ch|stan|s havo takon on b||||ons ot do||ars |n dobt ovor tho past docado. About 20
porcont ot lowor l|ch|stan|s spont a|| ot tho|r |ncomo or moro |n 2004.
Vany l|ch|stan|s say that lowor l|ch|stan|s don't ovon bo|ong |n tho|r country. 1hoy rotor to tho
lowors as °att|uont'-tho u|t|mato l|ch|stan| |nsu|t. ln tho words ot Androw Carnog|o, that groat
l|ch|stan| patr|arch, lowor l|ch|stan|s roprosont °not woa|th, but on|y compotonco.'
3o |ot's go a b|t h|ghor.

MIddle RIchIstan

ln V|dd|o l|ch|stan, tam|||os havo not worths ot botwoon $10 m||||on and $100 m||||on. |oro too
tho popu|at|on has oxp|odod, to moro than 1.4 m||||on. Yot ||to horo |s a ||tt|o moro comtortab|o.
1ho homos aro b|ggor, tho art |s n|cor and most ot tho ros|donts havo vacat|on homos. Vost
V|dd|o l|ch|stan|s mako tho|r monoy trom sa|ar|os, sma|| bus|nossos or |nvostmont roturns. As
you movo trom lowor to Uppor l|ch|stan, howovor, tho numbor ot ontropronours and bus|noss
ownors starts to |ncroaso. V|dd|o l|ch|stan has tw|co as many ontropronours as lowor
l|ch|stan, show|ng that tho surost path to b|g woa|th |s start|ng your own company and so|||ng |t.
V|dd|o l|ch|stan|s aro a|so moro ||bora| than tho lowors. Vost V|dd|o l|ch|stan|s votod tor
1ohn Korry |n tho |ast pros|dont|a| o|oct|on, ovon though thoy sa|d Vr. 3ush wou|d bo bottor tor
tho|r porsona| t|nanc|a| s|tuat|on. 1ho V|dd|o l|ch|stan|s p|acod a h|ghor omphas|s on oducat|on,
onv|ronmont, and tochno|ogy po||cy.
3t|||, ||v|ng |n V|dd|o l|ch|stan has |ts pr|co. 1ho |nt|at|on rato tor l|ch|stan|s worth $80 m||||on
or moro c||mbod to moro than 11 porcont |n 2004, a|most throo t|mos tho nat|ona| |nt|at|on rato.
3|nco V|dd|o l|ch|stan|s, as wo|| as tho|r woa|th|or brothron, havo grown r|chor at a tastor rato
than lowor l|ch|stan|s, thoy havo moro to spond and towor worr|os about runn|ng out ot monoy.

Upper RIchIstan

1ho ponthousos ot Uppor l|ch|stan aro t|||od w|th tam|||os worth $100 m||||on or moro. Uppor
l|ch|stan has a popu|at|on ot thousands, though tho oxact numbors aron't known. Vost mado
tho|r monoy by start|ng tho|r own compan|os and so|||ng thom, a|though CEOs and monoy
managors (ospoc|a||y hodgo tundors) aro rap|d|y jo|n|ng tho ranks.
1ho ||vos ot Uppor l|ch|stan|s havo bocomo |ncrod|b|y comp||catod. 1o run thom, thoy'ro
croat|ng °tam||y ott|cos'-|argo compan|os dod|catod ont|ro|y to sorv|ng a tam||y's day-to-day
noods, trom |nvostmonts and |oga| work to travo| p|ans and h|r|ng houso statt. Uppor l|ch|stan|s
raro|y opon tho|r own ma|| or pay tho|r own b|||s, wh|ch may ho|p oxp|a|n why tho avorago annua|
spa b||| |n Uppor l|ch|stan |s $107,000.
Whon you ||vo |n Uppor l|ch|stan, your ont|ro ph||osophy ot monoy changos. You roa||zo that
you can't poss|b|y spond a|| ot your tortuno, or ovon part ot |t, |n your ||tot|mo and that your monoy
w||| probab|y grow ovor tho yoars ovon |t you spond |av|sh|y. 3o Uppor l|ch|stan|s p|an tho|r
t|nancos tor tho noxt hundrod yoars. 1hoy don't buy mutua| tunds, thoy buy t|mbor |and, o|| r|gs and
ott|co towors.
3t|||, Uppor l|ch|stan|s havo occas|ona| too||ngs ot |ntor|or|ty. 1hat's bocauso thoy'ro bo|ng
ovorshadowod by tho ros|donts ot 3||||ona|rov|||o.

BIllIonaIrevIlle

3||||ona|rov|||o had on|y 18 |nhab|tants |n 108b. ln 2000 thoro woro moro than 400, accord|ng to
|orbos. los||o Vando|, pros|dont ot tho low York-basod l|ch l|st Co., wh|ch tracks tho woa|thy,
says hor porsona| ||st has moro than 1,000 b||||ona|ros |n tho Un|tod 3tatos, most ot whom havo
stayod undor tho pub||c radar.
1ho porsona| ||vos ot b||||ona|ros aro moro ||ko compan|os. 1ho|r homos aro ||ko hoto|s-
spraw||ng campusos w|th tho|r own |ogos, purchas|ng budgots and |og|ons ot statt. Ask a
b||||ona|ro tor h|s or hor bank statomont and you'|| got a t|vo-|ovo| t|owchart ot |ntor|ock|ng
subs|d|ar|os, ho|d|ng compan|os, |nvostmont tunds and toundat|ons.
3||||ona|ros havo dono ospoc|a||y wo|| ovor tho past docado. 1ho tota| woa|th ho|d by tho
|orbos 400 has moro than doub|od s|nco 100b, trom $480 b||||on to moro than $1 tr||||on today.
Yot ovon b||||ona|ros aro start|ng to too| common. 1|m 3||xsoth, a b||||ona|ro t|mbor baron and
rosort ownor, to|d mo about tho t|mo a mu|t|b||||ona|ro camo to h|s ostato, wh|ch has |ts own
pr|vato go|t courso. Attor p|ay|ng 18 ho|os, tho guost sa|d ho ||kod tho p|aco so much ho wantod
to buy |t. |o handod 1|m a s||p ot papor w|th h|s ottor: $400 m||||on. 1|m turnod |t down, but not
w|thout marvo||ng at what cou|d havo bocomo tho u|t|mato |mpu|so purchaso.
°low that guy,' 3||xsoth sa|d, °bo was r|ch.'
3E|OlE wo moot moro l|ch|stan|s, |ot's tako anothor |ook at how tho wor|d ot tho r|ch has
changod-th|s t|mo through tho oyos ot tho poop|o who sorvo thom.


1

Bu1LER BOO1 CANP

HousetraInIng the New RIch

0awn Carm|chao| stands at attont|on, ho|d|ng two p|atos ot a|mond-crustod soa bass w|th
Voroccan sa|sa. 1ho b|ond, ox-3tarbucks bar|sta |s drossod |n a b|uo su|t and wh|to sh|rt, w|th a
cr|sp|y to|dod napk|n drapod ovor hor |ott arm. 3ho's ||nod up w|th throo othor sorvors |n tho
cavornous k|tchon ot tho 3tarkoy Vans|on, a pr|m, Goorg|an homo |n downtown 0onvor. Whon
thoy got tho s|gna|-two taps on tho k|tchon door-tho group w||| march |nto tho d|n|ng room,
groot tho|r 12 d|nnor guosts and bog|n tho|r t|rst pub||c portormanco ot tho 3a||ot ot 3orv|co.
1ho 3a||ot ot 3orv|co |s a comp|ox rout|no whoro a|| tho wa|tors must sorvo tho p|atos to guosts
|n portoct sync. lt takos hours ot pract|co. And |t |s ono ot tho most domand|ng sk|||s taught horo
at tho 3tarkoy Vans|on-bottor known as 3ut|or 3oot Camp.
Vs. Carm|chao| v|sua||zos tho rout|no: 3orvo to tho |ott, tako two stops to tho r|ght, sh|tt tho
socond p|ato trom r|ght hand to |ott, and sorvo aga|n. Whon °addross|ng' tho tab|o, sho must |oan
|n tar onough tor a smooth p|ato do||vory, but not so c|oso as to mako tho guosts uncomtortab|o.
Attor sorv|ng, sho's supposod to tako ono stop back, wa|t tor oyo contact w|th tho othor sorvors
and ox|t tho room countorc|ockw|so.
Each stop must |ook ||ko a choroographod danco, bu||d|ng to a c||max ca||od tho °crossovor'-
a p|ato-jugg||ng pas do doux |n wh|ch tho but|ors s||do tho socond p|ato trom tho|r r|ght to |ott hand
w|th a qu|ck body p|vot, croat|ng tho |||us|on that tho p|ato |s suspondod |n m|da|r wh||o |t's bo|ng
transtorrod.
1ho 3a||ot ot 3orv|co |s dos|gnod to show ott a|| tho dos|rod tra|ts ot a but|or-to-bo-d|sc|p||no,
ag|||ty, po|so and |nt|macy w|th tab|owaro. And |t's ono ot toughost tra|n|ng oxorc|sos horo at
3ut|or 3oot Camp.
|our t|mos a yoar, asp|r|ng but|ors trom around tho country convorgo tor 3oot Camp tra|n|ng at
3tarkoy, ott|c|a||y known as tho 3tarkoy lntornat|ona| lnst|tuto tor |ousoho|d Vanagomont. 1ho|r
a|m: to bocomo mastors at tho caro and tood|ng ot tho r|ch. |or o|ght wooks, tho studonts ho|o
up |ns|do tho mans|on to cook, c|oan, po||sh, dust, wash and to|d. 1hoy |oarn how to |ron a sot ot
|ronch cutts |n soconds t|at. 1hoy'ro taught how to c||p a 1020 lardona c|gar, how to dust a do
Koon|ng canvas and how to pa|r an oaky chardonnay w|th roastod troo-rango gamo hon.
1hoy |oarn how |ong |t takos to c|oan a 4b,000-squarotoot mans|on (20 to 80 hours dopond|ng
on tho art and ant|quos), whoro to t|nd 1,020-throad-count shoots (Kro|ss.com) and how to ordor
3on 8 1orry's Chunky Vonkoy |co croam at m|dn|ght |t your omp|oyor |s on a yacht |n tho
Vod|torranoan (a 3r|t|sh conc|orgo sorv|co). 1hoy w||| bo ab|o to d|v|do a 80,000-squaro-toot
homo |nto °zonos' tor c|oan|ng and ma|ntonanco. 1hoy w||| dos|gn °stat|onory wardrobos'-
onvo|opos and |ottorhoad spoc|a||y dos|gnod to rot|oct tho ownor's woa|th and soc|a| stand|ng.
1hoy w||| bo taught that sab|o sto|os shou|d novor bo storod |n a codar c|osot (|t dr|os thom out),
and that 3ont|oys shou|d novor, ovor bo run through tho car wash.
Vost ot tho studonts ||vo |n tho mans|on dur|ng 3oot Camp, to||ow|ng tho str|ct 3tarkoy ru|os.
Evoryono has to woar a un|torm ot khak|s, cr|sp wh|to sh|rts, b|uo b|azors and brown shoos. ||rst
namos aro bannod, ovoryono |s °Vr.' or °Vs.' to stross tho |mportanco ot boundar|os. 1ho
studonts aro roqu|rod to r|so trom tho|r soats ovory t|mo a v|s|tor ontors tho room. lt thoro's a
cottoo cup that noods t||||ng, a spoon that noods po||sh|ng or a v|s|tor who noods wo|com|ng, tho
3tarkoy studonts must spr|ng |nto act|on. 1ho but|ors-to-bo aro so w|rod tor sorv|co that whon a
c|ass broak |s announcod, thoy a|| pounco trom tho|r soats to t||| oach othor's wator g|assos.
3y tho ond ot tho courso, tho asp|r|ng but|ors w||| bo mastors at pampor|ng tho pr|v||ogod. 1ho
r|ch, thoy w||| |oarn, ||ko tho|r shampoo bott|os and toothpasto tubos a|ways t|||od to tho top. lt tho|r
omp|oyors havo tour homos, chancos aro thoy'|| want tho|r drossor drawors and bathroom
cab|nots arrangod oxact|y tho samo |n ovory houso, so thoy don't havo to go soarch|ng tor tho|r
socks or p|||s. And thoy |oarn that tho r|ch ||vo |n constant toar ot gorms.
°1hoy'ro hoa|th troaks,' says laymond Champ|on, 3tarkoy's ch|ot |nstructor, stand|ng at tho
wh|toboard |n 3tarkoy's basomont c|assroom. °1hoso poop|o aro vory succosstu| and guoss
what, thoy want to ||vo torovor. 1hoso aro vory gorm-or|ontod poop|o. Got usod to |t. Gorms aro
bogo |n th|s wor|d.'
lo but|or |oavos 3tarkoy w|thout |oarn|ng about tho two othor pr|or|t|os tor tho woa|thy-pots
and co||oct|ons. At 3tarkoy thoso aro known as °3Y1' catogor|os, as |n 3ot Your 1ob.
0ur|ng ono c|ass, Champ|on to||s a story ot a 3outhorn tam||y that had an ont|ro mans|on t|||od
w|th b|rdca||s, wh|ch tho but|or had to dust and ma|nta|n ovory day. 1horo was tho guy w|th b00
cars that noodod hand-wash|ng and tho r|ch ho|ross who had a barn tu|| ot cats and omp|oyod
throo tu||-t|mo ||ttor changors and a tu||-t|mo b|rd toodor to pour soods around tho barn to attract
b|rds to ontorta|n tho cats.
°1ho guy who tod tho b|rds got pa|d moro than any ot us,' ho says.
Vost ot a||, tho 3tarkoy studonts |oarn novor to judgo tho|r omp|oyors, whom thoy ca||
°pr|nc|pa|s.' lt a pr|nc|pa| wants to tood hor sh|h tzu bra|sod boot tondor|o|n stoaks ovory n|ght,
tho but|or shou|d sorvo |t up w|th a sm||o. lt a pr|nc|pa| |s |n la|m 3oach and wants to sond h|s jot
to low York to p|ck up a Chatoau la1our trom h|s 3outh |ampton co||ar, tho but|or makos |t
happon, no quost|ons askod.
3tarkoy studonts pay moro than $12,000 tor 3oot Camp. Wh||o that may sound stoop, tho
payott |s ovon b|ggor. 3ut|or|ng has bocomo ono ot tho tastost-grow|ng jobs |n tho Un|tod 3tatos.
W|th so many l|ch|stan|s nood|ng so many but|ors, domand and pay aro soar|ng. A good
3tarkoy graduato can start at $80,000 to $120,000 a yoar-not to mont|on troo room and board
at tho mans|on.
||rst, thoy havo to got through tho 3a||ot. 1on|ght, 0awn Carm|chao| and tho but|ors aro
norvous. lt's tho|r t|rst 3a||ot and thoy havon't had much pract|co. 0awn gots hor s|gna| and |oads
tho othor throo sorvors |nto tho d|n|ng room. Undor a crysta| chando||or, tho d|nnor guosts aro
arrayod at tho tab|o w|th portoct|y spacod sots ot t|atwaro, t|ngor bow|s and assortod g|assos.
1ho t|rst p|atos go down smooth|y. 3ut on tho crossovor, 0awn movos botoro tho othor throo
sorvors. 3ho troozos, try|ng to got back |n sync. 1ho othor throo a|so troozo. 1ho guosts g|anco
up at tho tour pan|ckod but|ors stand|ng mot|on|oss w|th tho|r p|atos ot soa bass.
||na||y, tho but|ors nod, sorvo tho p|atos and qu|ck|y march out ot tho room.
°l |ost tho rhythm,' 0awn says to tho othor but|ors |n tho k|tchon. °Oh man, was that bad.'
1amos |opk|ns, a trosh-tacod co||ogo grad trom Va|no, |s oqua||y d|sappo|ntod. °lt to|t
awkward,' ho sa|d. °Wo |ookod ||ko robots.'
1ho noxt morn|ng, laymond Champ|on takos tho c|ass to task. A tormor mar|no, whoso
spoc|a|t|os |nc|udo mart|a| arts, woapons tra|n|ng and docorat|vo bak|ng, Champ|on has ||tt|o
pat|onco tor s|opp|noss. |o sorvod as an on||stod a|do to sovora| gonora|s and sorvod |n combat
dur|ng tho t|rst Gu|t War. W|th h|s s|x-toot-two tramo, squaro jaw and |mpoccab|o mannors,
Champ|on makos tor tho portoct dr||| sorgoant tor 3ut|or 3oot Camp.
°l was d|sappo|ntod,' ho to||s tho studonts tho noxt morn|ng, stand|ng |n tront ot h|s wh|toboard.
°vory d|sappo|ntod.'
Champ|on says that as|do trom tho crossovor, thoro woro othor tou|-ups. |o |ooks at 1ohn
looch, a t|amboyant bod-and-broaktast ownor trom upstato low York. looch was |n chargo ot
w|no dur|ng tho d|nnor and h|s job was to koop a|| tho g|assos oxact|y ha|t tu||. Yot ho a||owod
somo g|assos to drop to a quartor tu|| botoro rot||||ng. Champ|on a|so says looch pa|d too much
attont|on to tho guosts' convorsat|on, rathor than ma|nta|n|ng tho dotachod attont|vonoss roqu|rod
ot a but|or.
°What can l say, l'm a vory soc|a| porson,' looch to||s mo |ator. °1ho guosts woro a|| to|||ng
|ntorost|ng stor|os so |t was hard not to ||ston. And l d|dn't koop tho g|assos tu|| bocauso l to|t ||ko l
was bo|ng compu|s|vo. 3ut Champ|on was r|ght.'
1ho noxt n|ght tho c|ass hosts anothor torma| d|nnor. lt goos portoct|y. 0awn |oads an oxport|y
choroographod 3a||ot ot 3orv|co. looch koops tho w|nog|assos oxact|y ha|t tu||. And ho
succosstu||y |gnoros tho guosts' stor|os.
Champ|on groots thom tho noxt morn|ng w|th a broad sm||o.
°Congratu|at|ons,' ho says. °low tbot was sorv|co.'

Joovoa 2.0

1ho story ot tho but|or boom |s tho story ot a|| that has changod about Amor|can woa|th ovor tho
past 1b yoars. lt's not just a ta|o ot moro r|ch poop|o nood|ng moro but|ors, though that's a b|g
part ot |t. lt's a|so tho story ot a now cu|turo ot woa|th omorg|ng |n Amor|ca, dr|von by a now k|nd
ot r|ch porson.
|or much ot tho 20th contury, but|ors woro a dy|ng brood. 1ho grand o|d mans|ons bu||t dur|ng
tho G||dod Ago and loar|ng 1wont|os, w|th tho|r arm|os ot tootmon, cooks, ma|ds, dr|vors and
but|ors, bogan to ta|| |nto d|sropa|r |n tho 1000s and 1070s as woa|th croat|on s|owod. 1ho
domand tor but|ors tadod, a|ong w|th many ot tho O|d Vonoy tortunos. Cu|tura||y, tho r|ch to|| out ot
tavor, a|ong w|th tho not|on ot housoho|d statt. 3ut|ors bocamo ro||cs ot a d|stant wor|d, ox|st|ng
on|y |n l. G. Wodohouso novo|s and por|od t||ms ||ko Romolos oí tbo Loy.
°1ho who|o concopt ot a h|gh |ovo| ot sorv|co |n tho housoho|d van|shod,' says Vary 3tarkoy,
3tarkoy lntornat|ona|'s toundor. °lt wasn't tash|onab|o to havo ho|p.'
low, but|ors aro mak|ng a comoback. 1ho vast now popu|at|on ot l|ch|stan|s, w|th tho|r hugo
homos, mu|t|tudo ot toys and |argo ||tosty|os, has croatod now domand tor housoho|d ho|p.
Va|ds, nann|os, porsona| ass|stants and pr|vato socur|ty guards aro pro||torat|ng. Cator|ng to tho
r|ch-onco cons|dorod doad-ond sorv|co work-|s now a hot caroor track. And ot a|| tho
occupat|ons, tho but|or has soon tho most dramat|c transtormat|on |n sk|||s and pay.
3ut|or p|acomont agonc|os |n low York, ||or|da, 1oxas and Ca||torn|a havo hundrods ot
post|ngs tor jobs and not onough qua||t|od app||cants to t||| thom. 3ut|ors |ook|ng tor work today
otton havo a cho|co ot work|ng |n a ponthouso |n Vanhattan, a boach compound |n 3t. 3art's or a
|og mans|on |n Aspon. A now lntornot s|to tor housoho|d managors, ca||od Estato1obs.com, had
moro than 100 post|ngs on|y throo months attor |ts |aunch |n 200b. 1ho ads, w|th tho|r °Como-to-
tho-3oaut|tu|-3ahamas' sa|os p|tchos, sound moro ||ko travo| promot|ons than job c|ass|t|ods.
|oro aro two ads trom |ato 2000:
l|vo |n boaut|tu| la|m 3oach tor 0 months and 3oston and tho Capo tor tho othor 0 months.
l|vo-|n pos|t|on as a but|or/va|ot. 1ak|ng caro ot V|stor's wardrobo, |nvontory, ||ght cook|ng
tor |unchos whon tho chot |s ott, ontorta|n|ng and guost caro.
l|v|ng quartors aro a protoss|ona||y docoratod 1 bodroom houso on proporty |n ||or|da
and stud|o apartmonts |n 3oston and tho Capo.
Or, tor thoso who protor tho |amptons:
1h|s low York C|ty tam||y noods somoono oxtromo|y organ|zod. 1hoy summor |n tho
|amptons and nood somoono to ass|st |n runn|ng and statt|ng tho|r now summor homo-
now undor construct|on-w|th housokoopors, chots and whatovor o|so |s doomod
nocossary. 1hoy a|so nood somoono toch|o-Vac and 3|ack3orry savvy to sot up systoms
|n tho now boach houso and tac|||tato ontorta|n|ng, travo| arrangomonts and coord|nato w|th
a|| appropr|ato vondors. Othor dut|os |nvo|vo shopp|ng tor prosonts.
1ho 3uroau ot labor 3tat|st|cs doosn't koop stats on but|ors (thoy'ro work|ng on |t). Yot
agonc|os say tho numbor ot r|ch c||onts |ook|ng to h|ro housoho|d managors and but|ors has boon
r|s|ng ovory yoar s|nco tho |ato 1000s.
°lt's not a vory pub||c|zod caroor track,' says 0av|d Gonza|oz, pros|dont and toundor ot tho
0omost|c l|acomont lotwork |n Ca||torn|a, wh|ch a|so owns Estato1obs.com. °3ut thoro's
|ncrod|b|o domand. 1ho numbor ot woa|thy poop|o and tho s|zo ot tho|r homos aro oxp|od|ng.
3uddon|y thoy'ro roa||z|ng thoy nood ho|p.'
Ono ot Gonza|oz's c||onts, tor |nstanco, |s buy|ng 1b homos tor var|ous tam||y mombors and
noods a statt ot about 40 to b0 to run thom a||. Ko|th Groonhouso, ot tho lav||||on Agoncy |n low
York, says ho °can't poss|b|y t||| ovory job ordor wo got.' Wh||o °t|nd|ng good ho|p' has a|ways
boon tho curso ot tho woa|thy, |t's ovon hardor today w|th tho suddon |ncroaso |n l|ch|stan|s.
1hat's tuo|od a surgo |n but|or tra|n|ng. 1ho lrotoss|ona| 3orv|cos and 0omost|c lnst|tuto |n
Oh|o, anothor but|or acadomy, |s p|ann|ng to opon schoo|s around tho country to moot r|s|ng
domand. Caro| 3cudoro, lrotoss|ona|'s toundor, says a|| 40 ot tho but|ors trom hor |ast t|vo
c|assos got jobs botoro or short|y attor graduat|on. Vost startod at $7b,000 or moro. 1ho
acronym C|V, tor Cort|t|od |ousoho|d Vanagor, can now bo tound on bus|noss cards a|ongs|do
moro trad|t|ona| dos|gnat|ons ||ko C|A and 10.
°Vy b|ggost prob|om now |s t|nd|ng studonts,' 3cudoro says. °1horo aro p|onty ot jobs tor
thom.'
3tarkoy, howovor, has bocomo tho hoadquartors ot tho but|or boom, and |t |s tho o|dost and
|argost but|or schoo| |n tho country. Vary lou|so 3tarkoy, a ch|ppor dynamo ot a woman, woars
br|ght ||pst|ck, dramat|c scarvos and a pormanont sm||o. |or bus|noss card roads: °Vary 3tarkoy
-||rst lady ot 3orv|co.'
3tarkoy grow up |n a monoyod tam||y and |oarnod t|rsthand about tho socrots to h|r|ng good
ho|p. |or tam||y ownod a Coca-Co|a bott|or |n 3outh 0akota, and hor tathor's tam||y had como
trom a r|ch c|an |n southorn l|||no|s.
°l usod to go to v|s|t my dad's tam||y homo and th|s to||ow Wa|tor was tho chauttour,' sho says.
°1h|s was my |ntroduct|on to tho sorv|co wor|d. 1ho ro|at|onsh|ps woro tormod attor so many
yoars, and Wa|tor wou|d do anyth|ng tor my grandtathor. |o was proud that h|s ro|o was |n
sorv|co.'
|or tam||y oxpoctod hor to go to co||ogo, t|nd a husband and sott|o down w|th a tam||y. Yot
3tarkoy had othor p|ans. Attor attond|ng a Catho||c un|vors|ty |n 0onvor tor a tow yoars, sho qu|t
and put horso|t through Votropo||tan 3tato Co||ogo and got a dogroo |n commun|ty sorv|cos
dovo|opmont. Attor work|ng a sor|os ot jobs at var|ous char|t|os and toundat|ons, sho qu|t and
wont |ook|ng tor othor work.
Ono day, an acqua|ntanco ca||od |ook|ng tor somoono to c|oan h|s houso. 3tarkoy noodod tho
monoy, s|nco sho had just d|vorcod and was strugg||ng to ra|so two sons. 3ho took tho job and,
spott|ng a potont|a| bus|noss opportun|ty, startod a c|oan|ng sorv|co. W|th|n wooks sho was
t|oodod w|th ca||s and work. 3ho |ator startod a p|acomont company tor ma|ds and nann|os. Ono
day a V|dd|o Eastorn pr|nco who was study|ng |n 0onvor ca||od want|ng a but|or. 3ho |ookod
around town tor but|or agonc|os and cou|dn't t|nd ono. 3o sho doc|dod to start hor own.
3tarkoy qu|ck|y roa||zod, howovor, that tho r|ch woro chang|ng. 1ho O|d Vonoy tam|||os w|th
tho|r wh|tog|ovod, ba|d|ng but|ors woro gono. ln tho|r p|aco was a now gonorat|on ot young, so|t-
mado ontropronours and t|nanco typos who workod round tho c|ock and bu||t toch-|oadod
mans|ons. 1hoso low l|ch d|dn't want a stutty houso mascot. 1hoy noodod a guy (or, moro
otton, a woman) who cou|d got th|ngs dono and manago tho|r |ncroas|ng|y comp||catod homos.
1ho portoct but|or wou|d bo ab|o to ovorsoo 80 vondors-trom tho poo| c|oanors and
|andscapors to tho homo-thoator |nsta||or and dog groomor. 3ho wou|d bo ab|o to manago a
houso budgot ot $2 m||||on a yoar and dota|| ovory |tom on an Exco| sproadshoot. 3ho wou|d bo a
computor gook who cou|d program tho ||ghts on tho smart-homo systom, notwork tho computors
at tho Vontana ranch and rosot tho homo-a|arm systom trom a |aptop m||os away. 3ho wou|d bo
a travo| agont who cou|d book tho noxt t||ght to lar|s and got a pr|mo room at tho Goorgo v. And
sho wou|d bo a |oador who cou|d ovorsoo a toam ot grumpy ma|ds, crazy chots, orud|to nann|os
and sur|y socur|ty guards.
l|ch|stan|s d|dn't want but|ors. 1hoy wantod a ch|ot oporat|ng ott|cor tor Vy l|to lnc. 3o |n
1000, Vary 3tarkoy sat down w|th a d|ct|onary and startod |ook|ng tor a word to doscr|bo tho now
sty|o ot but|or.
Evontua||y sho camo up w|th hor own torm: °housoho|d managor.' W|th tho now t|t|o, Vary
3tarkoy robrandod tho but|or and |aunchod an |ndustry. 3ho toundod tho 3tarkoy lntornat|ona|
lnst|tuto tor |ousoho|d Vanagomont, start|ng |n an o|d houso |n downtown 0onvor and |ator
mov|ng to tho 3tarkoy Vans|on, a rod-br|ck Goorg|an mans|on just boh|nd tho stato cap|to|.
3tarkoy taught tho t|rst c|assos horso|t, thon gradua||y h|rod statt, |nc|ud|ng Vr. Champ|on and
W||||am A|tott, tho cu||nary |nstructor, who has sorvod as tho va|ot and cook to throo U.3.
pros|donts and managod tho v|co pros|dont's homo tor A| Goro. Othor toachors pop |n and out,
|nc|ud|ng a socur|ty oxport, human rosourco oxoc, ||mous|no oxport, jowo|or, ||nons spoc|a||st,
smart-homo systom rota||or and sommo||or.
3tarkoy now runs n|no c|assos a yoar, oducat|ng about 100 budd|ng but|ors |n 2000. lt ho|ds
tour annua| 3oot Camps a|ong w|th an abr|dgod tour-wook °cort|t|od managor's program,' and a
tour-day sottwaro courso.
3tarkoy's rovonuos aro grow|ng at moro than 80 porcont a yoar, tota||ng $2 m||||on |n 200b.
Vost ot Vs. 3tarkoy's sa|os como trom sp|n-ott bus|nossos. 3ho so||s hor own sottwaro, a
housoho|d managor toxtbook (0b0 pagos) and an °ownor's manua|' tor pr|nc|pa|s who havo novor
h|rod housoho|d statt.
Onco a yoar, 3tarkoy hosts a contoronco ca||od °lostor|ng tho Art,' whoro tho grow|ng army ot
housoho|d managors trom around tho country got togothor to swap stor|os and t|ps. 3ho's a|so
wr|t|ng a now book on ot|quotto and |aunch|ng a program to oducato tam||y ott|cos. 1ho b|ggost
prot|ts como trom p|acomont and consu|t|ng, s|nco sho gots a 2b to 8b porcont comm|ss|on on
tho t|rst yoar's sa|ary tor oach h|ro.
W|th a|| tho housoho|d managors sho's graduat|ng, Vs. 3tarkoy st||| doosn't havo onough
studonts to moot domand. On tho th|rd t|oor ot tho 3tarkoy Vans|on, a toam ot p|acomont
workors roco|vos dozons ot ca||s a day trom now|y r|ch homoownors |ook|ng tor ho|p. A |argo
cha|kboard on tho wa|| ||sts moro than a dozon roquosts tor housoho|d managors.
Cort|t|od |ousoho|d Vanagor noodod tor |argo homo-$00,000 a yoar.
Cort|t|od |ousoho|d Vanagor-qua||t|od tor ontorta|nmont, |argo construct|on projocts, jots,
boats, adm|n|strat|on.
3y p|ac|ng so many but|ors, Vs. 3tarkoy has ga|nod an |nnato undorstand|ng ot tho now
l|ch|stan|s. Otton, sho has to tocus moro on what thoy say than on what thoy do. 1ho now|y
woa|thy, tor |nstanco, |ovo to say that thoy'ro s|mp|o m|dd|o-c|ass poop|o, ovon |t thoy happon to
own tour homos and a Gu|tstroam. On tho t|rst day ot 3ut|or 3oot Camp, Vs. 3tarkoy to||s hor
c|ass tho story ot a Connoct|cut hodgo-tund managor who sought hor adv|co on h|r|ng a but|or.
°l got thoro, and th|s coup|o sa|d, 'Wo'ro roa||y s|mp|o, casua| poop|o. Wo just nood somoono
to do a ||tt|o cook|ng and c|oan|ng.' Wo||, tho w|to |s th|s stunn|ng tormor dancor and sho's
woar|ng a|| Chano| and 3urborry. 1hoy havo Vastors' art a|| ovor tho wa||s, thoy havo a |ap poo| |n
tho basomont w|th pa|m troos and a b,000-bott|o w|no co||ar. Whon l ask to soo tho tab|o sott|ngs,
tho w|to shows mo hor 20-p|oco Chr|stot|o t|atwaro, w|th tho t|sh kn|vos and tho who|o shobang.
loth|ng was casua| or s|mp|o about tho|r ||to. '1ust a ||tt|o cook|ng and c|oan|ng.' Wanna bot?'
Vs. 3tarkoy a|so has to work around tho tondoncy ot today's r|ch to got chummy w|th tho|r ho|p.
|or c||onts havo portoctod tho art ot taux popu||sm and hato tho |doa ot bo|ng stutty bossos. 1hoy
want to show thoy can bo °tr|onds' w|th tho|r ho|p-ovon whon thoy'ro not. 1o draw tho ||no, Vs.
3tarkoy bans tho uso ot t|rst namos |n tho mans|on, |ns|st|ng that ovoryono bo ca||od °Vr.' or
°Vs.' 3ho makos tho samo roquost ot omp|oyors.
°lt your omp|oyor says to you, 'Oh just ca|| mo Chandra and th|s |s 1|m,' do not accopt,' 3tarkoy
to||s tho c|ass. °|avo you ovor askod tor a ra|so trom 'Chandra'? You'ro not bost buds. loop|o
projoct a|| k|nds ot ro|at|onsh|ps on to you . . . mothor, daughtor, tathor, s|stor, tr|ond. 3ut you aro
a protoss|ona|. 3oundar|os aro cr|t|ca|.'
1o cator to th|s now brood ot r|ch porson, Vs. 3tarkoy had to croato a who|o now k|nd ot but|or
program, tar romovod trom tho O|d Wor|d but|or acadom|os |n 3r|ta|n. 3uro, hor but|ors |oarn to
cook and c|oan. 3ut thoy a|so |oarn to bocomo oxocut|vos ot tho spraw||ng, modorn, s|xstar
rosorts l|ch|stan|s ca|| homo.
3o 3ut|or 3oot Camp |s bu||t around an |ntr|cato managomont systom ca||od tho 3orv|co
Vanagomont Vodo|. 3ut|ors spond moro than 100 hours |oarn|ng tho systom, wh|ch thoy'ro
oxpoctod to uso whorovor thoy go. lt's a k|nd ot but|or's bus|noss p|an, usod to roassuro today's
managomont-obsossod, t|owchart-tr|ond|y woa|thy that thoy'ro mak|ng a good h|ro.
1ho modo| starts w|th tho 3orv|co v|s|on, ak|n to a corporato stratogy statomont, whoro tho
but|or dota||s oxact|y what k|nd ot atmosphoro ho or sho |s try|ng to croato |n tho houso (torma|,
|ntorma|, boach party pad or O|d Wor|d ostato). 1hat's to||owod by tho loop|o 3oct|on, |n wh|ch
tho but|or dota||s tho tam||y troo, tam||y goa|s, va|uos, ||tosty|o and schodu|os. 1ho Env|ronmont
3oct|on doscr|bos tho phys|ca| d|mons|ons ot tho houso and grounds.
1ho coro ot tho systom |s tho 3tandards Vatr|x, wh|ch |nc|udos tho °10 3orv|co 3tandards and
lorpotua| 3orv|co var|ab|os.' lt g|vos °baso||no' standards tor corta|n |ovo|s ot sorv|co. |or
|nstanco, shou|d you wash tho dog bod onco or tw|co a day? 0o omp|oyors ||ko tho|r 1-sh|rts
hung |nstoad ot to|dod? 0o thoy protor °p|atod' or tam||y-sty|o sorv|co at d|nnor? |ousoho|d
managors ovon work up a °t|avor prot||o' tor a|| tam||y mombors, dotorm|n|ng, tor |nstanco, |t
ono's comtort toods aro moat|oat and potatoos or buttor-poachod |obstor w|th champagno go|oo.
As tho job ot but|or|ng has changod so has tho prot||o ot tho but|ors. Gono aro tho st|tt, jow|y o|d
mon who woro born |nto tho trado. 1oday's housoho|d managors aro youngor, otton co||ogo-
oducatod, and moro ||ko|y to bo womon. Ot tho 10 studonts onro||od |n tho 3tarkoy c|ass l v|s|tod,
ha|t woro womon. Vost woro |n tho|r 80s and 40s and most had como trom somo k|nd ot sorv|co
protoss|on, ||ko hoto|s, rosorts or rostaurants. A|| c|a|mod to bo comm|ttod to somoth|ng ca||od
°tho sorv|co hoart.'
lt you ask any but|ors-|n-tra|n|ng why thoy doc|dod to spond tho rost ot tho|r ||vos cator|ng to tho
wh|ms ot tho r|ch, thoy'|| |nov|tab|y mont|on tho|r °sorv|co hoart.' 0awn Carm|chao| says that sho
d|scovorod hor sorv|co hoart whon sho workod br|ot|y as a housoho|d ass|stant tor a woa|thy
ranch ownor. 3ho ho|pod ma|nta|n h|s two homos, proparod h|s tood, ho|pod h|m ontorta|n
guosts and p|annod h|s tr|ps.
°l |ovod know|ng what mado h|m happy,' sho says. °l soct|onod h|s grapotru|t ovory morn|ng just
tho way ho ||kod |t and l a|ways kopt tho 1v tunod to channo| 80, wh|ch was h|s tavor|to. l wou|d
somot|mos ask myso|t, 'Why |s |t so |mportant to mo to got h|m tho r|ght k|nd ot potato ch|ps? Am
l s|ck? What |s wrong w|th mo?' 3ut thon l camo to 3tarkoy and roa||zod that thoro aro othors out
thoro ||ko mo. l roa||y too| ||ko l'vo tound out what l was moant to do.'
1amos |opk|ns, tho 22-yoar-o|d co||ogo grad w|th a dogroo |n hosp|ta||ty, d|scovorod h|s
sorv|co hoart grow|ng up noar 3ar |arbor, Va|no. ||s tathor was a t|shorman and tho tam||y
d|dn't havo much monoy. 1amos startod mow|ng |awns |n tho summor and |andod a job at ono ot
tho spraw||ng ocoans|do ostatos |n noarby 3oa| |arbor, cutt|ng tho grass and ma|nta|n|ng tho
grounds. 1ho tam||y took a ||k|ng to h|m, and ho startod do|ng othor sma|| choros-gardon|ng,
|andscap|ng, dock|ng tho|r boat-and ovon somo work |n tho houso.
°l roa||zod l ||kod bo|ng around woa|th,' ho says. °You know, tho tam||y |s t|own to |ranco tor
|unch, or thoy doc|do to havo dr|nks on tho yacht. lt l can p|ay a part |n mak|ng that happon, l'd bo
protty happy.'
3o Vr. |opk|ns borrowod $20,000 |n studont |oans to got a co||ogo dogroo |n hosp|ta||ty. 1hon
ho borrowod anothor $12,000 to attond 3tarkoy.
°l'm k|nd ot norvous,' |opk|ns sa|d on tho t|rst day ot c|ass. °l'm k|nd ot young tor th|s k|nd ot
work. 3ut l'm roady to |oarn.'
Kov|n 3tattord d|scovorod h|s sorv|co hoart boh|nd a bar. 3tattord, a 48-yoar-o|d ||or|d|an w|th
a bushy rod mustacho, th|ck g|assos and oarnost domoanor, workod tor yoars as bartondor at
3ornard's 3urt, a |oungo |n Cocoa 3oach, ||or|da. 3ornard's was a b|g hangout tor lA3A
ong|noors, and 3tattord spont h|s days and n|ghts sorv|ng up co|d boors and goss|p|ng about tho
spaco program.
°l spont a |ot ot t|mo ta|k|ng about O-r|ngs and tuo| go|s,' 3tattord to|d mo.
Ono n|ght sovora| yoars ago, a young coup|o camo |n trom out ot town. 1hoy ordorod a vodka
scrowdr|vor and a 3to|| mart|n| stra|ght up. 3tattord chattod w|th thom and |oarnod thoy woro |n
town tor vacat|on. A yoar |ator, tho coup|o camo back and 3tattord askod, °3crowdr|vor and 3to||
mart|n|?'
°1hoy woro amazod that l romomborod,' ho says. Attor chatt|ng w|th 3tattord somo moro, tho
man turnod to h|s w|to and sa|d, °1h|s |s whoro l'm go|ng to mako my tortuno, and whon l do, l'm
go|ng to h|ro Kov|n horo to bo our but|or.'
3uro onough, tho coup|o movod to ||or|da and mado a tortuno trom Or|ando roa| ostato.
1hoy'vo just put tho t|n|sh|ng touchos on an 11,000-squaro-toot ponthouso |n Cocoa 3oach and
h|rod 3tattord to manago |t. 1hoy a|so h|rod 3tattord's w|to, bought h|m a now truck and agrood
to ronovato h|s houso. On top ot that, thoy agrood to pay tor h|s tra|n|ng at 3tarkoy.
°l'm so gratotu|,' 3tattord says attor c|ass ono day, toars wo|||ng up |n h|s oyos. °lt's ||ko a
droam.'
3U1lEl 3oot Camp, howovor, turnod out to bo |oss onchant|ng tor Vr. 3tattord and many ot h|s
c|assmatos. V|dway through 3tarkoy's 70th 3oot Camp, tho stross startod to show. 1ho n|ght
botoro tho torma| d|nnor, a d|sputo oruptod ovor a to|t tab|o pad. 1ho pad was too sma||, and
0awn and anothor studont-a 3ormudan namod 3ovor|y-got |nto a br|ot argumont ovor how to
t|x |t. 3ovor|y sa|d |t was hor job and sho'd hand|o |t, and 0awn oruptod, say|ng, °0on't ovoo ta|k
to mo ||ko that.' Champ|on ovorhoard tho spat and hau|od 0awn |nto tho study tor a pr|vato chat.
°|o sa|d, 'What |t tho pr|nc|pa| had boon thoro?'' 0awn roca||s. °|o sa|d my op|n|on doosn't
mattor un|oss |t's askod tor. And ho sa|d |t ho hoard mo spoak to anyono ||ko that aga|n, l'd bo
out ot 3tarkoy.'
0awn burst out ot tho room cry|ng and wa|kod outs|do |nto a b||zzard. 3ho sat |n hor car |n tho
park|ng |ot tor ovor an hour, try|ng to doc|do whothor to stay at 3tarkoy or dr|vo away.
°l roa||zod that l bo|ongod thoro,' sho sa|d. °And l roa||zod that l camo to 3tarkoy to |oarn about
graco and doportmont, and that's what Champ|on was toach|ng mo.' graco and doportmont, and that's what Champ|on was toach|ng mo.'
3ho brushod horso|t ott, wont back |n and comp|otod tho courso.
1amos |opk|ns a|so had h|s |ow momonts. 1hough po|sod tor a 22-yoar-o|d, ho st||| had
co||ogo-ago t|cs that rot|octod poor|y on a tuturo but|or. |o sa|d °yoah' |nstoad ot °yos.' |o
chowod on h|s t|ngorna||s. |o raro|y |ookod you stra|ght |n tho oyo whon spoak|ng.
Champ|on poundod h|m da||y, corroct|ng h|s °yoahs' and po|nt|ng out tho na||-b|t|ng.
°|o kopt on mo,' |opk|ns sa|d. °3ut l noodod |t.'
Ono day, Champ|on spont ovor two hours toach|ng tho studonts how to opon tho tront door tor
guosts-a must tor any but|or. 1ho but|or, ho oxp|a|nod, shou|d draw tho door opon qu|ck|y and
smooth|y, but not so tast as to bo start||ng. |o or sho shou|d tako ono stop back wh||o tho door
opons, koop|ng tho shou|dors oxact|y para||o| w|th tho door.
°Evoryth|ng wo do shou|d bo ||ko a product|on,' ho says. °ln th|s caso, |t's ||ko opon|ng tho
curta|n onto tho stago ot tho houso.'
At ono po|nt Kov|n 3tattord had to ask tor ho|p trom two othor c|assmatos bocauso ho was
ta|||ng boh|nd on h|s workbook.
°1horo was ono po|nt whoro wo woron't suro whothor 3tattord was go|ng to graduato,' 1ohn
looch says. °|o pu||od through.'
3omo ot tho studonts say pr|vato|y that Champ|on pushod too hard, that ho got upsot ovor
sma|| dota||s. Whon l mont|on |t, Champ|on to||s tho story ot how ho sorvod |n tho t|rst Gu|t War
and |ost a buddy dur|ng a dosort ra|d. Go|ng |nto batt|o, Champ|on to|d h|s tr|ond that thoy wou|d
t|ght and como back togothor. ||s tr|ond novor mado |t back.
°lt's tho samo w|th thoso studonts,' ho says. °l w||| novor g|vo up on thom, l w||| novor |ot thom
down.'
3y graduat|on day tho but|ors aro a|| sm||os. 3tattord |s hoadod back to ||or|da to work at tho
ponthouso. 1wo othor 3oot Campors got h|rod to manago a spraw||ng ostato |n Wash|ngton, w|th
ono ot thom start|ng at $120,000 a yoar. looch was ottorod a job at a p|ush now |uxury rosort |n
vanuatu, whoro a ono-wook stay costs coup|os $2b0,000 (ho turnod |t down). And |opk|ns got a
job |n ||or|da work|ng tor a monoy managor. Vs. Carm|chao| had a tow ottors, though sho hadn't
|andod a job yot.
°l |ovo th|s work,' sho says, wa|k|ng down tho tront stops ot tho 3tarkoy Vans|on attor tho
graduat|on coromony. °l know that th|s |s what l was put on th|s oarth to do.'

Eouaotraining tho Now Rich

1ust as now but|ors nood tra|n|ng, so do tho low l|ch. 3|nco most ot today's l|ch|stan|s grow up
m|dd|o c|ass, thoy'ro not usod to hav|ng sorvants. 1hoy'ro usod to do|ng th|ngs thomso|vos, and
thoy'ro uncomtortab|o w|th tho stutty torma||t|os that otton como w|th h|r|ng houso statt.
1ako tho caso ot 3ob, a roa|ostato tycoon and ranch ownor |n tho |ar Wost. 3ob, h|s w|to and
two k|ds ||vo on 800 acros ot |and w|th 10,000 squaro toot ot ||v|ng spaco. 1hoy havo a ma|n
houso, art stud|o, hunt|ng cab|n and othor bu||d|ngs scattorod around tho proporty. 1o manago |t
a||, 3ob h|rod s|x houso statt, |nc|ud|ng a housoho|d managor trom 3tarkoy.
Gott|ng usod to ||v|ng w|th a|| thoso strangors took t|mo. Espoc|a||y s|nco ho grow up |n what ho
ca||s a °Wondor Yoars' onv|ronmont, |n postwar, m|dd|o-c|ass suburb|a.
°lt's b|zarro,' ho says. °lt's not as g|amorous as |t sounds to havo a houso statt. You havo a||
thoso poop|o touch|ng ovoryth|ng trom your undorwoar to your mod|c|no. lt's not roa||y our
protoronco.°
1ho roason ho h|rod a|| that ho|p was to g|vo h|m and h|s w|to moro t|mo w|th tho|r k|ds. 3|nco
thoy run tho|r own bus|noss, thoy'ro not homo much and wantod to spond tho|r troo t|mo w|th tho|r
two sons, rathor than cook|ng, c|oan|ng or mow|ng tho |awn.
°Whon wo'ro homo, wo wantod to do noth|ng but spond t|mo w|th our boys. Wo don't do any
housoho|d choros, wo don't t|x anyth|ng, wo don't c|oan anyth|ng. Our goa| was to spond bb hours
a wook w|th our k|ds, wh|ch wo havo now ach|ovod.'
Yot 3ob qu|ck|y d|scovorod that manag|ng a houso statt has |ts own hoadachos.
°3uddon|y thoro's a|| th|s tunky po||t|cs go|ng on |n your houso. l|ko tho housokoopor m|ght bo
n|co to us, but sho's throaton|ng to tho othor omp|oyoos. 3o wo had to got r|d ot that
housokoopor.'
||s t|rst housoho|d managor was ovon worso. An oxact|ng woman who spoc|a||zod |n torma|
ontorta|nmont, sho asp|rod to work |n a houso that throw |av|sh part|os tor prom|nont guosts.
lnstoad, sho got 3ob and h|s tam||y, whoso |doa ot a good t|mo |s a mounta|n-b|ko r|do around
tho ranch to||owod by a b|g sa|ad. Vost n|ghts attor d|nnor, thoy road to tho k|ds or watch 1040s
comod|os on 0v0. 3ob raro|y woars a su|t, dr|vos a s|x-yoar-o|d car and raro|y throws part|os.
1ho housoho|d managor was doop|y d|sappo|ntod.
°Wo woron't tho r|ch, tamous poop|o sho was hop|ng tor,' 3ob says.
3ho tr|od to convort thom, anyway. Evory |r|day n|ght, sho prosontod a torma| d|nnor tor tho
tam||y. 3ob, h|s w|to and two sons wou|d s|t down at tho d|nnor tab|o and tho housoho|d managor
wou|d sorvo thom trom s||vor p|attors. 3ho ovon bought an oxpons|vo stoam pross to smooth tho
napk|ns |nto portoct tr|ang|os.
°0ur|ng ono ot thoso d|nnors my w|to and l turnod to oach othor and sa|d, 'What's tho doa|?
0oos sho th|nk th|s |s how wo'ro supposod to ||vo?''
Ono t|mo, 3ob's w|to |ns|stod that tho housoho|d managor ca|| hor by hor t|rst namo. |or
rosponso, °Yos, Vrs. . . .'
Evontua||y, 3ob got tod up and h|rod a now housoho|d managor, th|s ono trom 3tarkoy. 3o tar,
ho's workod out portoct|y. A tormor bank workor, tho housoho|d managor runs tho houso tho way
3ob ||kos |t-||ko a bus|noss. And 3ob pays h|m accord|ng|y, at $80,000 a yoar.
°What 3tarkoy doos |s toach a bus|noss dogroo,' 3ob says. °W|th my housoho|d managor, wo
havo ovoryth|ng on Exco| sproadshoots. l got summary roports on tho wookond and o-ma||s
throughout tho day. A|| tho crod|t cards and chocks run on Ou|ckon and wo run our homo ||ko a
bus|noss, w|th a conso||datod l8l and ovoryth|ng.'
|o a|so ||kos tho tact that h|s housoho|d managor sooms to onjoy sorv|co.
°Wo'vo had p|onty ot sur|y poop|o work tor us, and you can to||, thoy rosont |t. Our crow now,
thoy undorstand that wo'ro just norma| poop|o and that wo havo thom thoro so wo can spond t|mo
w|th our k|ds. l th|nk thoy rospoct that.'
Yot 3ob st||| has momonts whon ho wondors how h|s ||to got so comp||catod. As|do trom h|s s|x
statt-tho housoho|d managor, c|oan|ng woman, ass|stant, |andscapor and hor two |aborors-ho
ost|matos that ho has about 200 vondors who rogu|ar|y como to tho houso.
°l just |oarnod that wo havo a potass|um oxport bocauso wo grow grapos,' ho says. °l novor
thought l'd havo a so|| doctor. And wo havo th|s woman who comos |n to do taux |ronch t|n|shos
on our cab|nots. And a spoc|a| guy who comos |n to t|x our |ronch taucots. lt turns out you can't
just ca|| A1 p|umb|ng to t|x an Eto||o taucot.
°l got o-ma||s dur|ng tho day say|ng 'l|oaso approvo $8,000 paymont tor aorator tor tho north
pond.' Our grocory ||st |s dono on an Exco| sproadshoot. Wo ovon havo anothor Exco|
sproadshoot tor our poo| tomporaturos. 1hat's protty strango.'
|o sums up h|s now ||to w|th a story about a mouso.
°1ho othor day wo saw a mouso |n tho houso. 3otoro, l wou|d havo just gotton a broom and
gotton r|d ot tho th|ng. 3ut now |t's d|ttoront. l o-ma||od tho housoho|d managor. |o ca||od tho
vondor, a post-contro| t|rm, and tho post-contro| t|rm caught tho mouso. 1hon tho housoho|d
managor d|roctod two othor statt mombors to d|sposo ot tho mouso. 1hat's t|vo poop|o to catch a
mouso, |nstoad ot a broom. lt a|| soomod norma| at tho t|mo. 3ut thon l thought about |t, and l
wondorod, how d|d our ||vos got ||ko th|s?'
|OW d|d l|ch|stan|s got whoro thoy aro? And how d|d so many got so woa|thy? 0osp|to a|| tho
hoad||nos about CEO pay and °w|nnor-tako-a||' sa|ar|os, most ot today's mu|t|m||||ona|ros and
b||||ona|ros owo tho|r tortunos to a d|ttoront, and broador, sor|os ot oconom|c changos.


2

1EE 1E|RD WAVE

1he Era o| the lnstapreneur

1ho |atost Amor|can woa|th boom |s at onco unprocodontod and convont|ona|. Wh||o |ts s|zo and
sca|o havo novor boon matchod |n h|story, |ts root causos aro s|m||ar to thoso that sparkod tho
country's two othor b|g booms, tho G||dod Ago and tho loar|ng 1wont|os.
ln h|s book ¼oo|tb ooo Lomocrocy, Kov|n lh||||ps wr|tos that |argo sp|kos |n Amor|can woa|th
havo boon dr|von by tho samo convorgonco ot torcos: now tochno|og|os, a r|so |n t|nanc|a|
spocu|at|on and govornmonts support|vo ot troo markots and tho woa|thy. C|t|ng tho work ot
Austr|an oconom|st 1osoph 3chumpotor, lh||||ps arguos that now tochno|og|os and spocu|at|vo
t|nanc|a| markots havo h|stor|ca||y tod ott oach othor to croato rocord numbors ot m||||ona|ros and
b||||ona|ros.
°ln an ago ot oxcoss, tochno|ogy and t|nanco jo|nod to |oad tho way,' ho wr|tos.
1ho t|rst ot tho nat|on's major woa|th wavos was tho G||dod Ago, wh|ch bogan attor tho C|v||
War. la||roads, o|| and stoo| woro tho now tochno|og|os ot tho day, wh||o tho omorgonco ot a
nat|ona| bank|ng systom and tho r|so ot stocks prov|dod tho t|nanc|a| tuo|. Govornmont
oncouragod tho b|g o||, sugar, wh|sky and sugar trusts, and tho U.3. 3onato was packod w|th
troo-markotoor|ng m||||ona|ros. 1ho numbor ot m||||ona|ros |n tho Un|tod 3tatos soarod to about
4,b00 by 1000. 1ho b|ggost Amor|can tortunos roso trom $10 m||||on or $20 m||||on |n tho m|d-
1800s to botwoon $200 m||||on and $800 m||||on at tho turn ot tho contury. 3tandard O|| toundor
1ohn 0. lockoto||or oxp|odod a|| rocords whon ho bocamo a b||||ona|ro |n tho oar|y 1000s.
Woa|th bocamo h|gh|y concontratod goograph|ca||y, w|th most ot tho tortunos ros|d|ng |n tho
lorthoast. lt a|so bocamo concontratod oconom|ca||y. 3y 1800, as much as ha|t ot tho country's
woa|th was ho|d by tho r|chost 1 porcont ot tam|||os.
1ho G||dod Ago was to||owod by tho socond wavo, tho loar|ng 1wont|os. Wart|mo prot|ts and
tho advont ot rad|o, mov|ng p|cturos, autos and to|ophonos croatod a surgo |n consumor
domand. lowor taxos on d|v|donds, a r|so |n tho stock markot and an |ncroaso |n morgors
comb|nod to produco a now gonorat|on ot t|nanco-dr|von tortunos. 1ho numbor ot m||||ona|ros |n
tho Un|tod 3tatos jumpod trom botwoon b,000 and 7,000 |n 1021 to botwoon 2b,000 and 8b,000
at tho markot's poak |n 1020. ln 1020, just botoro tho markot crash, tho nat|on's woa|th|ost 1
porcont st||| ho|d noar|y ha|t tho nat|on's woa|th.
1ho postwar por|od, trom tho m|d-1040s to tho 1000s, a|so producod s|gn|t|cant woa|th. 1ho
0ow 1onos lndustr|a| Avorago, attor two yoars |n tho do|drums, bogan to march h|ghor. 1ho
v|ctory ovor 1apan and Gormany oponod up now g|oba| markots tor compan|os that had thr|vod
dur|ng tho war. And Amor|can consumors wont on a nat|ona| shopp|ng sproo tor cars, homos and
app||ancos. Yot un||ko tho prov|ous booms, tho oconom|c ga|ns |n tho 10b0s and 1000s woro
sproad moro broad|y throughout tho popu|at|on. 1ho r|ch actua||y |ost ground dur|ng tho postwar
docados. 1ho sharo ot tho nat|on's woa|th ho|d by tho top 1 porcont to|| dramat|ca||y, trom about
48 porcont ot tho tota|, to just ovor 20 porcont |n tho m|d to |ato 1070s, |oad|ng oconom|sts
C|aud|a Go|d|n and lobort Vargo to |abo| tho por|od as tho Groat Compross|on. Cu|tura||y and
po||t|ca||y, tho r|ch to|| out ot tavor:
1ho m|dd|o c|ass othos ru|od . . . tho r|ch had bocomo '|nconsp|cuous consumors,' o|thor
suttor|ng trom a gu||t comp|ox or atra|d ot g|v|ng v|s|b|o ottonso. 1ho|r b|g housos had boon
so|d ott to bocomo orphanagos or o|d-ago homos and towor uppor-|ncomo tam|||os had
sorvants.
ln tho 1080s, tho trond startod rovors|ng. W|th tho r|so ot |ntormat|on tochno|og|os, cap|ta|
markots and dorogu|at|on |n govornmont, tho woa|thy startod to roga|n oconom|c ground. 1ho
sharo ot woa|th ho|d by tho top 1 porcont jumpod to 80 porcont |n 1080, and has s|nco r|son to 88
porcont.
Wh||o tho 1080s camo to bo known as tho °docado ot grood' (to||ow|ng Gordon Gokko's ||no
trom tho t||m ¼o|| 5troot that °Grood |s r|ght. Grood works'), tho docado turnod out to bo a m||d
pro|udo to tho 1000s and oar|y 2000s. 1ho curront woa|th boom-|ot's ca|| |t tho 1h|rd Wavo-
sharos many ot tho samo charactor|st|cs as tho G||dod Ago and tho loar|ng 1wont|os, w|th |ts
convorgonco ot tochno|ogy, t|nanco and troo-markot po||c|os.
Yot tho 1h|rd Wavo has tar surpassod tho prov|ous two wavos. |a|t ot Amor|ca's tota| woa|th
has boon croatod ovor tho past 10 yoars. lockoto||or's $1 b||||on wou|d bo worth $14 b||||on today
-|oss than tho not worth ot oocb ot tho t|vo ottspr|ng ot Wa|-Vart toundor 3am Wa|ton.
1ho 1h|rd Wavo a|so stands out g|oba||y. |or tho t|rst t|mo ovor, tho Un|tod 3tatos |n 2004
surpassod Europo |n tho popu|at|on ot m||||ona|ros. ln 200b, tho Un|tod 3tatos crankod out
227,000 now t|nanc|a| m||||ona|ros (thoso w|th |nvost|b|o assots ot moro than $1 m||||on). Ch|na,
dosp|to a|| tho ta|k about |ts now woa|th, addod on|y 20,000 now t|nanc|a| m||||ona|ros |n 200b,
and |ts tota| m||||ona|ro popu|at|on |s ono-hundrodth ot Amor|ca's. lnd|a has on|y 88,000
m||||ona|ros-about tho samo as lorth Caro||na.
1ho curront woa|th boom |s tho rosu|t ot th|s c|ass|c convorgonco ot oconom|c torcos-tho r|so
ot t|nanc|a| markots, now tochno|og|os and a troor t|ow ot goods and |ntormat|on around tho
wor|d. Yot |t |s tho growth |n t|nanco, moro than any othor tactor, that |s dr|v|ng tho 1h|rd Wavo and
a||ow|ng poop|o to bocomo r|chor, tastor than ovor botoro.

Noro Nonoy = Noro WoaIth

1ho two words that pr|vato bankors ||ko to hoar most aro °||qu|d|ty ovont.' A ||qu|d|ty ovont |s tho
mag|c momont whon an ontropronour or corporato oxocut|vo so||s h|s or hor stako |n a company
tor truck|oads ot cash. 3ankors |ovo ||qu|d|ty ovonts, s|nco thoy g|vo thom an |nstant p||o ot monoy
to manago. 3o do tho ontropronours and oxocut|vos. ln tho 1h|rd Wavo, ||qu|d|ty ovonts havo
bocomo tho most common sourco ot roa| r|chos, outpac|ng |nhor|tanco, |ncomo and othor
sourcos.
3oh|nd a|| thoso ||qu|d|ty ovonts |s a broador sh|tt |n tho wor|d ot t|nanco. Yoars ot |ow |ntorost
ratos around tho wor|d, a|ong w|th grow|ng rot|romont accounts, r|s|ng corporato prot|ts and
|ncroasod g|oba| sav|ngs (Ch|na a|ono ho|ds moro than $1.7 tr||||on |n sav|ngs dopos|ts), havo
croatod a hugo now wavo ot monoy. G|oba| pons|on, |nsuranco and mutua| tunds havo $40 tr||||on
at tho|r d|sposa|, up a|most a th|rd trom 2000. ln tho samo por|od, g|oba| contra|-bank rosorvos
havo doub|od to $4 tr||||on, and othor gaugos ot ava||ab|o cap|ta| havo r|son as wo||. Wh||o
Amor|cans may not bo sav|ng much, tam|||os abroad aro sav|ng much groator sharos ot tho|r
|ncomos.
A|| th|s cash p|||ng up around tho wor|d has croatod what |od Cha|rman 3on 3ornanko onco
|abo|od tho °g|oba| sav|ngs g|ut.' Othors havo ca||od |t tho °Wa|| ot Vonoy.'
ln roa||ty, |t's moro ||ko a r|vor ot monoy, cours|ng around tho wor|d, carv|ng out now oconom|c
tr|butar|os and |ook|ng tor out|ots. 3tocks havo boon tho most v|s|b|o out|ots. 3|nco 1000 tho
va|uo ot a|| stocks tradod |n tho Un|tod 3tatos skyrockotod trom $8 tr||||on |n 1000 to moro than
$17 tr||||on today. Evon attor tho stock s|ump ot tho oar|y 2000s, markot |ndoxos cont|nuod to
march h|ghor, w|th tho 0ow broak|ng now rocords |n 2007.
1ho r|vor ot monoy has a|so t|oodod |nto so-ca||od a|tornat|vo |nvostmonts, ||ko hodgo tunds,
pr|vato-oqu|ty tunds and vonturo cap|ta|. 1horo aro now moro than 8,000 hodgo tunds manag|ng
moro than $1 tr||||on. lr|vato-oqu|ty t|rms and vonturo cap|ta||sts havo moro than $b00 b||||on at
tho|r d|sposa|. 1horo's so much monoy pour|ng |nto hodgo tunds and vonturo-cap|ta| t|rms that
thoy'ro actua||y turn|ng away |nvostors. (As wo'|| soo |n a |ator chaptor, gott|ng rojoctod by hodgo
tunds and pr|vato-oqu|ty t|rms has croatod now m|sor|os tor r|ch |nvostors.)
|rom stock markots and a|tornat|vo |nvostmonts, tho surgo ot cash |s a|so t|nd|ng |ts way to
|nd|v|dua|s. Vost l|ch|stan|s got whoro thoy aro by tapp|ng |nto th|s g|oba| r|vor ot cash-usua||y
by start|ng tho|r own compan|os. Othors got thoro by bo|ng oxocut|vos and d|pp|ng |nto tho r|vor
through stock-basod pay.
1oday's l|ch|stan|s gonora||y ta|| |nto ono ot t|vo catogor|os:
1. Foundora. 1hoso aro tho ontropronours who startod tho|r own compan|os and so|d tho|r
sharos to |nvostors through an |n|t|a| pub||c ottor|ng. Vost ot tho |orbos ||st ta||s |nto th|s catogory,
trom 3||| Gatos and 3ho|don Ado|son to larry E|||son and V|chao| 0o||. Voro than 4,000 pr|vato
compan|os havo so|d stock to tho pub||c through llOs s|nco 100b, ra|s|ng $b00 b||||on |n cash.
2. 5takohoIdora. 1hoso aro oxocut|vos (nontoundors) who havo stakos |n a pr|vato company,
thon cash out whon |t goos pub||c. Whon do||vory g|ant Ul3 wont pub||c |n 1000, dozons ot top
oxocut|vos and managors who startod out as dr|vors and packago sortors bocamo m||||ona|ros.
1horo aro now hundrods ot °V|crosott m||||ona|ros'-V|crosott omp|oyoos who workod at tho
company trom |ts bog|nn|ng and havo mado m||||ons on tho|r company stock. Goog|o has croatod
count|oss papor m||||ona|ros to||ow|ng |ts llO and sot ott a m|n|-roa|ostato boom |n tho tony
Ca||torn|a commun|ty ot Athorton. As ono houso buyor to|d 7bo ¼o|| 5troot 1ooroo|, °l startod
aggross|vo|y |ook|ng bocauso l d|dn't want to got caught |n tho Goog|o wavo.' Whon Aust|n-
basod Cy3or-Corp was acqu|rod by Char|os 3chwab |n 2000, moro than 100 stattors-|nc|ud|ng
adm|n|strat|vo ass|stants-bocamo m||||ona|ros.
8 . 1ho Acquirod. 1hoso aro ontropronours or oxocut|vos who so|| tho|r t|rms to anothor
company or buyor tor stock or cash. 0r|von by |ncroasod g|oba| compot|t|on and conso||dat|on,
compan|os havo mado moro than 108,000 acqu|s|t|ons s|nco 100b, tota||ng $11 tr||||on.
4. Nonoy Novora. 1hoso aro tho poop|o who d|roct and |nvost th|s r|vor ot cash and koop a
sharo tor thomso|vos. Wa|| 3troot banks pa|d out moro than $80 b||||on |n bonusos tor 2000, w|th
Go|dman 3achs a|ono do||ng out $10 b||||on to |ts omp|oyoos. |odgo-tund managors now mako
|nvostmont bankors |ook m|dd|o c|ass (or V|dd|o l|ch|stan|) by compar|son, w|th tho top throo
tund managors oarn|ng moro than $1 b||||on |n 2004. 1ho 2b h|ghost-pa|d tund managors oach
mado moro than $180 m||||on |n 2004.
b. 5aIariod Rich. 1ho pay ot U.3. CEOs has ba||oonod to moro than 170 t|mos tho avorago
workor's pay, up trom 40 t|mos |n tho 1070s. Vost ot that jump |n pay |s t|od to stock. |ormor
ExxonVob|| ch|ot loo laymond roco|vod a $00.7 m||||on componsat|on packago and a $08
m||||on pons|on payout |n 200b, basod on oarn|ngs rosu|ts that ana|ysts sa|d woro dr|von moro by
o|| pr|cos than by Vr. laymond's koon managomont sk|||s. Exocut|vos |n 3|||con va||oy's 1b0
b|ggost toch compan|os oxorc|sod moro than $1.84 b||||on |n stock opt|ons |n t|sca| 200b, up 77
porcont trom 2008, accord|ng to componsat|on-rosoarch t|rm Equ||ar. |ank VcK|nno||, lt|zor
lnc.'s tormor cha|rman and CEO, roco|vod a pay packago potont|a||y worth $200 m||||on attor ho
took oar|y rot|romont.
Exocut|vos ot wo||-ostab||shod compan|os can now amass tho k|nd ot woa|th onco rosorvod tor
r|sk-tak|ng ontropronours. Un|tod|oa|th Group awardod a|most $2 b||||on |n stock opt|ons and
componsat|on to cha|rman and CEO W||||am VcGu|ro ovor tho past 1b yoars, a|though ho |ator
camo undor |nvost|gat|on by tho 3ocur|t|os and Exchango Comm|ss|on tor stock-opt|on po||c|os.
3oar 3toarns Cos.' cha|rman and ch|ot oxocut|vo ott|cor 1amos Cayno ho|ds a company stako,
|nc|ud|ng stock and opt|ons, that roachod a va|uo ot $1.02 b||||on |n 2000, wh||o |orbos rocont|y
namod lohman 3ros. ch|ot 0|ck |u|d as a b||||ona|ro.
Vanagors two or throo |ovo|s down tho corporato |addor aro a|so rack|ng up m||||ons |n pay.
1horo woro moro than 4,700 corporato managors who woro pa|d moro than $2 m||||on |ast yoar
|n tota| componsat|on or stock opt|ons. ln tho 3an |ranc|sco aroa a|ono, 041 oxocut|vos oarnod
moro than $1 m||||on |n 200b.
Accord|ng to a survoy by lr|nco 8 Assoc|atos, moro than 00 porcont ot |nd|v|dua|s worth $10
m||||on or moro roportod tho|r sourco ot woa|th as °oqu|ty' or °post-oqu|ty'-moan|ng that stock
was tho|r ma|n, |n|t|a| sourco ot woa|th.
°1hat to||s mo that a |ot ot thoso poop|o startod tho|r own bus|noss |n somo way,' says luss
A|an lr|nco, lr|nco's toundor.
Or thoy s|mp|y run thom. About 28 porcont ot thoso worth $10 m||||on or moro roportod tho|r
sourco ot woa|th as °oxocut|vo,' h|s survoy showod. lnhor|tod woa|th accountod tor on|y 10
porcont ot tho tota|, wh||o co|obr|t|os accountod tor a m|nuscu|o 8 porcont (what thoy |ack |n
numbors thoy mako up tor |n pub||c|ty).
Ot courso, tho sourcos ot woa|th chango as you movo up tho woa|th |addor. 1ho ranks ot
sa|ar|od r|ch and nontoundor oxocut|vos start to th|n as you got to $2b m||||on and abovo-a
stratum dom|natod by ontropronours. lnhor|tod woa|th a|so starts to bocomo moro scarco as you
got abovo $2b m||||on.

|nataµronoura

As|do trom chang|ng tho s|zo and numbor ot today's tortunos, tho r|vor ot monoy has a|so
changod tho tundamonta| woy poop|o bocomo r|ch today. |or most ot tho 20th contury, gott|ng
r|ch was |ncromonta|. lt you workod tor a company, you scr|mpod and savod your way to modost
woa|th. lt you startod a bus|noss, you grow |t storo by storo, truck by truck, |oan by |oan. Vost
bus|noss ownors had to p|ow tho|r prot|ts back |nto tho bus|noss to koop oxpand|ng. lt usua||y
took a ||tot|mo, |t not gonorat|ons, to bu||d a bus|noss ot any s|zo. And thoro woro tow
opportun|t|os to cash out, s|nco morgors and llOs woro raro.
ln l|ch|stan, woa|th |s suddon. 1ho r|vor ot monoy has suporchargod tho procoss ot gott|ng
r|ch. 1ho sa|ar|od woa|thy can now oarn hugo sa|ar|os, w|th bu||t-|n ||qu|d|ty ovonts, go|don
parachutos and othor stock-ro|atod bonusos. |or ontropronours, tho r|vor ot monoy has
acco|oratod tho t|mo |t takos to start, grow and so|| a company. vonturocap|ta| t|rms havo a||owod
ontropronours to |nstant|y ra|so m||||ons tor tho|r start-ups. 3tock markots, hodgo tunds, pr|vato-
oqu|ty t|rms and morgors havo croatod now opportun|t|os to cash out.
A|| that cash, comb|nod w|th now tochno|og|os and g|oba||zat|on, has shortonod tho t|mo |t
takos to |aunch a company and so|| |t tor a ||qu|d|ty ovont. lt has a|so |ncroasod tho va|uo ot
assots, s|nco thoro |s now so much cash |ook|ng tor |nvostmonts. As a rosu|t, tho ontropronour
has g|von way to tho lnstapronour. An lnstapronour can |aunch a company w|th vonturo cap|ta|,
oxpand to a g|oba| markot and cash out through an llO or sa|o-a|| w|th|n a tow yoars or ovon
months. |or lnstapronours, tho pr|mary goa| |sn't to bu||d a bus|noss tor gonorat|ons. 1ho goa| |s
tho °ox|t stratogy' and tho |argost, tastost w|ndta|| poss|b|o.
1oday's lnstapronours can |aunch mu|t|p|o compan|os ovor tho|r ||tot|mos. 1arod lo||s, a
tochno|ogy wh|z trom 3ou|dor, has toundod moro than a dozon compan|os (most toch-ro|atod)
and mado moro than $000 m||||on by so|||ng thom to compot|tors-a|| by tho ago ot 81.
E|octron|c|ntormat|on w|zard 1ott larkor |aunchod throo markotdata compan|os that ho so|d to
1homson ||nanc|a| |n tho m|d-1080s. 1hon ho wont on to |aunch a tourth-CC3l-that ho a|so
so|d to 1homson |n 2004.
°1ochno|ogy, accoss to cap|ta| and ||qu|d|ty opportun|t|os havo a|| croatod tastor cyc|o t|mos
whon |t comos to start|ng your own bus|noss,' says larkor. °Onco you start a bus|noss, and
you'ro |n tho tray, you ottont|mos spot anothor bus|noss opportun|ty and you can do |t aga|n.'
1ho rowards tor so|||ng out havo a|so gotton |argor. W|th so much monoy soarch|ng tor
|nvostmont roturns, tho pr|cos ot va|uab|o assots havo soarod. lran|an |mm|grants lau| Vorago
and h|s brothor 0av|d |aunchod |ot lockots-tho to||-wrappod trozon snacks-|n tho oar|y
1000s and so|d tho bus|noss to lost|o |n 2002 tor $2.0 b||||on. |a|m 3aban, a mod|a magnato,
morgod h|s cartoon channo| w|th |ox |n 100b, thon pockotod moro than $1.7 b||||on whon ho so|d
|t to 0|snoy |n 2001. l|quor magnato 3|dnoy |rank croatod a now brand ot vodka, ca||od Groy
Gooso, and so|d |t to 3acard| tor $2.8 b||||on.

Othor Factora

Ot courso, tho r|vor ot monoy and lnstapronours aron't tho on|y roasons wo havo so many now
r|ch poop|o. Govornmont po||cy has a|so p|ayod a b|g ro|o. 1ho dr|vo toward pr|vat|zat|on,
dorogu|at|on and troo markots, wh|ch took ott undor lona|d loagan and cont|nuod through tho
adm|n|strat|ons ot 3||| C||nton and Goorgo W. 3ush, has boostod tho s|zo and numbor ot
porsona| tortunos. Vonotary and t|sca| po||cy has a|so tavorod r|sk-tak|ng and hoavy borrow|ng
by both consumors and compan|os.
1ax po||cy ovor tho past 40 yoars has sh|ttod hoav||y |n tavor ot tho woa|thy, a||ow|ng thom to
koop moro ot tho|r |ncomos and ||qu|d|ty ovonts. 1ho top todora| |ncomo tax rato has ta||on trom
01 porcont |n 1008 to 8b porcont tor 2007. 1ho top tax rato on |ong-torm cap|ta| ga|ns-prot|ts
trom so|||ng stocks, bonds and othor t|nanc|a| assots-has ta||on to 1b porcont trom 20 porcont
ovor tho past t|vo yoars. 1ho top rato on most d|v|donds now |s 1b porcont, down trom 88.0
porcont |n 2002.
1ho 1ax lo||cy Contor ost|matos that 80 porcont ot tho tax sav|ngs trom tho 3ush tax cuts wont
to tho top 10 porcont ot taxpayors. A|most ono-t|tth ot tho bonot|ts wont to tho top ono-tonth ot 1
porcont. Ettorts by lopub||cans, oncouragod by sovora| O|d Vonoy tam|||os, to ropoa| tho ostato
tax wou|d bo a turthor boon tor tho r|ch, s|nco tho tax app||os on|y to ostatos |argor than $2 m||||on.
1ho 1h|rd Wavo has a|so had |ts sharo ot traudu|ont woa|th croat|on, or what |arvard protossor
W||||am Z. l|p|oy rotorrod to |n tho loar|ng 1wont|os as °prost|d|g|tat|on, doub|o-shutt||ng, honoy-
tug||ng, hornswogg||ng and sku|duggory.' 1ho scanda|s at Enron, Wor|dcom, Ado|ph|a
Commun|cat|ons and 1yco uncovorod systom|c abusos |n tho way compan|os postod |mpross|vo
oarn|ngs and sto||ar pay tor tho|r ch|ots. 1ho rocont opt|ons-t|m|ng scanda|-|n wh|ch moro than
100 compan|os aro undor scrut|ny tor tho|r stock awards to oxocut|vos who aro g|v|ng thom
b|ggor prot|ts-shows that corporato oxocut|vos p|ayod by d|ttoront ru|os trom othor |nvostors
whon |t camo to tho|r stock awards.
A|| thoso tactors-tho r|vor ot monoy, now tochno|og|os, g|oba||zat|on and markot-tr|ond|y
govornmonts-havo como togothor to croato a now gonorat|on ot r|ch poop|o. 1hoy havo mado
moro monoy, moro qu|ck|y, trom moro sourcos than any prov|ous gonorat|on ot woa|th. As a
rosu|t, l|ch|stan|s havo rodot|nod tho way poop|o bocomo woa|thy |n Amor|ca. 1hoy'vo a|so
rodot|nod tho vory moan|ng ot tho word °r|ch.'

Eow Nuch |a °Rich"?

1o mako |t |nto tho top 1 porcont ot Amor|cans, as moasurod by not worth, you nood a not worth
ot $0 m||||on. 1hat's tw|co tho |ovo| roqu|rod |n 100b. 1o got on tho |orbos 400 ||st ot r|chost
Amor|cans, you havo to bo a b||||ona|ro. 1ho ontry pr|co was on|y $418 m||||on |n 100b.
|or agos, tho torm °m||||ona|ro' was synonymous w|th °r|ch.' 1oday, $1 m||||on baro|y gots you a
two-bodroom |n Vanhattan, |ot a|ono a p|aco |n tho |amptons. 1ho woa|th boom has croatod
such a hugo d|sconnoct botwoon l|ch|stan|s and tho rost ot tho country that thoy now havo
dramat|ca||y d|ttoront dot|n|t|ons ot tho torm °r|ch.'
Vost Amor|cans th|nk $1 m||||on wou|d mako thom r|ch. |ow o|so to oxp|a|n a|| thoso
bostso|||ng books such as 7bo lostoot Vl||looolro and 7bo Vl||looolro Noxt Loor and watch|ng
1v shows ||ko low to Bo o Vl||looolro and 1oo Vl||looolro?
Yot |n l|ch|stan, $1 m||||on just gots you |n tho door. 3o|ng a m||||ona|ro (or a m||||ona|ro
housoho|d) has bocomo a|most common, s|nco thoro aro now moro than n|no m||||on ot thom.
Chock |u|| O'luts cottoo, onco tho b|uo-co||ar tavor|to |n low York, usod to a|r a j|ng|o that ondod
w|th tho ||no: °3ottor cottoo a m||||ona|ro's monoy can't buy.' 1ho now j|ng|o onds w|th tho ||no:
°3ottor cottoo a b||||ona|ro's monoy can't buy.'
Woa|th, |n short, has boon dot|nod up bocauso ot a|| thoso l|ch|stan|s. 3o what's tho now
cutott?
A study by llC Adv|sors, a woa|th-managomont t|rm, shows a surpr|s|ng pattorn among
l|ch|stan|s whon thoy'ro askod how much monoy wou|d mako thom socuro. 1hoy a|most a|ways
answor that tho amount thoy nood to too| socuro |s twlco tho|r curront |ovo| ot not worth or |ncomo.
1hoso worth $b00,000 to $1 m||||on sa|d thoy noodod $2.4 m||||on. 1hoso worth $1 m||||on to
$1.40 m||||on sa|d $8 m||||on. And thoso w|th $10 m||||on or moro sa|d $18 m||||on. ln othor words,
poop|o's dot|n|t|on ot °r|ch' |s subjoct|vo and |s usua||y tw|co tho|r curront not worth.
1horo aro othor, moro objoct|vo bonchmarks tor what counts as °r|ch' today. 1o got |nto most
pr|vato banks and trust compan|os today you nood at |oast $10 m||||on |n |nvost|b|o assots. 3omo
banks, ||ko 1.l. Vorgan, roqu|ro m|n|mums ot $2b m||||on. Evon thon, you may not got vll
troatmont, at C|t|group lr|vato 3ank, on|y c||onts w|th $100 m||||on or moro got |nto |ts lr|vato
Cap|ta| lartnor's Group, wh|ch ottors moro |ucrat|vo doa|s and bottor |nvostmonts. lot's say tor
now, howovor, that $10 m||||on |s tho ontry pr|co tor bo|ng r|ch |n tho oyos ot thoso who manago
monoy.
Anothor bonchmark |s |nvostmont roturns. |or many, tho dot|n|t|on ot °r|ch' moans tho ab|||ty to
||vo comtortab|y ott tho |ncomo trom your |nvostmonts w|thout d|pp|ng |nto your actua| tortuno. 3o
|t you havo $1 m||||on, and you mako b porcont a yoar trom your |nvostmonts, you wou|d oarn
$b0,000 a yoar. Vost t|nanc|a| adv|sors say that today's r|ch nood |ncomos ot at |oast $b00,000
to $1 m||||on to ||vo an upsca|o ||tosty|o, what w|th pr|vato schoo|, a vacat|on homo, ma|ds,
nann|os and tho ||ko. 1hat wou|d roqu|ro a tortuno ot at |oast $10 m||||on, or probab|y moro ||ko
$20 m||||on. lt's not hugo, by today's standards. 3ut |t's onough to |oad a comtortab|o ||to |n lowor
or V|dd|o l|ch|stan. (lator, wo'|| soo oxact|y how much today's r|ch spond ovory yoar.)
|or tho purposos ot th|s book, |ot's say that truo woa|th bog|ns at somowhoro around $10
m||||on. low, |ot's moot somo l|ch|stan|s who havo mado-and |ost-tar groator amounts.


8

NAK|NC |1

Ed BazInet, KIng o| the CeramIc vIllage

Ono ot tho dot|n|ng charactor|st|cs ot l|ch|stan |s |ts d|vors|ty. A|most anyono, anywhoro can
mako a tortuno today w|th tho r|ght |doa. 1ho r|vor ot cash t|ow|ng around tho wor|d |s so |argo
that |t's sp|||od |nto aroas ot tho oconomy that most ot us havo novor ovon hoard ot. |or a|| tho ta|k
ot t|ashy dot-commors, co|obr|t|os and Wa|| 3trootors, many ot today's l|ch|stan|s mado tho|r
monoy trom arcano, oddba|| products.
1ako 3ydo|| V|||or. 1ho most prom|nont soc|a||to |n la|m 3oach, Vs. V|||or |s a C|ovo|and
nat|vo who ran a ha|r sa|on w|th hor husband unt|| sho camo up w|th a now ||no ot shampoo ca||od
Vatr|x Essont|a|s. 3ho so|d tho bus|noss to 3r|sto|-Vyors 3qu|bb tor $1 b||||on and now ||vos |n a
80,000-squaro-toot homo w|th |ts own |co-croam par|or.
1amos lopr|no, a 0onvor-basod chooso makor, ho|pod croato a now k|nd ot mozzaro||a
chooso that had tho |doa| mo|t|ng proport|os tor p|zza, mak|ng |t tho top so||or to l|zza |ut,
0om|no's and othor b|g cha|ns. low ho's worth moro than $1 b||||on, and ho just mado tho
|orbos ||st.
Ca||torn|an ontropronour Auro||o |. 3arroto lll mado tons ot m||||ons trom a croat|on ho ca||od
tho 0og|oo-an |g|oo-shapod doghouso-attor ho so|d tho bus|noss to an |nvostmont t|rm. lau|
Chorr|o, a candy mavon, ho|pod orchostrato a comoback tor candy makor 0ubb|o 3ubb|o and
so|d |t to 1oots|o lo|| lndustr|os tor noar|y $200 m||||on. |ood tycoon Chr|stophor Go|dsbury
mado moro than $1 b||||on trom sa|sa, attor so|||ng tho laco sa|sa bus|noss to Campbo|| 3oup.
l|ch|stan |s t|||od w|th mastors ot tho bana| who havo turnod ovoryday bus|nossos |nto pr|zod
|nvostmonts. Countod among today's o||to aro tho p|onoor ot pub||c storago (3rad|oy Wayno
|ughos), tho raja ot root|ng supp||os (1ohn Vonard) and tho potontato ot potatoos (1. l. 3|mp|ot).
1hoy |nc|udo, qu|to ||tora||y, tho butchors (||ko Arkansas's b||||ona|ro 1yson tam||y), bakors (Oh|o's
3chwobo| tam||y) and cand|ost|ck makors (V|ko K|ttrodgo ot Yankoo Cand|o, worth sovora|
hundrod m||||on).
|ugo woa|th can a|so como |n sma|| packagos. Wh||o most poop|o havo hoard ot 1y Warnor-
tho mu|t|b||||ona|ro croator ot 3oan|o 3ab|os-tow poop|o havo ovor hoard ot tho oqua||y
surpr|s|ng tortuno mado by a to|ksy m|dwostornor namod Ed 3az|not.

|t 1akoa a ViIIago

Ed 3az|not |s ono ot tho most who|osomo bus|nossmon you cou|d moot. |o's a stout, sott-
spokon Catho||c trom rura| V|nnosota w|th a wh|to board, sm|||ng oyos and round g|assos. ln h|s
khak|s, |oators and t|anno| sh|rts, Ed |ooks ||ko a co||ogo protossor or cornor bookstoro ownor. At
08, ho sponds most ot h|s days shutt||ng around h|s Vanhattan ponthouso, co||oct|ng art, runn|ng
h|s char|ty and dot|ng ovor h|s two pr|zod oc|cats, l|co|as and lathan, who s|oop undor a hoat
|amp by h|s dosk.
Ed 3az|not |s worth moro than $100 m||||on. And whon poop|o ask h|m how ho mado |t, ho just
says, °lmports.'
°l'm not suro poop|o wou|d roa||y undorstand,' ho says. °And |t thoy d|d, thoy m|ght not bo||ovo
mo.'
1hat's bocauso 3az|not mado h|s tortuno trom m|n|aturo coram|c v|||agos.
lt a|| startod at a p|ant nursory |n Edon lra|r|o, V|nnosota. 3az|not grow up |n a work|ng-c|ass
Gorman tam||y, and h|s tathor workod tor tho stato wator dopartmont. |o wont to a str|ct Catho||c
schoo| and thon to tho Un|vors|ty ot V|nnosota, pursu|ng h|s |ntorost |n arts and photography. ln
tho m|dd|o ot h|s sophomoro yoar, ho droppod out.
°l was moro |ntorostod |n work|ng and bus|noss,' ho says.
|o got a job at 3achman's, a g|ttwaro and p|ant shop, dos|gn|ng t|owor arrangomonts. |o
workod h|s way up to tho g|tt dopartmont, and |ator startod travo||ng to low York and Europo to
buy up un|quo sa|ad bow|s, d|nnor trays and docorat|vo t|gur|nos. Othor rota||ors ||kod h|s
products so much that ho startod so|||ng who|osa|o. ||s t|rst b|g h|ts woro p|ant ho|dors trom lta|y.
°lt roa||y c||ckod w|th tho who|o |ndoor-p|ant boom ot tho '70s,' ho says. °Ono ot my |nnovat|ons
was putt|ng tho ho|dors on whoo|s so poop|o cou|d movo thom around.'
ln 1071, ho got a v|s|t trom an o|dor|y 3t. lou|s-basod pottor who so|d vasos and jars trom tho
back ot h|s truck. At tho ond ot h|s sa|os p|tch, tho pottor showod Ed a spoc|a| croat|on-a
cook|o jar shapod ||ko a ||tt|o v|ctor|an houso. 1ho houso was hand-pa|ntod |n |ntr|cato co|ors
and had t|ny putts ot wh|to snow on tho root, mado w|th a spoc|a| g|azo.
Ed |ovod |t. 1ho p|oco was so dota||od that |t transportod h|m to anothor wor|d.
°lt was just a ||tt|o p|oco ot coram|c, but |t was vory oxc|t|ng. lt was nosta|g|c.'
3az|not askod tho pottor |t ho cou|d mako somo changos, ||ko cutt|ng ho|os |n tho w|ndows and
|nsta|||ng a ||ght so |t wou|d g|ow ||ko a roa| houso at n|ght.
1ho pottor trownod.
°1hon |t wou|dn't bo a cook|o jar,' ho sa|d.
°Wo||, wo cou|d ca|| |t a n|ght-||ght,' 3az|not sa|d.
1ho pottor agrood to g|vo |t a try. |o and Ed mado s|x othor vors|ons ot tho v|ctor|an n|ght-
||ghts and put thom on tho 3achman's sa|os sho|t just botoro Chr|stmas. 1hoy pr|cod thom at a
hotty $1b0 to $200 oach, th|nk|ng thoy wou|d novor so||. 1hoy so|d out |nstant|y.
Ed roa||zod ho was on to somoth|ng b|g. 3ut ho know tho 3t. lou|s pottor, w|th h|s tad|ng hoa|th
and s|ng|o k||n, wou|dn't bo ab|o to koop up w|th b|ggor ordors. 3o Ed packod h|s bags and t|ow
to 1a|wan.
ln tho oar|y 1070s, g|oba| sourc|ng was st||| |n |ts |ntancy. ||nd|ng a coram|cs tactory |n 1a|wan
that cou|d mako hand-pa|ntod v|ctor|an-houso n|ght-||ghts w|th putts ot snow wasn't oasy.
Evontua||y, ho tound a tactory that was w||||ng to g|vo |t a try, and ho spont tho noxt throo yoars
ovorsoo|ng product|on. |o spont hours and hours on tho p|ant t|oor, toach|ng tho tactory workors
how to pa|nt tho t|ny shuttors and gott|ng tho root sh|ng|os just so.
°l'm a m|cromanagor,' Ed says. °Whon tho workors hoard mo com|ng, thoy wou|d a|| try to
h|do.'
3y tho m|d-1070s, ho was so|||ng thousands ot t|ny housos a yoar. |o tormod a now company
ca||od 0opartmont b0, wh|ch had boon tho |n-houso namo tor 3achman's g|ttwaro dopartmont.
Ed ownod 20 porcont ot tho company, and tho 3achman tam||y ownod tho rost.
Ed camo up w|th a novo| |doa. lnstoad ot gott|ng poop|o to buy ono or two v|ctor|an n|ght-
||ghts, why not got thom to buy 10 or 12? loop|o cou|d buy ont|ro v|||agos ot n|ght||ghts.
°1ho |nnovat|on was turn|ng thoso housos |nto a scono, a roa| v|||ago,' ho sa|d.
Ed d|d most ot tho dos|gns h|mso|t. |o croatod m|n|aturo coram|c t|ro stat|ons, post ott|cos,
schoo|s, tra|n stat|ons and storos. |o bu||t t|ny pot storos, barborshops, car doa|orsh|ps, d|nors,
toy storos and ovon a snow-covorod tra||or park. |o d|d ||cons|ng doa|s and mado a Coca-Co|a
bott||ng p|ant and 3udwo|sor browory. Ono ot h|s tavor|tos was tho l|l stad|um. °1hat was
comp||catod, and protty tough to bu||d,' ho says.
°Wo d|dn't do tunora| homos or comotor|os. 3ut wo d|d havo churchos, ovory k|nd ot church.
Wo ovon mado a synagoguo, but that d|dn't so|| too wo||.'
A|| tho bu||d|ngs had a cozy, low Eng|and too|, ||ko somoth|ng lorman lockwo|| wou|d mako,
|t ho had mado coram|c v|||agos. 3az|not ca||od h|s t|rst sor|os tho 3now v|||ago. 1hat was
to||owod by tho 0|ckons v|||ago (modo|od attor 10th-contury 3r|ta|n), tho Chr|stmas |n tho C|ty
sor|os, and tho lorth lo|o sor|os, wh|ch |nc|udod tho popu|ar E|t|n 3now-Cono |ouso and
lo|ndoor |||ght 3choo|.
An ont|ro now |ndustry was born. 0opartmont b0 soon had |ts own group ot tanat|ca| co||octors,
who sot up tho|r v|||agos as Chr|stmas d|sp|ays. 3omo customors t|||od up g|ant tab|os and ont|ro
rooms ot tho|r homos w|th 0opartmont b0 sconos, roqu|r|ng tho company to dos|gn spoc|a||zod
o|octr|ca| str|ps and |nsta||at|on oqu|pmont. Vany ot tho customors ||vod |n tho suburbs ot ||or|da
and Ca||torn|a-snowb|rds who m|ssod tho w|ntor wondor|ands and sma|| towns ot tho|r youth.
Yot thoy woro a|| dovotod 0opartmont b0 customors. 1hoy bocamo ||ko 3tar 1rok tans, ho|d|ng
tho|r own convont|ons and trado shows, and anx|ous|y awa|t|ng nows on tho |atost v|||ago
dos|gns.
°lt wasn't just a mom th|ng, bocauso tho dad had to got |nvo|vod to bu||d tho d|sp|ay and tho
k|ds wou|d oach got to p|ck out a now bu||d|ng ovory Chr|stmas,' Ed sa|d. °3o |t roa||y sproad. lt
bocamo a trad|t|on w|th many ot thoso tam|||os.'
3a|os soarod trom $2b0,000 tho t|rst yoar to moro than $100 m||||on by tho 1080s. Ed ran
a|most ovory aspoct ot tho bus|noss, ovon attor |t grow to 120 omp|oyoos. |o t|ow to 1a|wan to
ovorsoo manutactur|ng, so|d to rota||ors, nogot|atod ||cons|ng doa|s and ovorsaw a|| tho product
dos|gn. Evory |r|day n|ght, ho took homo stacks ot |ottors trom customors oxpross|ng tho|r
protound joy at roco|v|ng tho |atost 0|ckons v|||ago 3ob Cratch|t Cottago or lorth lo|o Yummy
Gummy Gumdrop |actory.
°lt was ||ko thoso poop|o woro hav|ng omot|ona| oxpor|oncos ovor a t|ny coram|c bu||d|ng,' Ed
says. °lt was amaz|ng. l myso|t cou|dn't roa||y undorstand |t.'
3y tho oar|y 1000s, Ed was mak|ng moro than $7b0,000 a yoar, and ho mado anothor $1
m||||on trom a soparato transact|on w|th tho company. 1ho monoy, howovor, wasn't tu|t||||ng.
°l know |t's hard tor somo poop|o to undorstand,' ho says. °3ut l'm not monoy mot|vatod. |or
mo |t was a|| about my product ||no and hav|ng succoss w|th that product that was |n h|gh
domand. lt was about so|||ng to tho r|ght storos. l'm a morchant at hoart.'
3y tho oar|y 1000s, 3az|not was grow|ng t|rod ot |t a||. |o was work|ng 18-hour days, sovon
days a wook, and spont most ot h|s ||to on a|rp|anos. |o ovon grow t|rod ot tho customors. Attor
road|ng thousands ot g|ow|ng tr|butos to 0opartmont b0, ho had a spoc|a| rubbor stamp mado
w|th tho words °Got a l|to.' Ed wou|d stamp tho words on tho most ottus|vo |ottors botoro sond|ng
thom to customor sorv|co. 1ho phraso bocamo h|s ha||mark at tho company, and ho startod
rotorr|ng to somo ot h|s customors as tho °Got a l|to crowd.'
3az|not and tho 3achmans doc|dod to so||. 1hoy d|dn't want to go pub||c, s|nco Ed hatod a|| tho
badgor|ng and socond-guoss|ng trom sharoho|dors. 3o thoy shoppod tho t|rm around Wa|| 3troot
and ovontua||y sott|od on a doa| w|th tho buyout shop |orstmann l|tt|o. 1hoodoro °1oddy'
|orstmann, tho tamous|y co|ttod, outspokon buyout k|ng, was bottor known tor co||oct|ng
supormodo|s than tor m|n|aturo coram|cs. Yot ho know good cash t|ow whon ho saw |t, and
0opartmont b0 was sp|nn|ng ott p||os ot cash, w|th $172 m||||on |n annua| sa|os. |orstmann l|tt|o
bought tho bus|noss tor about $270 m||||on. 3az|not nottod moro than $b0 m||||on trom h|s stako
and othor cons|dorat|ons and ro|nvostod a port|on back |nto tho bus|noss.
|o agrood to stay on as CEO, s|nco |orstmann l|tt|o assurod h|m thoy wou|dn't tako tho
company pub||c anyt|mo soon. loss than a yoar |ator, thoy to|d 3az|not thoy woro tak|ng |t pub||c.
Ed wont on tho road w|th Go|dman 3achs to p|tch tho company to |nvostors, a job ho droadod.
|o had to answor ond|oss quost|ons about h|s products and bus|noss, wh|ch no ono outs|do tho
°Got a l|to crowd' cou|d roa||y undorstand. 3|g pons|on tunds, monoy managors and |nvostors
had a hard t|mo undorstand|ng how m|n|aturo coram|c v|||agos wou|d bo tho noxt hot growth
|ndustry.
lau| lautor, an ana|yst w|th lr|nc|pa| ||nanc|a| 3ocur|t|os, sa|d ono |nst|tut|ona| |nvostor
askod, °|ow many tat o|d |ad|os |n V||waukoo woro thoro to buy [tho housos|?' 3az|not roca||s a
20-somoth|ng portto||o managor |n 0onvor ask|ng |t ho was so|||ng °toy housos.' °l was roady to
roach across tho tab|o and smack h|m.'
1ho ottor|ng was a hugo succoss. Ed nottod anothor $100 m||||on |n stock sa|os. 1h|s t|mo, ho
wantod out. 1ho ottor|ng had sappod h|s onthus|asm tor tho bus|noss, and ho was st||| spond|ng
most ot h|s t|mo on a|rp|anos. 1ho t|na| straw was a |ong t||ght trom |awa|| to V|nnosota |n 1002.
Ed was a cha|n-smokor and tho |awa|| t||ght markod tho t|rst day ot tho smok|ng ban on a|rcratt.
°l askod tho t||ght attondant |n t|rst c|ass what sho wou|d do |t l ||t up and sho sa|d tho p||ot wou|d
touch down at tho noarost a|rport and havo mo arrostod,' ho sa|d. °l doc|dod not to tost thom.'
Ed to|d |orstmann ho was qu|tt|ng. Attor bogg|ng and p|oad|ng, thoy mado h|m an ottor ho
cou|dn't rotuso-h|s own pr|vato jot. |orstmann ownod Gu|tstroam and, dosp|to a |ong wa|t|ng ||st
tor jots, thoy trood up a G2 tormor|y ownod by tho Wr|g|oy gum tam||y and so|d |t to 0opartmont
b0 tor Ed to uso.
°lt was vory c|ovor. 1hoy cou|d havo ottorod mo a m||||on-do||ar ra|so and l wou|d havo sa|d no.
3ut a jot? Wow. Evory t|mo l stoppod onto tho p|ano l to|t ||ko a k|d wa|k|ng |nto a candy storo. l
novor qu|to got ovor |t.'
Vost|y bocauso ot tho jot, Ed stayod on anothor t|vo yoars, dr|v|ng sa|os to moro than $240
m||||on a yoar. Whon tho ott|co po||t|cs and boardroom dramas got to bo too much, ho t|na||y
rot|rod |n 1007.

Cotting a Lito

Whon you wa|k |nto Ed's Vanhattan ponthouso today, you won't t|nd any s|gns ot 0opartmont b0.
1horo aro no snow v|||agos on tho mant|o, or luc|to °doa| troph|os' on h|s dosk commomorat|ng
h|s convort|b|o-bond ottor|ngs, as w|th most ontropronours. ||s on|y °coram|c co||oct|on' to spoak
ot |s a cab|not tu|| ot |ronch ant|quo modo|s ot human hoads, onco usod tor mod|ca| stud|os.
°l just ||kod tho way thoy |ookod,' Ed sm||os. °l t|nd thom art|st|c.'
lndood, 3az|not's 10,000-squaro-toot g|ass and chromo pa|aco |ooks moro ||ko a w|ng ot tho
Vusoum ot Vodorn Art than a homo, w|th a g|ant Gorhard l|chtor pa|nt|ng, a bu|bous chromo
scu|pturo by An|sh Kapoor and a 700-p|oco chando||or by g|ass art|st 0a|o Ch|hu|y. A|| tho rooms
aro u|tram|n|ma||st, w|th g|oam|ng wh|to surtacos, t|atscroon 1vs and dark wood turn|turo.
°l had a roa|ostato agont |n horo tho othor day |ook|ng ovor tho p|aco and ho countod 18
p|asma scroons |n tho houso,' ho sa|d. °l d|dn't bo||ovo |t, but thon l countod, and ho was r|ght. l
d|dn't ovon roa||zo.'
1ho houso conta|ns on|y ono phys|ca| rom|ndor ot h|s o|d ||to. |ang|ng on a wa|| noxt to h|s
socrotary |s a b|uo noon s|gn that roads °Got a ||to!' lt was modo|od attor h|s o|d rubbor stamp.
Yot gott|ng a ||to attor mak|ng so much woa|th hasn't boon oasy tor 3az|not. l|ko most
l|ch|stan|s, ho dovotod h|s ||to to bu||d|ng h|s company, and whon ho |ott, ho a|so |ott boh|nd a
b|g part ot h|s |dont|ty. |o |s add|ctod to projocts-and onco thoy'ro dono, ho otton |osos |ntorost.
°lt's my porsona||ty,' ho says. °l got consumod by projocts.'
1ako h|s ponthouso. Ed spont throo yoars and m||||ons ot do||ars ronovat|ng tho t|vo-story
showp|aco, wh|ch |s ono ot tho most o|aborato |n downtown Vanhattan. |o ovorsaw tho
construct|on ot ovory mo|d|ng, w|ndow and t|xturo. |o had tho sta|rs-a sw|r||ng towor ot sta|n|oss
stoo|, g|ass and vonot|an porco|a|n-hand-carvod by |oca| art|sans. |o comm|ss|onod spoc|a|
artworks, ||ko tho 80-toot-ta|| lE0 scu|pturo by tho art|st 1onny |o|zor, wh|ch hangs noar tho
sta|rs.
low that tho houso |s t|n|shod, howovor, Ed soos tho ponthouso as ono b|g hass|o. |o's su|ng
h|s tormor contractor and now sponds hours a day on tho phono w|th |awyors. |o's contoundod
by tho homo's stato-ot-tho-art ||ght|ng and socur|ty systom, wh|ch |s oporatod by sovora| romoto
computor sorvors. Ono attornoon, ho shows mo a t|ny scratch on tho g|ass sta|rwo|| that was |ott
by ono ot tho |nsta||ors.
°Vost poop|o wou|dn't not|co |t,' ho says. °3ut l soo |t and |t dr|vos mo crazy.'
1horo a|so aro prob|oms w|th tho spaco |tso|t. 3|mp|y put, Ed says |t's too b|g. |o ||vos thoro
w|th h|s partnor-a 3o|g|an photographor-and tho|r two cats. 1hoy raro|y uso many ot tho
rooms.
°lt's not comtortab|o,' ho says. °3omot|mos you don't know unt|| you'ro ||v|ng |n a spaco. 3ut th|s
too|s too b|g tor two poop|o. lt's groat whon you havo poop|o ovor tor a party. 3ut upsta|rs |t too|s
||ko a b|g t|shbow| w|th just a tow poop|o. 1horo aro no cozy aroas.'
3o Ed has put tho houso on tho markot through 3othoby's. 1ho ask|ng pr|co: $28.b m||||on.
1ho sa|o |s part ot what Ed hopos w||| bo a now, s|mp|or phaso ot h|s ||to. Attor accumu|at|ng
so much woa|th, and so many th|ngs, ho's doc|dod to downs|zo. |o's so|||ng ott h|s boach houso
|n luorto va||arta, a|ong w|th an ant|quo b|w|ng p|ano that ho kopt at h|s Vontana ranch to g|vo
aor|a| tours to tr|onds and tam||y.
|o's t|rod ot a|| tho b|||s, |awsu|ts, nogot|at|ons and upkoop that go a|ong w|th hav|ng mu|t|p|o
homos and projocts. Evory |r|day, tor |nstanco, ho sorts through °tho p||o,' a stack ot ma|| that's
sovora| |nchos h|gh, most|y so||c|tat|ons and |nv|tat|ons to tund-ra|sors and bonot|ts.
°lart ot my trustrat|on |s that l too| bus|or now than l'vo ovor boon. 3ut l don't havo tho rosu|ts or
rowards ||ko l usod to.' |o adds, °ln tho ond l mado a |ot ot monoy. 3ut thoro aro two s|dos to tho
co|n, good and bad.'
3o attor so|||ng h|s low York apartmont, Ed p|ans to movo |nto a sma||or p|aco. |o hopos to
spond part ot tho yoar at h|s ranch |n Vontana, gott|ng hoa|thy, ro|ax|ng and try|ng to onjoy ||to
moro. And ho p|ans to tocus moro and moro on h|s toundat|on, wh|ch supports tho onv|ronmont,
ch||dron's cr|s|s contors, scho|arsh|ps and othor causos |n V|nnosota.
°l havo troub|o ro|ax|ng,' ho says. °3ut l'm |oarn|ng.'
1horo |s ono |uxury, howovor, that ho cou|dn't ||vo w|thout: tho jot. Attor |oav|ng 0opartmont b0,
ho bought part ownorsh|p |n a Gu|tstroam, wh|ch ho usod to travo| to Europo, Atr|ca and h|s ranch
on Vontana. |o doc|dod to so|| |t bocauso ho startod too||ng gu||ty about tho oxponso.
°Vaybo |t's my m|dwostorn porsona||ty. l just kopt th|nk|ng that was monoy l cou|d bo spond|ng
tor k|ds' char|ty or somoth|ng o|so.'
ln 200b, attor ondur|ng tho hass|os ot commorc|a| t||ghts and tho oxponso ot chartors, ho
wantod tho p|ano back. 3o ho rocont|y purchasod anothor Gu|tstroam w|th a partnor.
°lt's st||| hard to bo||ovo,' ho says, shak|ng h|s hoad. °Vo . . . own|ng a jot.'
3AZllE1 |sn't a|ono. Evon as today's l|ch|stan|s mako moro monoy than thoy cou|d havo ovor
|mag|nod, and buy a|| tho baub|os thoy cou|d want, thoy'ro hav|ng a hard t|mo onjoy|ng tho|r
succoss. 1hoy'ro too young to rot|ro, too dr|von to ro|ax and too concornod w|th koop|ng up w|th
tho noxt guy to ||vo tho stor|od ||to ot |o|suro. ln today's l|ch|stan, ovon b||||ona|ros aro raro|y
contont.


4

L|V|NC |1

1Im BlIxseth

1ust botoro dawn, 1|m 3||xsoth |s stand|ng on tho dock ot h|s 1b7-toot yacht |n h|s bathrobo.
°Whoro tho ho|| am l?' ho asks, rubb|ng h|s oyos, somowhoro ott tho coast ot Vox|co. °l'vo
boon wak|ng up |n a d|ttoront p|aco ovory day th|s wook. l too| ||ko a vagabond.'
°vagabond' |s a ro|at|vo torm whon you'ro travo||ng w|th 1|m 3||xsoth. On 3unday morn|ng, ho
woko up |n h|s 8,000-squaro-toot cab|n at tho Yo||owstono C|ub, a pr|vato go|t-and-sk| c|ub that
3||xsoth toundod |n tho Vontana lock|os. 1ho noxt day ho woko up at a |uxury |odgo on a 8,200-
acro t|sh|ng ranch noar Cody, Wyom|ng.
Vonday n|ght, |t was back homo, °homo' a|so bo|ng a ro|at|vo torm. 3||xsoth and h|s w|to,
Edra, ||vo on a 240-acro sproad noar la|m 3pr|ngs, Ca||torn|a, that makos most t|vo-star rosorts
|ook puny by compar|son. 1ho ostato, ca||od lorcup|no Crook, has a 80,000-squaro-toot
mans|on, 12 guost cottagos-oach tho s|zo ot a s|ng|o-tam||y homo-a tu||-sorv|co spa, two
sw|mm|ng poo|s, an amph|thoator and an undorground ba||room. |or tho|r backyard, tho
3||xsoths bu||t a pr|vato, 10-ho|o go|t courso (w|th c|ubhouso) that go|t oxports rank as ono ot tho
bost |n tho country. 1ho ostato grounds aro carpotod w|th omora|dgroon grass, tounta|ns,
burb||ng stroams, watorta||s and moro than a m||||on oxot|c t|owors-a|| tho moro romarkab|o tor
bo|ng |n tho m|dd|o ot tho dosort.
On 1uosday morn|ng, 1|m and Edra boardod tho|r Gu|tstroam bb0 and t|ow to Vanzanoo,
Vox|co, just south ot luorto va||arta. 1horo, thoy jumpod on tho|r yacht and motorod to
1amar|ndo-a soc|udod jung|o rosort that 1|m rocont|y purchasod. 1wo days |ator, |t was ott to
1ah|t| to anothor 3||xsoth rosort p|ayground.
°lot a bad ||to,' ho says, s|pp|ng chardonnay on h|s yacht dur|ng sunsot. °l w|sh my dad cou|d
on|y soo mo now.'
On |ts taco, 1|m 3||xsoth's ||to |ooks ||ko ono |ong, |uxur|ous vacat|on. And |n somo ways, |t |s.
Attor mak|ng m||||ons |n tho t|mbor bus|noss, 3||xsoth rot|rod at tho ago ot 40 and tr|od ||v|ng tho
Good l|to. 3ut whon h|s p|ans tor a tam||y rotroat |n Vontana caught on w|th tr|onds, ho |aunchod
a socond caroor bu||d|ng h|gh-ond rosorts. low ho's a b||||ona|ro, w|th h|s Yo||owstono C|ub and
Yo||owstono C|ub Wor|d bocom|ng two ot tho most popu|ar p|aygrounds tor tho suporr|ch.
And that's just a s|do bus|noss. 3||xsoth buys and so||s |and, and owns moro than b00,000
acros ot proporty |n tho Un|tod 3tatos and Vox|co. |o day-trados stocks, tunds start-up
compan|os, runs h|s own char|tab|o toundat|on, dovo|ops roa| ostato, oporatos h|s own mus|c
|abo| and wr|tos pop songs.
3||xsoth |s so busy that ho tonds to torgot that ho ott|c|a||y °rot|rod' moro than 1b yoars ago.
°As you can to||,' 1|m says, rac|ng around h|s go|t courso ono attornoon |n h|s h|gh-spood cart,
°l havo troub|o s|tt|ng st|||.'

1ho Now Loiauro CIaaa

1|m 3||xsoth |s a |oad|ng mombor ot tho now ovorach|ov|ng ovorc|ass. l|ko Ed 3az|not and many
ot today's l|ch|stan|s, 3||xsoth has a|| tho trapp|ngs ot tho ||to ot |o|suro-mu|t|p|o vacat|on
homos, p|anos, boats and cars. And ho's got onough monoy to |ast gonorat|ons. Yot 1|m has ||tt|o
t|mo to onjoy |t.
|o's a|ways bu||d|ng a now homo, |aunch|ng now compan|os and skotch|ng out now bus|noss
p|ans on h|s d|nnor napk|ns. |o's a sor|a| ontropronour and projoct add|ct, a|ways |ook|ng tor tho
noxt b|g prob|om to so|vo and |ndustry to ro|nvont. |o bounds up sta|rs two at a t|mo, t|dgots |n
h|s cha|r and raro|y s|oops |n tho samo houso (or boat or jot) two n|ghts |n a row. |o t|ros ott o-
ma||s at 8 A.V. and koops h|s dr|vors and p||ots |n a constant stato ot pan|c as thoy try to koop up
w|th h|s da||y movomonts. (You can a|ways hoar 1|m approach|ng bocauso ot tho urgont boops
and shouts trom h|s stattors' rad|os.)
3||xsoth and h|s k|nd aro ro|nvont|ng tho |o|suro c|ass. 1ho |d|o r|ch aro bo|ng rop|acod by tho
workaho||c woa|thy. 1hoy don't havo tho t|mo or pat|onco to puttor around tho croquot court or s|p
away tho hours |n tho po|o box ||ko O|d Vonoy. ln an oconomy dr|von moro than ovor by
compot|t|on and |nnovat|on, tho poop|o who succood tond to bo thoso who thr|vo on r|sk,
ro|nvont|on and bruta| hours. l|ch|stan|s aro youngor than tho r|ch ot tho past, and tar moro ||ko|y
to bo work|ng or runn|ng tho|r own bus|nossos. 1hoy c||mbod tho|r way up trom tho m|dd|o c|ass
and cont|nuo to dot|no thomso|vos by tho|r 18-hour days and outs|zod product|v|ty.
|or l|ch|stan|s, work has bocomo tho|r p|ay, and p|ay has bocomo tho|r work. Yachts and jots
aro now |oadod w|th commun|cat|ons goar to a||ow tho r|ch to koop work|ng ovon |t thoy'ro
t|oat|ng |n tho Vod|torranoan or soar|ng abovo tho At|ant|c. 1ho now crowd |n la|m 3oach, as
wo'|| soo |n a |ator chaptor, sponds as much t|mo on tho|r |aptops as thoy do on tho go|t courso.
Whon l askod a hodgo-tund managor |n Groonw|ch whothor ho'd jo|nod a |oca| yacht or country
c|ub, ho rop||od, °And do what? 3|t around |n wh|to pants and a b|uo b|azor and comp|a|n about
tho govornmont? lot tor mo.'
3||xsoth typ|t|os th|s now |doa| ot work|ng |o|suro. lorbos magaz|no rocont|y rankod 3||xsoth as
ono ot tho 400 r|chost Amor|cans, putt|ng h|s not worth at about $1.2 b||||on. Yot ho |ooks noth|ng
||ko a b||||ona|ro, at |oast |n tho trad|t|ona| sonso. ||s da||y un|torm cons|sts ot a pa|r ot cargo
shorts, |awa||an sh|rts, sanda|s and a basoba|| cap. |o has a porpotua| tan, scrutty goatoo,
buzz-cut brown ha|r and w|ry phys|quo, mak|ng h|m |ook moro ||ko a surt-shop managor than a
t|mbor tycoon. |o carr|os throo th|ngs |n h|s pockot-a wad ot cash, a pon and a $8 p|ast|c
ca|cu|ator. Whon 1|m has |mportant moot|ngs w|th bankors or CEO typos, ho'|| somot|mos woar a
button-down sh|rt and |ong pants. 3u|ts aro out. °l on|y woar thom a tow t|mos a yoar. And that's |t l
havo wodd|ngs or tunora|s.'
1|m |ooks so downsca|o that ho's troquont|y k|ckod out ot h|gh-ond storos and car doa|orsh|ps.
Ono day, drossod |n muddy work boots and joans, ho took h|s son, 3oau, to a mon's bout|quo
noar la|m 3pr|ngs to buy a graduat|on su|t. 1ho sa|osman hoadod thom ott at tho door and sa|d,
°l th|nk you'd bo bottor ott at tho ma||.'
°You shou|d havo soon tho |ook on that guy's taco whon wo drovo away |n tho lo||s,' ho says.
1|m |ovos pranks. Ono day whon l accompan|od h|m to Vox|co, ho consp|rod w|th Vox|can
|mm|grat|on to havo mo br|ot|y dota|nod tor °smugg||ng.' (|o had tho ott|c|a|s |augh|ng tor hours.)
|o and Edra throw op|c part|os, tor 1|m's b0th b|rthday, thoy turnod tho|r go|t courso |nto a ||v|ng
t|mo||no, |nsta|||ng a 'b0s d|nor on tho|r dr|v|ng rango, comp|oto w|th c|ass|c cars. 1hoy sot up
s|m||ar stat|ons tor tho '00s, '70s, '80s and '00s and t|n|shod w|th a °t|mo tunno|' that ushorod
guosts to a spacosh|p that ro|oasod a g|ant b|rthday cako. |ormor pros|dont Gora|d |ord sont
b|rthday w|shos v|a v|doo. |or Edra's b0th, 1|m h|rod an ont|ro cast ot Vunchk|ns trom a ¼lzoro
oí Oz product|on and had lau| Anka s|ng a porsona||zod vors|on ot °Vy Way.'
|or ono ot tho|r wodd|ng ann|vorsar|os, 1|m sot up d|nnor tor two by tho|r poo|. On tho tab|o, ho
p|acod a crysta| bow| t|||od w|th b0 raw carrots. Whon Edra askod why thoy woro thoro, 1|m sa|d,
°Count thom,' and undornoath sho tound a b0-carat d|amond nock|aco.
3t|||, 1|m ||kos to portray h|mso|t as a k|nd ot Evoryman's 3||||ona|ro-just a poor proachor's
son who mado good |n tho t|mbor trado. |o grow up |n losoburg, Orogon, a sma|| |ogg|ng town
18b m||os south ot lort|and. ||s tathor cou|dn't support tho tam||y bocauso ot a hoart cond|t|on so
thoy ||vod ott wo|taro. 1|m a|so ho|pod out by work|ng tho n|ght sh|tt at a |oca| sawm|||.
°l was born w|th a rusty spoon |n my mouth,' ho says. (|o st||| has an avors|on to 3pam, wh|ch
h|s tam||y got tor troo and ato rogu|ar|y.)
Grow|ng up poor, 1|m dovo|opod somoth|ng ot a ch|p on h|s shou|dor. ln jun|or h|gh schoo|,
studonts wa|tod |n two ||nos |n tho catotor|a: tho °pay|ng' ||no or tho °troo|unch' ||no tor wo|taro
k|ds. 1|m had to wa|t |n tho troo ||no and was constant|y badgorod by othor k|ds.
°1hoy'd po|nt at mo and yo|| 'wo|taro k|d, wo|taro k|d!,'' ho says. °3oy, that roa||y got mo
sooth|ng.'
1|m got h|s t|rst |osson |n succoss trom h|s h|gh schoo| shop toachor.
°1ho guy's namo was Wa||y E|ch|or. Evoryono ca||od h|m lough Cut Wa||y, bocauso ho was
ono ot thoso roa| tough, no-nonsonso guys. On tho t|rst day ot c|ass, lough Cut Wa||y sa|d to us,
'l don't g|vo a damn |t you |oarn a s|ng|o th|ng |n th|s c|ass. 3ut just romombor that you can do
anyth|ng you want |n th|s country |t you want to. You can succood or ta||, but |t's up to you. You'ro
ont|ro|y rospons|b|o.'' 3||xsoth took tho adv|co to hoart and mado a portoct|y crattod t|n box that
ho st||| koops |n h|s dross|ng room to rom|nd h|m ot Wa||y.
0osp|to bo|ng a proachor's son, 3||xsoth p|acod ||tt|o ta|th |n ro||g|on. ||s paronts jo|nod a
Chr|st|an cu|t |od by a man who c|a|mod that tho group's 107 mombors wou|d bo tho on|y poop|o
adm|ttod to hoavon.
°lt soomod r|d|cu|ous to mo that on|y thoso 107 poop|o wou|d got |nto hoavon,' 1|m says. °Why
on|y thoso 107 poop|o?'
At tho ago ot 1b, 3||xsoth doc|dod to go |nto bus|noss. |o was comb|ng tho c|ass|t|od ads |n
tho |oca| papor ono day and not|cod an ad tor throo donkoys that woro bo|ng so|d tor $2b oach.
|o took h|s sav|ngs, bought tho donkoys and brought thom homo. 1ho noxt day, ho put an ad |n
tho papor ottor|ng °throo pack mu|os' tor $7b oach. 1hoy so|d |nstant|y.
°l wasn't so|||ng 'donkoys.' l was so|||ng 'pack mu|os,'' ho says. °1hat's how l |oarnod about
markot|ng.'
3oon attor, ho saw an ad |n tho papor tor a 800-acro p|oco ot t|mbor proporty tor $00,000. 1|m
baro|y had $1,000 to h|s namo. Yot ho bought tho proporty w|th $1,000 down and a prom|so to
pay tho rost w|th|n a wook.
°1ho roa|tor sa|d to mo, 'K|d, l'm go|ng to tako your monoy to toach you a |osson. lt you don't
pay mo tho rost ot tho $00,000 w|th|n a wook, l'm go|ng to koop your $1,000.''
Yot 1|m tound a t|mbor company to buy tho proporty a wook |ator tor $140,000, g|v|ng h|m an
|nstant prot|t ot $b0,000.
°Vy dad assumod l must havo dono somoth|ng |||oga| s|nco |t was so much monoy,' ho sa|d.
°|o was go|ng to turn mo |n to tho po||co unt|| l oxp|a|nod tho who|o th|ng.'
3||xsoth |aunchod a caroor as a t|mbor|and trador. |o combod through |and rocords |n romoto
towns |n tho lac|t|c lorthwost, bought ovor|ookod proport|os, and t||ppod thom to |ogg|ng
compan|os or |argor |andownors. lator, ho branchod out |nto |ogg|ng and m||||ng. 3y tho t|mo ho
was 80, ho was oarn|ng $1 m||||on a month. |o mot Edra, a succosstu| hoto||or, marr|od, bought
a |argo homo and startod ra|s|ng tho|r tour k|ds (a|| trom prov|ous marr|agos).
1hon, |n tho oar|y 1080s, |t a|| camo crash|ng down. 1|mbor pr|cos p|ungod by moro than 80
porcont. 3||xsoth was h|gh|y |ovoragod and was torcod to doc|aro bankruptcy. |o |ost h|s
bus|noss, so|d tho houso and strugg|od tor months to pay tho ||ght b|||s.
°lt was tho bost th|ng that ovor happonod to mo,' ho says. °l |oarnod to novor aga|n havo any
dobt. 0obt |s tho th|ng that k|||s you.'
1o th|s day, 3||xsoth doosn't havo a s|ng|o mortgago on h|s homos. 1ho bankruptcy, and h|s
poor ch||dhood, aro a|so tho ma|n roasons 1|m ||kos buy|ng |and-and a|ways w|th cash. °lo ono
can tako |t away trom mo. lt's pormanont.'
Attor bankruptcy, 3||xsoth wont back to |and trad|ng and ovontua||y bu||t up onough cash to
toam up w|th a partnor to torm Crown-lac|t|c, a t|mbor and papor company. |o so|d h|s stako |n
1000 tor moro than $20 m||||on and rot|rod at ago 40.
°l thought $20 m||||on was a|| l cou|d ovor nood tor tho rost ot my ||to,' ho says.
|o bought a C|tat|on jot and a homo |n 3un l|vor, Orogon. |o k|ckod back and roturnod to h|s
t|rst |ovo-s|ng|ng and songwr|t|ng. ln tho 1070s, 3||xsoth had bocomo a m|nor pop sonsat|on
w|th a song ca||od °l |opo to ||nd Your la|nbow' wh||o anothor ono ot h|s tunos, °Coyoto Ug|y,'
bocamo a cu|t co||ogo h|t.
Attor a tow months, 1|m roa||zod ho wasn't cut out tor rot|romont. |o noodod projocts, doa|s
and prob|oms to so|vo.
°|o was m|sorab|o,' Edra roca||s. °3o woro wo.'
ln 1001, 1|m bought 104,000 acros ot |and |n Vontana trom anothor t|mbor company and
orchostratod a comp|ox swap w|th tho todora| govornmont. ln oxchango tor 87,000 acros ot
onv|ronmonta||y sons|t|vo |and (|t was a brood|ng aroa tor o|k and gr|zz|y boars), tho govornmont
grantod 1|m's company about 18,b00 acros ot moro accoss|b|o and moro commorc|a||y
attract|vo |and on tho northwost cornor ot Yo||owstono lat|ona| lark, noar 3|g 3ky rosort.
3ocauso ot |ts s|zo and |mportanco, tho doa| roqu|rod spoc|a| approva| trom Congross. (1|m |s a
gonorous donor to lopub||can and 0omocrat|c po||t|c|ans.)
ln|t|a||y, 1|m and Edra p|annod to uso tho proporty tor a pr|vato tam||y ranch. 3ut ono day, thoy
woro hav|ng a p|cn|c on tho proporty and 1|m |ookod up at a noarby mounta|n s|opo and sa|d,
°Why don't wo put a sk| ||tt thoro?'
°Wo thought |t wou|d bo a n|co ||tt|o rotroat tor our tam||y and tr|onds,' 1|m says.
3o many tr|onds wantod to jo|n thom that thoy doc|dod to turn |t |nto a pr|vato sk|-and-go|t
commun|ty. 1hus, tho Yo||owstono C|ub was born. 1ho c|ub has noar|y 800 mombors, oach ot
whom pays $2b0,000 to jo|n a|ong w|th m||||ons ot do||ars to bu||d or buy a houso on tho s|to. 3|||
Gatos |s a mombor, a|ong w|th lows Corp. pros|dont lotor Chorn|n, Comcast pros|dont 3tovo
3urko, and tormor U.3. v|co pros|dont 0an Ouay|o. As tho c|ub's Wob s|to says, °3omot|mos you
havo to pay to p|ay.'
Whon 1|m startod Yo||owstono, rosort ownors and vacat|on oxports sa|d ho was crazy. loop|o
wou|d novor pay that much to jo|n a c|ub, ospoc|a||y s|nco thoy cou|d a|roady sk| and go|t on tho|r
own |n Aspon and othor upsca|o |oca|os. Ono tr|ond askod |t ho a|so bo||ovod |n tho °tooth ta|ry.'
|onco, 1|m's namod h|s now $20 m||||on yacht °1ooth |a|ry.'
3o|ng r|ch thomso|vos, 1|m and Edra know oxact|y what othor woa|thy poop|o want. 3ocur|ty at
tho Yo||owstono C|ub |s t|ght and |s |od by a tormor 3ocrot 3orv|co agont to lros|dont |ord.
Vombors can sk| moro than 00 tra||s w|thout hav|ng to wa|t |n ||tt ||nos or dodgo tho ho| po||o|. On
tho go|t courso, too t|mos aro unhoard-ot. log|ons ot c|ub statt aro a|ways on hand to prowarm
tho mombors' sk| boots, stock tho|r homos w|th grocor|os and t|owors and, |n ono caso, hand-
s||co spoc|a| moat tor tho|r dogs.
lndood, tho b|g draw ot tho Yo||owstono C|ub |s tho comtort ot know|ng that ovoryono around
you |s woa|thy.
°loop|o can ro|ax and bo thomso|vos,' Edra says. °1hoy can |ot tho|r k|ds run around w|thout
worry|ng about thom.'
3y 200b, howovor, 1|m was gott|ng rost|oss aga|n. |o noodod a now projoct. Ono day, a
Yo||owstono mombor askod h|m about dost|nat|on c|ubs, |n wh|ch mombors pay s|x-t|guro annua|
duos to stay at upsca|o vacat|on homos. 1|m and Edra ||kod tho |doa so much thoy doc|dod to
croato tho|r own, but on a much grandor sca|o.
Us|ng hundrods ot m||||ons ot do||ars ot tho|r own monoy, thoy wont on a g|oba| shopp|ng sproo
to t|nd tho most oxot|c and pr|vato oscapos |n tho wor|d. °1hoy had to bo p|acos that ovon tho
woa|thy can't t|nd or attord on tho|r own,' as 1|m puts |t. °1hoy had to havo tho wow tactor. Or
moro ||ko tho doub|o wow tactor.'
1hoy bought a p|ot ot |and noar 3t. Androws, 3cot|and-tho |ogondary homo ot go|t-whoro
thoy'ro bu||d|ng a go|t courso r|ngod by |uxury cottagos. 1hoy bought a 18th-contury cast|o outs|do
lar|s, rostorod w|th an |ndoor sw|mm|ng poo|, tu||-sorv|co spa and chot's k|tchon. 1hoy scoopod
up a p|ush |odgo and trout-t|sh|ng |ako noar Cody, Wyom|ng, a|ong w|th proporty |n tho Ca||torn|a
dosort to bu||d a spa. 1hoy purchasod throo boach rotroats-1amar|ndo |n Vox|co, a pr|vato
|s|and |n 1urks and Ca|cos and a rosort |n 1ah|t|.
1o mako |t oas|or tor guosts to got around, 1|m throw |n two yachts and a t|oot ot pr|vato jots.
And ho h|rod an army ot stattors, trom w|no oxports and chots to but|ors and conc|orgos.
°You m|ght start ott tak|ng tho jot to 3t. Androws tor somo go|t,' 1|m says. °1hon you t|y to tho
|ronch cast|o tor a tow days, thon do somo yacht|ng around tho Vod|torranoan tor a tow days
botoro hoad|ng back to tho U.3. lt's oxact|y what l wou|d want |n a vacat|on.'
lot that ho's ovor vacat|onod at h|s rosorts. Whon l askod 1|m and Edra |t thoy can romombor
tho|r |ast nonwork|ng ho||day, thoy pauso.
°l th|nk 1000, so sovon yoars ago,' 1|m says.
°lo,' Edra says. °Wo workod dur|ng that ono.'

1ho ContIictod EIito

|or a|| h|s woa|th, 1|m 3||xsoth hatos bo|ng |abo|od °r|ch.' l|ch poop|o, ho says, aro stutty,
protont|ous and out ot touch. l|ch|stan|s ||ko to th|nk ot thomso|vos as ord|nary poop|o, a|bo|t w|th
oxtraord|nary tortunos. 1hoy go out ot tho|r way to appoar norma|. l|ch|stan|s woar po|o sh|rts,
casua| s|acks and opon-co||ar dross sh|rts, torsak|ng tho o|d un|torm ot monogrammod sh|rts and
su|ts. As ono la|m 3oachor to|d mo: °3u|ts aro tor tho poop|o who work tor mo.' l|ch|stan|s
doscr|bo thomso|vos as °down to oarth,' ovon as thoy tako ott |n tho|r pr|vato Gu|tstroams. As tho
b||||ona|ro vu|turo |nvostor 0av|d 1oppor to|d 7bo ¼o|| 5troot 1ooroo| rocont|y, °l'm just a m|dd|o-
c|ass dad trappod |n a r|ch man's body.'
3||xsoth |s oqua||y d|sparag|ng ot tho °r|ch.'
°l don't ||ko most r|ch poop|o,' ho says. °1hoy can bo arrogant.'
Woa|th, ho adds, can br|ng out tho worst-or bost-|n poop|o, mak|ng thom a moro
oxaggoratod vors|on ot thomso|vos.
°Vonoy |s ||ko a truth sorum. lt br|ngs out poop|o's truo naturo. 3o |t somoono's a|roady a jork,
thoy bocomo moro ot a jork attor thoy'ro r|ch.'
Whon l rom|nd h|m that ho's a b||||ona|ro, ho says: °Whon poop|o say that, l th|nk thoy'ro ta|k|ng
about somoono o|so. 3||||on |s a numbor that sooms so tar on tho hor|zon |t doosn't ovon sound
roa| to mo.'
1ho contus|on |s common among today's l|ch|stan|s. 1hoy str|vo to ma|nta|n tho|r m|dd|o-c|ass
|dont|t|os. 1hoso aron't tho yupp|o, bourgoo|s bohom|ans that 0av|d 3rooks br||||ant|y doscr|bod
| n Bobos lo Poroolso, l|ch|stan|s aro much woa|th|or and moro oxtravagant. 3||xsoth and othor
l|ch|stan|s havo dua| porsona||t|os, w|th m|dd|o-c|ass va|uos and uppor-c|ass ||tosty|os.
Evory morn|ng (or at |oast on thoso morn|ngs whon ho's homo), 3||xsoth wakos up oar|y, gots
|n h|s l|ssan Armada and dr|vos to tho |oca| 3tarbucks. |o ordors h|s usua| cato mocha, t|nds a
cha|r and s|ts down to road tho papor. W|th a pr|vato k|tchon statt ot 10 cooks-|nc|ud|ng an
award-w|nn|ng Gorman chot-1|m cou|d oas||y t|nd cottoo at homo. Yot ho protors to bo around
rogu|ar poop|o.
°lt koops mo sano,' ho says on a rocont morn|ng, sandw|chod at a 3tarbucks tab|o botwoon a
scroam|ng baby and a group ot octogonar|an rot|roos.
1|m's sp||t porsona||ty |s rot|octod ovon moro c|oar|y |n h|s cho|co ot cars. l ask h|m ono
attornoon how many cars ho owns. |o starts count|ng, runs out ot t|ngors and says, °l roa||y don't
know.'
|o onco wa|kod |nto a 3ont|oy doa|orsh|p and bought a $2b0,000 convort|b|o on |mpu|so.
Whon l not|co two g|oam|ng lo||s-loyco lhantoms-ono pa|ntod |n two-tono b|ack and s||vor
and tho othor b|uo-parkod at tho back ot h|s houso, l ask h|m why ho noods two. (1hoy oach
rota|| tor moro than $820,000.)
°1ho two-tono ono, that's my rostaurant car. You got a bottor park|ng spaco [trom tho va|ots|.'
At tho samo t|mo, ho rocont|y phasod out h|s tam||y's t|oot ot lango lovors tor l|ssan
Armadas. 1hoy woro, 1|m boasts, ha|t tho pr|co.
°A groat doa|,' ho says. °l pa|d ha|t as much tor a car that's just as good or bottor than tho
lango lovors. Why shou|d l pay moro?'
|o thon ottors to show mo h|s tavor|to car. 3ypass|ng tho two lo||s, ho wa|ks ovor to a t|ny,
1,000-pound 3mart Car, wh|ch rota||s tor $20,000 and gots s|xty m||os por ga||on.
°l |ovo |t. 3|xty m||os por ga||on, |sn't that groat?'
At tho samo t|mo, 3||xsoth's ||tosty|o |s oxpand|ng so qu|ck|y ho somot|mos |osos track. Ono
n|ght ovor d|nnor, l ask 1|m and Edra how many houso statt thoy omp|oy at lorcup|no Crook.
°W|th tho ma|ds, socur|ty guys, spa statt, k|tchon and ovoryth|ng,' 1|m says, °probab|y about 00
or 70.'
Edra |ntorrupts. °lt's moro than that.'
°Voro?' 1|m asks.
°lt's 10b,' sho says
°lt |t's 10b wo havo a prob|om,' 1|m says.
°l just countod yostorday. lt's 10b.'
°1hon wo havo a prob|om,' 1|m says, sm|||ng as |t |t's roa||y not a prob|om.
lorcup|no Crook |s ono ot tho most |av|sh ostatos |n tho country. 1ho woodon gatos opon up
onto a 0|snoyosquo tantasy, w|th t|owors, watorta||s, go|t groons and pr|vato roads ||t w|th |ronch
stroot|amps that onco ||nod tho Champs E|ysoos.
A soar|ng tounta|n, modo|od attor las vogas's 3o||ag|o, r|sos |n tront ot tho ma|n houso, a two-
story Vod|torranoan pa|aco. lns|do |s a monagor|o ot 18th-contury Europoan ant|quos, ovors|zod
t|sh tanks, mosa|cs, crysta| chando||ors, As|an scu|pturos, art doco bars, carvod-wood co|||ngs
and g|ant b|rdcagos.
1ho 3||xsoths' bod camo trom tho archb|shop ot V||an's quartors and has a carvod 1osus on
ono s|do (1|m's) and a Vary on tho othor (Edra's). 1ho|r wa|k-|n rotr|gorator |s b|ggor than most
low York apartmonts.
1ho|r houso ovon has |ts own |ogo, wh|ch adorns tho towo|s |n ovory bathroom and tho sh|rts on
ovory stattor. 1ho 3||xsoths' dogs aro oqua||y jot sot: 1ho|r sh|h tzus woro namod loarjot and G2.
(1hoy'ro p|ann|ng an upgrado to a Gbb0.)
At tho samo t|mo, 1|m and Edra g|vo away m||||ons oach yoar to ph||anthropy. And 1|m's g|v|ng
sty|o |s un|quo, to say tho |oast. Whon ho roads about somoono |n tho papor who's suttor|ng or |n
nood, ho shows up w|th g|tts and cash. 1ho o|omont ot surpr|so |s koy, mak|ng h|m a k|nd ot
guorr|||a ph||anthrop|st. ln 2004, ho road about a job|oss, parap|og|c man |n Ca||torn|a who was
robbod ot ovoryth|ng |n h|s homo. 3||xsoth pu||od up tho noxt morn|ng w|th a truck tu|| ot now
app||ancos, computors and o|octron|c oqu|pmont. Whon ho saw 1|m stand|ng at tho tront door,
tho man thought ho was bo|ng robbod a socond t|mo.
°|o pookod out tho door and sa|d 'l|oaso go away. l don't havo anyth|ng |ott.'' 1|m roca||s.
°Evontua||y, attor wo startod un|oad|ng tho rotr|gorator and a|r cond|t|onors, ho |ot us |n.'
1|m a|so bocamo a b|g torco boh|nd tho |ab|tat tor |uman|ty campa|gn tor Katr|na v|ct|ms. |o
donatod $2 m||||on to tho ottort and got dozons ot h|s woa|thy tr|onds and mombors to contr|buto
as wo||. |o a|so wroto a song, ca||od °|oart ot Amor|ca,' wh|ch was |ator rocordod to ho|p ra|so
Katr|na tunds.
Around la|m 3pr|ngs, 1|m |s known tor hand|ng out $20 b|||s to va|ots, busboys and 3tarbucks
bar|stas. Ono day whon wo woro |n Vox|co, ho handod a $100 t|p to tho dr|vor, who starod at 1|m
||ko ho was crazy. Whon l askod h|m |t ho worr|od that tho monoy wou|d bo wastod, 1|m
rospondod: °l hopo ho ooos wasto |t. lt that dr|vor takos that monoy and buys a co|d boor, and s|ts
on h|s porch and dr|nks that boor, and |t's tho on|y momont ot roa| p|oasuro ho has a|| day, thon
l'vo dono a good th|ng. 1hat's worth |t to mo.'
Ono day, |n tho summor ot 2000, l ca||od 1|m and askod how ho was do|ng. °Groat,' ho sa|d. °l
th|nk l just mado anothor b||||on do||ars.' A |argo roa|ostato dovo|opor wantod to bu||d on a 4,200-
acro p|oco ot |and that 1|m ownod |n 3outhorn Ca||tor|a, propos|ng a doa| that cou|d ovontua||y
not 1|m $1 b||||on.
°lt's truo what thoy say-tho t|rst b||||on |s tho hardost. 1ho socond ono was protty oasy.'
3o |s |os|ng a b||||on. At tho ond ot 2000, 1|m and Edra doc|dod to d|vorco. 1hoy sp||t tho|r
assots |n ha|t, through an am|cab|o sott|omont, and 1|m t|guros ho's st||| worth about $1 b||||on
attor tho sp||t.
Yot |n today's l|ch|stan, d|vorco |sn't tho on|y way to |oso a tortuno. 1ho |ncroas|ng|y vo|at||o
t|nanc|a| markots, wh||o croat|ng hugo opportun|os, havo a|so croatod now r|sks tor tho woa|thy.


5

LO5|NC |1

Pete Musser

loto Vussor romombors tho momont ho bocamo a b||||ona|ro.
lt was tho wook attor Chr|stmas |n 1000. loto, a 72-yoar-o|d ontropronour, was ro|ax|ng w|th
h|s 84-yoar-o|d g|r|tr|ond, |||ary Gr|nkor, at tho las vontanas rosort |n los Cabos, tho Vox|can
boach rotroat. 1hoy woro |oung|ng noxt to tho|r pr|vato poo| ovor|ook|ng tho 3oa ot Cortoz, whon
loto ca||od h|s socrotary to chock tho stock pr|co ot h|s company, 3atoguard 3c|ont|t|c. loto
was 3atoguard's toundor and ho ho|d m||||ons ot sharos. 3atoguard had bocomo an |nvostor |n
scoros ot dot-com compan|os, so |ts sharos woro soar|ng w|th tho dot-com bubb|o. 1ho day loto
ca||od, h|s sharo pr|co broko $80. ||s othor stocks, most ot thom dot-com compan|os, woro a|so
skyrockot|ng.
|o and |||ary both d|d a qu|ck ca|cu|at|on and sm||od. loto Vussor was now worth moro than
a b||||on do||ars.
|||ary startod jump|ng up and down on tho bod.
°Oh my God,' sho scroamod. °What aro wo go|ng to do w|th a|| ot th|s monoy?!'
lot that thoy noodod any suggost|ons. A tow yoars oar||or thoy had purchasod a 24-acro
ostato |n 3ryn Vawr, lonnsy|van|a, ca||od 3ont|o|d, wh|ch had a 7,400-squaro-toot mans|on,
0,800-squaro-toot guosthouso, |ndoor tonn|s court, |ndoor poo|, tu||y oqu|ppod gym and spraw||ng
gardons. |||ary t|||od tho houso w|th ant|quos trom Europo, a|ong w|th hand-pa|ntod mura|s.
1hoy a|so bought |and |n lantuckot, whoro thoy bu||t a p|ush summor homo w|th °h|s' and °hor'
tonn|s courts. 1o got to a|| tho|r roa| ostato, thoy bought a Cha||ongor jot and a strotch ||mous|no.
1hoy vacat|onod at tho |our 3oasons |n lov|s and acqu|rod now wardrobos. loto gavo away
m||||ons to tho lod Cross, Un|tod Way and 3oy 3couts, bocom|ng ono ot lonnsy|van|a's most
co|obratod ph||anthrop|sts.
°3oy, d|d |t too| groat,' loto roca||s. °|||ary corta|n|y onjoyod |t. And l onjoyod |t, too. 3ut tho
ma|n th|ng l onjoyod was what wo woro do|ng tor a|| tho 3atoguard sharoho|dors who woro
soo|ng tho|r |nvostmonts go up. 1hat's what roa||y mado mo proud.'
Unt|| tho spr|ng ot 2000. 1hat's whon tho dot-com bubb|o burst, tho markots tankod and loto's
stocks p|ummotod. ln just a tow months, ho wont trom b||||ona|ro to dobtor. 1oday, ho has a
nogat|vo not worth ot $1b m||||on, s|nco ho owos monoy to 3atoguard trom marg|n |oans. Attor
bo|ng oustod trom tho company, ho works |n a sma|| ott|co on tho 3atoguard campus.
|o and |||ary, whom ho marr|od |n 2000, havo d|vorcod. 1hoy |a|d ott most ot tho|r statt and
so|d tho p|ano, tho |and |n lantuckot, and a p|aco |n tho loconos. loto now ||vos a|ono at
3ont|o|d, wh|ch ho's put on tho markot tor $8.b m||||on. |o ramb|os around tho g|ant houso w|th
h|s arthr|t|c go|don rotr|ovor, ||gg|ns. Whon l v|s|tod ono morn|ng |n Vay, tho tam||y room was st|||
tostoonod w|th Chr|stmas docorat|ons, |nc|ud|ng an art|t|c|a| troo dockod out w|th ||ghts and
ornamonts. Vussor says ho otton wakos up |n tho morn|ng, turns on tho troo and just staros at tho
tw|nk||ng ||ghts.
°lt's choory,' ho says, s|tt|ng w|th ||gg|ns noxt to tho troo. °lt makos mo too| bottor.'

Foar ot FaIIing

Wh||o tho now r|ch can mako g|ant tortunos |n rocord t|mo, thoy can |oso thom just as qu|ck|y.
||nanc|a| markots and tast-chang|ng tochno|og|os havo croatod h|stor|c opportun|t|os tor
ontropronours and corporato ch|ots to mako m||||ons and b||||ons v|rtua||y ovorn|ght. Yot thoy havo
a|so croatod h|stor|c opportun|t|os to |oso |t a|| oqua||y tast.
|or l|ch|stan|s, th|s |s tho now |oar ot |a|||ng. Wh||o tho bu|k ot tho country's top woa|th usod
to bo groundod |n hard assots, ||ko |and, roa| ostato, trucks, tactor|os and bu||d|ngs, much ot
today's woa|th |s tothorod to stocks, opt|ons, dor|vat|vos and othor troo-t|oat|ng assots. As a
consoquonco, l|ch|stan|s aro moro vu|norab|o than ovor to suddon woa|th shocks.
1ho stock-markot doc||nos ot 2001 markod tho b|ggost |ossos. Amor|can m||||ona|ros |ost
about $200 b||||on botwoon 2001 and 2002. And |t wasn't just 20-somoth|ng dot-commors who
had to movo back to tho|r paronts' garagos.
Ot tho 400 poop|o on tho 2001 |orbos ||st, 280 woro not on tho ||st |n 1080. |or ovory now
ontry on tho ||st, a tormor mombor ta||s ott, and |t's a|most a|ways duo to ta|||ng stock pr|cos. 1ho
200b |orbos dropouts |nc|udod 1homas Vars|co, tho mutua|-tund magnato, loon lov|no ot
|am||y 0o||ar 3toros, lorman W. Wa|tt 1r. ot Gatoway, |o||ywood doa| makor 1ottroy
Katzonborg, and l|tt|o Caosars p|zza k|ng V|chao| l||tch. 3||| Gatos |ost $12 b||||on ot h|s papor
woa|th |n Apr|| ot 2000, whon a judgo ru|od that V|crosott had v|o|atod todora| ant|trust ru|os and
V|crosott stock tankod. lapor woa|th, attor a||, |s just that.
Grantod, l|ch|stan|s don't otton doscond |nto povorty. 3tud|os show that whon poop|o tumb|o
trom tho top ot tho woa|th |addor-known as downward mob|||ty-thoy usua||y |and just a tow
rungs |owor. What's moro, many ot today's r|ch start w|th such hugo tortunos that ovon an 80
porcont drop |oavos thom w|th p|onty |ott ovor.
3t|||, today's r|ch aro vu|norab|o to |nstant changos |n tho|r tortunos. ln a rosoarch papor on
woa|th mob|||ty, soc|o|og|st 1homas 0|lroto wroto that a |argo numbor ot today's top oarnors
broak |nto tho ranks ot tho woa|thy tomporar||y, on|y to ta|| back to tho|r prov|ous pos|t|ons. ln
othor words, |ncomo and woa|th vo|at|||ty-a prob|om usua||y assoc|atod w|th tho m|dd|o c|ass
and |owor m|dd|o c|ass-has startod croop|ng up tho oconom|c |addor.
°Wh||o a |argo proport|on ot any o||to |ncomo groups ros|dos |n th|s (uppor ond) group on a
moro or |oss pormanont bas|s, tho|r ranks a|ways |nc|udo anothor |argo group that crossos tho
throsho|d on|y on a tomporary bas|s, |ator to ta|| back to a |owor |ncomo catogory.'
|ow ta||s havo boon as dramat|c as Warron °loto' Vussor's. 1ho Vussors don't ||ko to ta|k
about what thoy ca|| °tho troub|os.' And thoy'vo novor d|scussod tho|r oxpor|onco pub||c|y, say|ng
thoy want to got on w|th tho|r now ||vos.
°l a|ways th|nk about tho tuturo, not tho past,' says tho ovor-opt|m|st|c Vussor.
Yot loto's story |s a surpr|s|ng doparturo trom a|| tho othor dot-com busts at tho turn ot tho
contury. |o wasn't a naïvo, 20-somoth|ng toch|o w|th a got-r|ch-qu|ck p|an. |o was a gray-ha|rod
p|||ar ot tho lonnsy|van|a bus|noss ostab||shmont and a votoran bus|nossman who spont noar|y
b0 yoars bu||d|ng succosstu| start-up compan|os. ln tact, |t was tho vory samo qua||t|os that
ho|pod h|m |n bus|noss-h|s unshakab|o opt|m|sm and ta|th |n now markots-that ovontua||y
provod h|s undo|ng |n tho lntornot ago.
°l havo no ono to b|amo but myso|t,' ho says. °l got suckod |n by tho |rros|st|b|o torco ot tho
lntornot.'
Vussor's can-do dr|vo sorvod h|m wo|| most ot h|s ||to. 1a|| and s||m, w|th br|ght b|uo oyos, a
gravo||y vo|co and a boom|ng |augh, Vussor |ooks tho part ot a to|ksy, o|dschoo| CEO. |o's a
popu|ar t|guro around lh||ado|ph|a's Va|n l|no, known tor h|s br|ght yo||ow swoator vosts, sporty
convort|b|os and w|nn|ng tonn|s gamo. |o's a natura| charmor, ovon at 80, ho's dat|ng troquont|y
(°3omo ot thoso g|r|s aro |n tho|r 80s!' ho says), though ho adm|ts many ot h|s datos st||| assumo
ho's woa|thy.
°l don't oxact|y d|scourago thom ot tho not|on,' ho says.
|o's oqua||y pors|stont |n bus|noss. Yoars ago, ho was moot|ng w|th a potont|a| bus|noss
partnor |n 3outh Caro||na who mont|onod that ho ||kod tonn|s. Vussor d|dn't havo h|s tonn|s goar,
but |ator that n|ght, attor a tow cockta||s, ho agrood to p|ay tor two hours |n h|s baro toot.
ln h|s ott|co, Vussor koops a bronzo statuo ca||od °1ho 3o|t-Vado Van,' wh|ch dop|cts a
muscu|ar Adon|s w|th a ch|so| carv|ng h|mso|t out ot a rock baso. °l |dont|ty w|th h|m,' Vussor
says. °You mako your own way |n th|s wor|d and you can bo whoovor you want to bo.'
Vussor was ra|sod by a s|ng|o mom |n |arr|sburg, lonnsy|van|a. Attor study|ng |ndustr|a|
ong|noor|ng at loh|gh, ho bocamo a stockbrokor and |ator, attor ta|||ng to mako h|s sa|os draw,
|ott w|th a co||oaguo to start h|s own brokorago t|rm. ln 10b8, ho ra|sod $800,000 trom c||onts and
tr|onds and |aunchod tho company that |ator bocamo 3atoguard. lts m|ss|on was to |nvost |n
sma|| start-up compan|os, tund|ng tho|r growth and thon so|||ng ott tho|r stakos through pub||c
ottor|ngs or othor p|acomonts. |o was, |n ottoct, ono ot tho t|rst vonturo cap|ta||sts |n tho country.
Vussor had a spoc|a| ta|ont tor spott|ng tuturo bus|noss stars. |o so|d la|ph loborts h|s t|rst
cab|o systom, wh|ch |ator grow |nto Comcast-tho nat|on's b|ggost cab|o company. |o
oncouragod |rank||n V|nt toundor 1oo 3oga| to |aunch a homo-shopp|ng notwork, wh|ch bocamo
OvC. Vussor was |nstrumonta| |n |aunch|ng lovo||, tho g|ant sottwaro t|rm.
|or most ot h|s ||to, ho ||vod truga||y. |o accumu|atod h|s woa|th gradua||y, bu||d|ng up a tortuno
ot about $70 m||||on by 100b. |o |ovod h|s da||y rout|no, wh|ch ho st||| to||ows to th|s day-r|s|ng at
dawn, hoad|ng to tho noarby ladnor |oto| at 0:80 A.V. and oat|ng h|s grano|a. |o p|ays tonn|s at
|oast tour t|mos a wook, usua||y at tho noarby Aron|m|nk C|ub. |o a|ways has h|s go|don rotr|ovor
at h|s s|do, ovon |n tho ott|co.
Vussor drovo tho samo O|dsmob||o 442, w|th b|ackand-wh|to rac|ng str|pos, tor moro than 10
yoars. |o rop|acod |t on|y attor h|s managors to|d h|m no ono o|so at tho company to|t thoy cou|d
buy a now car wh||o tho boss st||| had h|s junkor. |o and h|s t|rst w|to and throo k|ds raro|y
travo|od, oxcopt tor an occas|ona| wookond at tho 1orsoy 3horo or tho|r sma|| houso |n tho
loconos.
°l ||ko my rout|no ot oxorc|so, work, tho go|don rotr|ovor,' loto says. °l protor that to travo||ng to
somo strango c|ty and bo|ng a tour|st.'
loto gavo gonorous|y to tho commun|ty. Whonovor tho 3oy 3couts, |oca| lod Cross or Un|tod
Way woro short ot tunds, loto wou|d como to tho roscuo. |o gavo to 1ow|sh schoo|s ovon though
ho wasn't 1ow|sh, and ho gavo to Catho||c schoo|s ovon though ho wasn't Catho||c. lonn 3tato
namod an aud|tor|um attor h|m and 1omp|o Un|vors|ty croatod an annua| °Vussor Exco||onco |n
loadorsh|p Award.'
ln tho m|d-1000s, loto startod dovo|op|ng a tasto tor dot-com compan|os. |o wasn't a b|g
tochno|ogy usor and to th|s day ho doosn't own a computor and °wou|dn't ovon know how to turn |t
on.' |o rocont|y bought a co|| phono, wh|ch ho |oavos |n h|s car °so l can romombor whoro |t |s.'
Yot Vussor know tho lntornot was go|ng to bo b|g bus|noss. 3atoguard startod tund|ng dozons
ot toch start-ups, ||ko 3anchoz Computor and U.3. lntoract|vo and Cambr|dgo 1ochno|ogy
lartnors, wh|ch qu|ck|y bocamo dar||ngs ot tho stock markot.
Around tho samo t|mo, Vussor's marr|ago startod com|ng apart. ln 1002, Vussor was at a
party at tho |rank||n lnst|tuto and ho spottod |||ary, a s|ondor, 27-yoar-o|d brunotto w|th hazo|
oyos, a w|nn|ng sm||o and sharp bus|noss |nst|ncts. 3ho workod |n tund-ra|s|ng tor |rank||n and
Vussor wa|kod ovor and |ntroducod h|mso|t. Vussor was a major bonotactor tor tho lnst|tuto and
|||ary know |nstant|y who ho was.
1ho two bocamo tr|onds and two yoars |ator, attor h|s d|vorco, thoy startod dat|ng. Vussor
wasn't shy about to|||ng |||ary h|s not worth.
°l th|nk l usod tho numbor $70 m||||on whon wo mot,' Vussor roca||s.
1hoy movod |n togothor |n 100b and bought 3ont|o|d a yoar |ator tor $2 m||||on, spond|ng
anothor $b m||||on or moro on turn|turo and ronovat|ons.
Vussor's ||tosty|o startod bocom|ng moro |av|sh, to tho surpr|so ot many ot h|s o|d tr|onds and
bus|noss co||oaguos. |o and |||ary spont $4 m||||on tor a tour-acro p|oco ot proporty on tho
ocoan |n lantuckot. 1hoy bought a vacat|on houso |n tho loconos, noar Vussor's o|d houso.
1hoy a|so startod tho|r own construct|on company to start bu||d|ng spoc homos |n lantuckot.
|||ary, who had a t|a|r tor |ntor|or dos|gn, bought ont|ro showrooms ot ant|quos |n |ranco and
Eng|and. 3ho had a toam ot art|sts pa|nt |ntr|cato mura|s around tho houso, |nc|ud|ng a Ch|na
|andscapo |n tho d|n|ng room. 3ho t|||od ono ot tho|r guost cottagos |n lantuckot w|th 10th-
contury onamo|waro.
°1horo's no quost|on l changod my ||v|ng standards attor |||ary, bocauso ovorybody knows l
was moro s|mp|o, and you can't arguo w|th that,' loto says. °3ut thoro was a good s|do to |t, that l
got to onjoy boaut|tu| homos and a boaut|tu| ||v|ng.'
|or Chr|stmas, tho coup|o usua||y t|ow to tho |our 3oasons |n lov|s. loto throw a spoc|a| party
tor |||ary's 8bth b|rthday, |nv|t|ng moro than 100 poop|o to lantuckot tor a |obstor bako. 1hoy bu||t
a g|ant danco t|oor on tho |awn and had |t pa|ntod w|th a mura| dop|ct|ng |||ary as a morma|d
bo|ng chasod by loto, a sm|||ng shark.
On lantuckot, thoy bocamo c|oso tr|onds w|th 0onn|s Koz|owsk|, tho 1yco CEO, and h|s w|to,
Karon. 1hat tr|ondsh|p gavo thom a camoo ro|o |n ono ot tho most tamous party v|doos ot a|| t|mo
-a t||m, shown at Koz|owsk|'s tr|a|, ot tho 2001 b|rthday party that 0onn|s throw tor Karon |n
3ard|n|a |n 2001, wh|ch toaturod scant||y c|ad modo|s |n loman att|ro and an |co scu|pturo ot
V|cho|ango|o's Lovlo, spout|ng vodka trom h|s pon|s.
1o shutt|o back and torth trom lantuckot, tho Vussors bought a jot. 3atoguard had an o|d K|ng
A|r that loto somot|mos usod tor bus|noss tr|ps. 3ut |n |ato 1000, ho and |||ary doc|dod to
upgrado to a usod Cha||ongor, wh|ch thoy bought trom |omo 0opot toundor Kon langono. 1hoy
woro ab|o to got tho mu|t|m||||on-do||ar purchaso tu||y t|nancod, so loto cou|d koop a|| h|s monoy
|n stocks.
°Ono ot tho t|rst b|||s wo got tor tho jot was tor a brokon w|ndsh|o|d, wh|ch cost $00,000 to t|x,'
loto says. °lt was outragoous. l was usod to tho K|ng A|r.'
|||ary a|so upgradod h|s wardrobo.
°Whon l mot loto ho woro pants h|kod abovo h|s ank|os, and ho wou|d woar thoso o|d short-
s|oovo sh|rts and wh|to wovon bo|ts. |o had no roa||y n|co c|othos,' sho says. °3o l took h|m to
lo|man Varcus and wo bought h|m a wardrobo, somo sh|rts, pants, a coup|o ot cashmoro
jackots. loop|o commontod that ho |ookod roa||y n|co.'
3ho cou|dn't chango h|s pass|on tor yo||ow swoator vosts. °loto wou|d novor |ot go ot h|s
yo||ow swoator vosts. 3ut l got h|m to woar bottor qua||ty. At |oast now h|s vosts aro cashmoro
cab|o-kn|ts.'
|||ary a|so tr|od to got loto to chango h|s |ncroas|ng|y r|sky |nvostmonts-w|th |oss succoss.
3y tho |ato 1000s, 3atoguard was |nvost|ng |n dozons ot toch start-ups that had °r|ghts ottor|ngs,'
a||ow|ng 3atoguard sharoho|dors to buy sharos at a d|scount botoro tho compan|os wont pub||c.
Ono ot tho oar|y r|ghts ottor|ngs was |n 1008 tor lntornot Cap|ta| Group, wh|ch 3atoguard ho|pod
|aunch w|th a $1b m||||on |nvostmont. Attor lCG wont pub||c, 3atoguard's |nvostmont was worth
moro than $2 b||||on. Vussor and othors who bought tho r|ghts ottor|ng a|so roapod hugo
rowards.
°Attor that, l was hookod,' ho sa|d.
|o borrowod monoy aga|nst h|s 3atoguard stock, known as °borrow|ng on marg|n,' and
bought moro r|ghts ottor|ngs. 1ho borrow|ngs moant ho was tw|co as vu|norab|o to a toch-markot
downturn, s|nco 3atoguard and h|s toch stocks wou|d both tank at tho samo t|mo. 3y oar|y 2000,
h|s marg|n dobt grow to moro than $100 m||||on-a|| ot |t borrowod aga|nst h|s 3atoguard stock.
ln |ato 1000, |||ary startod p|oad|ng w|th h|m to so|| somo ot h|s lntornot stocks or 3atoguard
ho|d|ngs. |o rotusod, say|ng ho wantod to koop a|| h|s monoy °|n p|ay.' |||ary had a|so amassod
a porsona| portto||o worth moro than $100 m||||on-most ot |t lntornot stocks-and sho askod |t
sho cou|d so|| $20 m||||on |n stocks and put tho monoy away tor satokoop|ng.
°l kopt say|ng '|ot's just put somo monoy undor tho mattross' but ho novor ||stonod to mo,' |||ary
says.
loto ovontua||y |ot |||ary co||ar hor stocks, but by thon |t was too |ato. 1ho markot tankod |n
oar|y 2000 and tho|r stocks crashod a|ong w|th |t. |o rotusod to so|| dur|ng tho downturn, toar|ng
that h|s so|||ng wou|d croato turthor doc||nos |n tho sharos ot compan|os ho ho|pod croato.
loto says ho know tho markot was vu|norab|o to a corroct|on. What ho d|dn't oxpoct was a
crash. |o a|so adm|ts ho was b||ndod by h|s opt|m|sm.
°l worr|od about |t, l guoss. 3ut obv|ous|y l d|dn't worry onough.'
||s brokors startod ca|||ng and domand|ng tho|r |oans back. 3|nco ho had borrowod aga|nst
h|s p|ung|ng 3atoguard stock, ho d|dn't havo tho monoy. ln tho ta|| ot 2000, ho sat |||ary down on
tho|r couch |n lantuckot.
°|o sa|d, '|onoy, wo havo a prob|om. 1ho marg|n ca||s aro com|ng tastor than l can moot
thom,'' |||ary roca||s. °l know |t was sor|ous. loto was a|ways qu|ck to to|| mo whon th|ngs woro
good and s|ow to to|| mo whon th|ngs woro bad.'
Evontua||y 3atoguard agrood to |ond h|m $20 m||||on to pay h|s marg|n |oans. 1ho movo ho|pod
loto koop h|s 3atoguard stock and pay back h|s |oans. 3ut |t camo at a pr|co. ln |obruary ot
2000, throo d|roctors-a|| h|s c|osost tr|onds-wa|kod |nto Vussor's ott|co and to|d h|m to ros|gn.
loto and |||ary roturnod tho jot. 1hoy un|oadod somo ot tho|r lantuckot proporty, a|ong w|th
tho loconos houso and tho horso tarm. |||ary cut tho houso statt and startod comb|ng ovor ovory
ut|||ty b|||, |nsuranco p|an and da||y oxponso tor poss|b|o sav|ngs.
Ono morn|ng, loto and |||ary sat |n tho 3atoguard |awyor's ott|co and handod ovor ovory stock
cort|t|cato and assot that loto ownod. |||ary kopt tho|r proport|os, s|nco thoy woro |n hor namo.
°1hat was tho bottom, tho worst momont,' |||ary roca||s. °l to|t horr|b|o, watch|ng h|m s|gn ovor
ovoryth|ng ho ownod.'
loto stoppod go|ng to tho country c|ub. Onco known tor h|s coaso|oss onorgy and sunny
d|spos|t|on, Vussor suddon|y |ookod t|rod and worn. 3omo bus|nosspoop|o startod wh|spor|ng
that Vussor m|ght got accusod ot moro sor|ous chargos, ||ko tho othor troo-spond|ng CEOs ot
Enron, Wor|dCom and Ado|ph|a.
°loop|o startod troat|ng mo d|ttoront|y,' ho says. °1hoy wondorod what o|so was thoro, |t l was
|nvo|vod |n somoth|ng moro sor|ous.'
ln lovombor ot 2000, am|d grow|ng t|nanc|a| prossuros, ho and |||ary marr|od |n a sma||
coromony at 3ont|o|d. 3omo spocu|atod that thoy marr|od tor t|nanc|a| roasons, so loto cou|d
moro oas||y transtor assots. 3ut thoy dony that t|nancos had anyth|ng to do w|th tho t|m|ng.
ln 2001, loto dotau|tod on h|s $20 m||||on |oan to 3atoguard. |o nogot|atod a paymont p|an
w|th 3atoguard and startod try|ng to put h|s ||to back togothor. ln 2004, ho and |||ary d|vorcod tor
what thoy say aro °porsona| roasons.'
1oday, loto hasn't g|von up h|s droam ot |oav|ng th|s wor|d w|th a hugo tortuno. Us|ng h|s
3atoguard connoct|ons and noso tor now opportun|t|os, ho's ho|pod |aunch or ovorhau| sovora|
compan|os that ho hopos w||| y|o|d b|g w|ndta||s. Ono ot thom |s d|ot-tood so||or lutr|/3ystom lnc.,
whoso stock has gono up moro than a hundrodto|d s|nco tho now managomont took ovor.
3ocauso Vussor st||| owos $1b m||||on to 3atoguard, ho |nvostod |n lutr|/ 3ystom through h|s
nonprot|t toundat|on, wh|ch has about $20 m||||on |n assots and |s protoctod trom tho crod|tors.
|o says ho hopos somoday to got h|s tortuno back to at |oast $b0 m||||on.
°A tr|ond ot m|no to|d mo l'd mako that back |n t|vo yoars,' ho says. °3ut that was s|x yoars
ago.'
|||ary |s a|so try|ng to movo on. 3ho bought a homo |n la|m 3oach and st||| owns tho p|aco |n
lantuckot. 3ho's ra|s|ng hor son, runn|ng an |ntor|or-dos|gn bus|noss and bocom|ng an act|vo
ph||anthrop|st and soc|a||to. Whon askod what sho m|ssos trom hor o|d ||to, sho says:
°lot much, roa||y. 1ho jot was tho hardost th|ng to g|vo up. l st||| roa||y m|ss |t.'
On a summor morn|ng |n 2000, loto was g|v|ng a br|ot tour ot 3ont|o|d and po|ntod out a
sh|mmor|ng pond surroundod by t|owors and |ush roods. 1ho pond usod to bo homo to two
trumpotor swans, 3ort|o and Gort|o. |||ary and loto adorod tho b|rds and bought thom a
m|n|aturo v|ctor|an houso to ||vo |n.
1oday, tho ||tt|o houso |s ompty and tho swans aro gono. loto says tho b|rds woro oaton by a
tox.
°1hoy woro torr|t|c swans,' ho s|ghs. °1hoy suro had a happy ||to |n that ||tt|o pond.'


0

BARBAR|AN5 |N
1EE BALLROON

New Money vs. Old

On a warm, broozy n|ght |n la|m 3oach, tho Grand 3a||room ot tho Var-a-lago C|ub |s ab|azo |n
||ghts.
Crysta| chando||ors spark|o trom tho co|||ng, and spot||ghts batho tho g||ttor|ng tab|os |n an
orango g|ow. Go|d carv|ngs adorn tho wa||s, co|||ngs and p|||ars, a|ong w|th rows ot t|oor-to-co|||ng
m|rrors. On tho ma|n stago, tho V|chao| loso Orchostra-b|||od as °3outh ||or|da's most popu|ar
b|g band'-k|cks ott tho t|rst tow bars ot °3tr|ng ot loar|s.'
C|ustors ot wh|to rosos hang trom tho co|||ng, and orch|ds sprout trom tab|o contorp|ocos.
Whon tho d|nnor ch|mos sound, hundrods ot guosts stroam down a rod carpot to mark tho start ot
tho annua| lntornat|ona| lod Cross 3a||.
1horo aro tannod trophy w|vos |n sk|nt|ght 3cass| and lsaac V|zrah| gowns. 1horo aro n|ppod-
and-tuckod soc|a||tos w|th ha|r tho shapo ot cotton candy and jowo|s tho s|zo ot strawborr|os.
1horo aro roa|ostato honchos, sottwaro magnatos, buyout art|sts and monoy managors, a||
dockod out |n wh|to t|os, tuxos and ta||s.
A V|am| dovo|opor chats w|th a pr|vato bankor about ottshoro tax havons. 1ho ambassador
trom Granada touts h|s country's tour|st potont|a| to a rosort dovo|opor. °lt's tho h|ddon gom ot tho
Car|bboan,' ho says. °1h|s |s a ground-t|oor opportun|ty.'
1ack|o 3rad|oy, a buxom b|ondo squoozod |nto a jowo|-oncrustod 1oy Chorry gown, chats w|th
tr|onds about hor now book, 7bo Bombsbo|| Blb|o.
°lt's roa||y moro about my |nnor ||to,' sho says. °l'm hop|ng to uso |t to ho|p othor womon ||ko
mo.'
1horo aro t|aras ovorywhoro. 3|nco tho lod Cross 3a|| |s tho |ast |n la|m 3oach to koop t|aras
|n |ts dross codo, tho crown-crazod soc|oty quoons tako tu|| advantago. 1horo aro 10th-contury
t|aras trom 3r|ta|n and borrowod t|aras trom van C|oot 8 Arpo|s. |ormo do Wyman V|ro, tho
Austr|an soc|a||to, sports a sovon-d|amond t|ara g|von to hor by a lruss|an countoss.
0ona|d 1rump, Var-a-lago's proud ownor, posos tor p|cturos and groots a|| tho guosts. ||s
w|to, Vo|an|a, tho ba||'s °ambassador ot goodw|||,' ottors a|r k|ssos to guosts wh||o tho 0ona|d
d|sponsos w|th h|s dut|os as grand cha|rman tor ambassador|a| ovonts. 1rump |ooks proud|y out
ovor tho ba||room, wh|ch, w|th |ts contoct|onary-wh|to p|||ars and trostod mo|d|ng, rosomb|os a
g|ant wodd|ng cako.
°You ||ko |t?' ho asks mo, not wa|t|ng tor an answor. °Wo modo|od |t attor tho vorsa|||os. You
know, lou|s tho |ourtoonth.'
W|th a b|ar|ng, trumpot tantaro, a troop ot U.3. Var|nos march down tho rod carpot w|th tho
group ot 12 ambassadors. 1ho ||ghts d|m, tho mus|c stops and tho aud|onco proparos tor tho
arr|va| ot tho roa| star ot tho n|ght.
°Wo|como,' says a ta|| and s||vor-ha|rod man |n wh|to t|o and ta||s. °Vy namo |s 3|mon ||roman
and l want to thank you a|| tor com|ng ton|ght.'
Attor a short spooch, ||roman makos h|s way through tho crowd and |s surroundod by wo||-
w|shors. Whon ho passos our tab|o, an o|dor woman w|th a wh|to co|t and s||vor t|ara s|tt|ng to my
r|ght |oans ovor and wh|spors, °1h|s ba|| usod to havo c|ass. l bot you monoy, ||roman w||| mako a
too| ot h|mso|t ton|ght.'
And suro onough, ho doos.

BIuo BIood, Rod Croaaoa

|or a ha|t contury, tho lod Cross 3a|| has boon tho prom|or soc|a| ovont |n la|m 3oach-an
|s|and bu||t oxpross|y tor tho tw|n pursu|ts ot woa|th and part|os. Each yoar, on tho |ast 3aturday |n
1anuary, hundrods ot tho |s|and's r|chost and most co|obratod soc|a||tos gathor tor a n|ght ot
dr|nk|ng, danc|ng and donat|ng to tho lod Cross causo.
1ho ba|| |s stoopod |n la|m 3oach h|story, hav|ng boon |aunchod |n 10b7 by Varjor|o
Vorr|woathor lost, tho coroa| ho|ross and h|gh pr|ostoss ot O|d la|m 3oach soc|oty. Evor s|nco,
|t has ro|gnod supromo ovor tho hundrods ot char|ty ovonts ho|d ovory w|ntor on tho |s|and. lt's tho
on|y ba|| that ma|nta|ns a dross codo ot wh|to t|o and t|ara, and |t's tho on|y ono that sports
trad|t|ons ||ko tho pha|anx ot ambassadors and troops ot mar|nos.
|or docados, noth|ng symbo||zod la|m 3oach's b|uob|ood cu|turo ||ko tho lod Cross 3a||.
Attor lost passod on, tho lod Cross torch was passod trom ono soc|oty quoon to anothor, a|| ot
whom mado suro that on|y tho °r|ght' poop|o |n la|m 3oach woro |nv|tod. 0ur|ng tho 1070s and
1080s, l|stor|no ho|ross 3uo Wh|ttmoro took chargo, mak|ng suro that tho ||st was dom|natod by
|uttons, 0u lonts, |oarsts and Wh|tnoys (a|though occas|ona| oxcopt|ons woro mado tor
°othn|c' typos ||ko 1acquo||no Konnody or Estoo laudor).
1ho job ot tho lod Cross cha|rman was cons|dorod tho h|ghost soc|a| honor |n la|m 3oach,
whoro soc|oty damos trom Ch|cago, low York, 3oston and lh||ado|ph|a had boon spond|ng
tho|r w|ntors s|nco tho oar|y 1000s. 1ho ba|| °cha|rmon' woro a|ways womon, and a|ways ho|rs to
prom|nont tam|||os. And |n la|m 3oach's h|gh|y matr|archa| cu|turo, asp|r|ng soc|a||tos workod
tho|r way up a comp||catod |addor ot |unchos, ba||s, c|ubs and d|nnors |n hopos ot ono day
cha|r|ng tho|r own ba||. 1ho grandost pr|zo ot thom a|| was tho lod Cross.
°You d|dn't just show up and bocomo cha|rman,' says ono ot la|m 3oach's o|d-guard
soc|a||tos. °You workod at |t tor a |ong t|mo to oarn tho crodont|a|s.'
1h|s proud trad|t|on ho|pod oxp|a|n why, |n 200b, tho lod Cross 3a|| suddon|y bocamo tho
contor ot ono ot tho most hoatod batt|os ovor to h|t la|m 3oach soc|oty.
1ho man who startod |t a|| was 3|mon ||roman, a hard-dr|v|ng 3oston|an who mado h|s
m||||ons trom |nt|atab|o poo| toys. 3orn to luss|an |mm|grants |n tho b|uo-co||ar 3oston
no|ghborhood ot 0orchostor, ||roman has a ponchant tor chunky jowo|ry, br|ght|y co|orod t|os and
porsona| pross ro|oasos.
Attor mak|ng a namo tor h|mso|t |n tho lorthoast, ||roman movod to la|m 3oach v|a 3oca
laton |n 2008 and sot out to sca|o tho ho|ghts ot |oca| soc|oty. |o bought a spraw||ng mans|on
on tho ocoan tor moro than $0 m||||on. |o acqu|rod a |oca| rostaurant and spont moro than $1
m||||on to turn |t |nto a posh Ch|noso |oungo and |oca| hangout, ca||od CoCo's. |o jo|nod Var-a-
lago and bocamo a t|xturo on tho pat|o, w|th a co|d scotch and h|s scrappy ass|stant, 3umnor
Kayo (n|cknamod °V|n|-3|mon'), a|ways at h|s s|do.
A ta|| man, w|th a mano ot wh|to ha|r, a 3oston twang and boach tan, ||roman has novor boon
shy about oxto|||ng h|s v|rtuos. ln 200b, ho comm|ss|onod a spoc|a| |ssuo ot Po|m Boocb 5ocloty
magaz|no dovotod to h|s ||to and ach|ovomont. 1ho covor hoad||no road: °3|mon ||roman:
lnnovator, loador, |uman|tar|an.'
|o |s moro rot|cont whon |t comos to ta|k|ng about h|s |oga| past. ln 1000 todora| |nvost|gators
tound that ho had tunno|od $20,000 to tho pros|dont|a| campa|gn ot 3ob 0o|o by mak|ng
donat|ons through Aqua-lo|suro omp|oyoos. 1ho |nvost|gat|on a|so rovoa|od ho had |mpropor|y
channo|od monoy to tho 1002 3ush-Ouay|o campa|gn and othor po||t|c|ans. ||roman p|od gu||ty,
and ho and h|s t|rm pa|d $0 m||||on |n t|nos. |o spont s|x months undor houso arrost.
||roman ma|nta|ns ho d|dn't know about tho contr|but|ons, wh|ch ho sa|d woro hand|od by an
undor||ng, and that ho p|od gu||ty to avo|d a drawn-out |oga| batt|o. |o |ator wroto a book argu|ng
that ho was an |nnocont v|ct|m ot po||t|ca| attacks.
Whon ho got to la|m 3oach, ||roman sought to robu||d h|s |mago, us|ng char|ty as tho ma|n
too|. |o donatod to arts groups, |oca| hosp|ta|s and most ot tho major ba||s. At char|ty ovonts, ho
bocamo known tor grabb|ng tho m|crophono at tho ond ot tho n|ght and announc|ng p|odgos ot
$20,000 or moro. Wh||o char|tab|o donat|ons havo a|ways boon tho ma|n curroncy tor acqu|r|ng
soc|a| status |n la|m 3oach, ||roman's t|amboyancy and so|t-promot|on wont a stop too tar tor
tho O|d Guard.
°3|mon ||roman g|vos to bonot|t 3|mon ||roman,' says ono |oad|ng soc|a||to.
||roman |ns|sts ho g|vos trom tho hoart. Ovor |unch at Var-a-lago ono attornoon, ho to|d mo
that g|v|ng to othors |s h|s groatost joy. 1o provo |t, ho pu||od trom h|s jackot pockot a two-pago
sproadshoot ot a|| h|s char|tab|o donat|ons tor ovor a docado, wh|ch ho sa|d l was troo to pub||sh.
°l can't ho|p myso|t,' ho sa|d. °Whon l soo pa|n and troub|o |n tho wor|d, l havo to g|vo. 1h|s
powor ovorcomos mo.'
ln 2008, ||roman's concorn tor tho wor|d's troub|od a|so ho|pod h|m scoro h|s groatost soc|a|
coup. |o p|odgod $1 m||||on to tho lod Cross 3a||, |ts |argost g|tt ovor. 1ho lod Cross abrupt|y
t|rod tho ba||'s popu|ar cha|r, 0|ana Ecc|ostono, and mado ||roman cha|rman.
la|m 3oach soc|oty was outragod. 1hoy accusod ||roman ot bo|ng a showy arr|v|sto try|ng to
buy h|s way |nto soc|oty. 1hoy a|so b|amod tho lod Cross tor rudo|y t|r|ng Ecc|ostono. 3ovora|
top soc|a||tos and donors boycottod tho ba||, opt|ng to go to a compot|ng ba|| tho samo n|ght tor
battorod ch||dron. Othor donors sca|od back tho|r donat|ons.
°Vr. ||roman's bohav|or |sn't what most poop|o |n la|m 3oach aro w||||ng to to|orato,'
Ecc|ostono to|d mo.
||roman shot back that tho O|d Guard was just try|ng to koop out now b|ood.
°loop|o horo aro worr|od that thoy havo to doa| w|th a powortu| torco. la|m 3oach can bo a
c|osod soc|oty. You'ro not a||owod |nto corta|n |nnor c|rc|os.'
3t|||, ||roman |gnorod tho cr|t|cs and romado tho ba|| |n h|s |mago. |o movod |t trom |ts
|ongt|mo homo at tho h|stor|c 3roakors hoto| to 1rump's moro b||ng-tr|ond|y Var-a-lago. |o
spont |av|sh|y, pay|ng $700,000 tor tood, docorat|ons and ontorta|nmont, |nc|ud|ng $200,000 to
br|ng |n croonor lo|| 3odaka. 3ocauso ot tho b|g b|||s, tho lod Cross took |n on|y $1.7 m||||on
trom tho 200b ba||-|oss than ||roman's statod goa| ot $2 m||||on.
3|nco so tow la|m 3oachors attondod, ||roman wound up t||||ng tho tab|os w|th tr|onds trom
3oston, Wash|ngton and 3oca. la|m 3oachors startod rotorr|ng to tho ovont as tho °||roman
|r|onds and |am||y 3a||.'
3ut tho t|na| straw camo dur|ng h|s koynoto spooch dur|ng tho 200b ba||. 3tr|d|ng up to tho
pod|um, ||roman boastod that ho had ra|sod moro monoy, |andod moro ambassadors and
thrown a bottor ba|| than Ecc|ostono.
°Wo havo 10 ambassadors th|s yoar, |ast yoar thoy had s|x,' ho sa|d. °Wo ra|sod $2 m||||on,
|ast yoar thoy ra|sod $1 m||||on.'
1ho spooch was a stunn|ng broach ot la|m 3oach docorum, wh|ch ho|d that cha|rmon novor
spoko ||| ot othor cha|rmon, |ot a|ono boast about tho|r own succossos. Ecc|ostono and othors
woro tur|ous. 1hoy sa|d ||roman hadn't ra|sod as much monoy as ho c|a|mod, s|nco most ot |t
camo out ot h|s own pockot. As tor tho ambassadors, Ecc|ostono sa|d tho |mportant
cons|dorat|on was °qua||ty not quant|ty.' |or lod Cross 3a|| ambassadors, sho sa|d, ha||od
ma|n|y trom Europoan countr|os, wh||o h|s |nc|udod °3yr|a and Guyana.'
°1ust bocauso you g|vo a |ot ot monoy,' Ecc|ostono sa|d, °doosn't moan you can stand up and
mako a jork ot yourso|t.'

1ho FaII trom Craco

At tho 2000 ba||, howovor, la|m 3oach soc|oty got |ts |ast |augh. 1ho ba|| startod qu|ot|y onough.
Vost ot tho attondoos woro doctors, |awyors or accountants trom 3oston or southorn ||or|da, and
thoy |ookod not|coab|y uncomtortab|o |n torma| dross, w|th sagg|ng bow t|os and ovor|y putty
drossos. Ono |ongt|mo la|m 3oachor sa|d to mo: °last yoar, thoro woro poop|o horo trom 3oca,
and that was bad onough. 3ut th|s yoar |t's 0o| loy. Can you bo||ovo |t? 0o| loy?'
1ho ambassadors woro oqua||y contusod, wandor|ng around ||ko |ost d|gn|tar|os. Granada |ott
oar|y to party at tho |oca| bars unt|| 2 A.V. and l|thuan|a and l|ochtonsto|n stayod at tho|r tab|os
most ot tho n|ght. 1ho guosts munchod qu|ot|y on tho|r voa| chops, cubod swoot potatoos, root
vogotab|os and buttor patt|os shapod ||ko crossos. |rank|o Ava|on sang °3oach 3|ankot 3|ngo'
and othor 10b0s h|ts. ln tho yoar ot |urr|cano Katr|na, tho lod Cross toutod |ts good works by
honor|ng lotra lomcova, tho Czoch sw|msu|t modo| who woathorod tho As|an tsunam|.
°lt |t was As|a yostorday, tomorrow wo m|ght nood your ho|p somowhoro o|so,' sho sa|d,
sm|||ng |n hor 3adg|oy V|schka gown. °1hank you tor ho|p|ng othors and sproad|ng tho |ovo.'
1ust whon tho guosts thought tho ba|| wou|d ond w|thout |nc|dont, ||rostono's ass|stant,
3umnor, stood up and mado a rous|ng spooch |n pra|so ot h|s boss.
°3|mon ||roman |s a wondortu| human bo|ng, a groat bonotactor and a groat |oador,' Kayo
sa|d to tho crowd. °||s g|tt ot $1 m||||on |s tho |argost ovor g|von to a lod Cross ba||. . . . Vr.
||roman |s tho pr|mo |oador. |o do||vors. l am so proud ot our |oadorsh|p.'
1ho crowd ottorod mutod app|auso.
As ovoryono was pack|ng up tho|r jowo|od c|utchos and g|tt bags to |oavo, ||roman startod
mak|ng h|s way to tho stago, c|oar|y t|psy attor a n|ght ot co|obrat|ng and honorar|ums. As ho
startod up tho stops, ho |ost h|s toot|ng, caroonod ott tho stago and to|| taco-t|rst onto tho marb|o
t|oor.
1ho supormodo| scroamod. 1ho mar|nos chargod to tho roscuo. 1h|s bo|ng tho lod Cross
3a||, sovora| t|rst rospondors dashod to tho scono and startod adm|n|stor|ng t|rst a|d. ||roman |ay
on tho t|oor, consc|ous but b|ood|ng. 1ho mar|nos ||ttod h|m up and carr|od h|m out ||ko a
woundod so|d|or to an ambu|anco, wh|ch wh|skod h|m to tho hosp|ta|. |o was troatod that n|ght
tor two b|ack oyos and mu|t|p|o tracturos |n h|s noso.
||roman qu|ck|y rocovorod and was back on tho samo stago a tow wooks |ator host|ng anothor
ba||. 3ut tho O|d Guard was do||ghtod. 3|mon ||roman, tho brash arr|v|sto who spont m||||ons to
roach tho top ot la|m 3oach soc|oty and bo ||ko thom, had ||tora||y ta||on on h|s taco.

Now Nonoy and No Nonoy

1ho tons|ons botwoon O|d Vonoy and low Vonoy havo boon around |ong botoro tho 1h|rd
Wavo. ln anc|ont Grooco, tho |andod woa|thy ropoatod|y toudod w|th low Vonoy, who woro
tradors mak|ng tho|r tortunos trom |mport|ng and oxport|ng |uxury goods ||ko sp|cos, portumos
and ||nons. Chostor 3tarr, tho Grook h|stor|an, wroto that tho Grook nouvoaux, at tho samo t|mo
thoy woro try|ng to vanqu|sh tho O|d Guard, woro a|so dosporato to bo accoptod |n tho|r soc|a|
c|rc|os. |o wr|tos, °. . . tho kako| (nouvoaux) who ga|nod woa|th and stand|ng sought to |m|tato tho
ar|stocrats soc|a||y, and th|s soc|a| assort|vonoss was probab|y tho|r most |rr|tat|ng charactor|st|c
|n nob|o oyos, ovon |t |t was a comp||mont.'
Ar|stot|o, who condomnod a|| woa|th as °|nso|ont and arrogant,' had ospoc|a||y harsh words tor
tho now|y woa|thy: °1horo |s a d|ttoronco botwoon tho charactor ot tho now|y r|ch and ot thoso
whoso woa|th |s ot |ong stand|ng, bocauso tho tormor havo tho v|cos ot woa|th |n a groator
dogroo and moro, tor, so to say, thoy havo not boon oducatod to tho uso ot woa|th. 1ho|r unjust
acts aro not duo to ma||co, but part|y to |nso|onco, part|y to |ack ot so|t contro|, wh|ch tonds to
mako thom comm|t assau|t and battory and adu|tory.'
1ho batt|o botwoon O|d Vonoy and low Vonoy was ospoc|a||y t|orco dur|ng tho |ato 1800s
and oar|y 1000s, whon tho |ndustr|a| and ra||road tortunos ot tho low Wor|d startod cha||ong|ng
tho |andod ar|stocracy ot Europo. ln Anthony 1ro||opo's tamous 7bo ¼oy ¼o Llvo Now, a
traudu|ont |ronch t|nanc|or, Augustus Vo|motto, tr|os to c|aw h|s way up tho ranks ot 3r|t|sh
soc|oty by throw|ng a |av|sh party tor tho Ch|noso omporor and buy|ng h|s way |nto lar||amont.
1ho cash-starvod gontry covot Vo|motto's monoy but d|sda|n h|s |ack ot brood|ng and nakod
amb|t|on.
°l d|s||ko thoso who sook tho|r soc|oty s|mp|y bocauso thoy havo tho roputat|on ot bo|ng r|ch,'
says logor Carbury, a proud ar|stocrat. °l |ook at h|m as d|rt |n tho guttor.'
1ho Amor|can t|tans ot tho G||dod Ago, who a|so had moro cash than soc|a| gracos, woro
constant|y sook|ng tho accoptanco and adm|rat|on ot tho Europoan roya|s. Corno||us
°Commodoro' vandorb||t, tho uncouth torry capta|n, was raro|y |nv|tod to part|os bocauso ot h|s
ponchant tor sp|tt|ng and p|nch|ng tho sorv|ng g|r|s. 1ohn 1acob Astor, who startod out trad|ng
boavor po|ts tor a ||v|ng, tamous|y w|pod h|s hands on h|s hostoss's dross at ono soc|a| ovont. Yot
low Vonoy can qu|ck|y bo c|oansod ot |ts d|rty or|g|ns: Vs. Astor bocomo low York's ro|gn|ng
soc|oty quoon, w|th hor tamous °400' ||st ot accoptab|o low York party |nv|toos.
1oday, l|ch|stan|s aro a|so crash|ng tho gatos ot h|gh soc|oty and spark|ng a ronowod batt|o
botwoon O|d and low Vonoy. l|ko tho|r G||dod Ago toroboars moro than a contury ago,
l|ch|stan|s aro pour|ng |nto tho nat|on's woa|thy commun|t|os and croat|ng a now soc|a| h|orarchy
bu||t on monoy and moro monoy, rathor than brood|ng and ||noago.
1hoy'ro bu||d|ng g|ant homos to oc||pso tho o|d ostatos |n la|m 3pr|ngs, Vartha's v|noyard,
la|m 3oach and Groonw|ch, Connoct|cut. 1hoy'ro ||n|ng up to jo|n tho h|stor|c go|t c|ubs, yacht
c|ubs, po|o c|ubs and |unch c|ubs, and whon thoy can't got |n (and thoy usua||y can't) thoy'ro
start|ng c|ubs ot tho|r own.
1hoy'ro mak|ng a run tor char|ty boards, art musoums, c|ty opora compan|os and |oca|
onv|ronmonta| groups. 1hoy'ro buy|ng tho nam|ng r|ghts to a|| sorts ot pub||c |nst|tut|ons, trom
hosp|ta|s and parks to stad|ums and ||brar|os. ln 200b, low York t|nanc|or lona|d O. loro|man
bought tho nam|ng r|ghts to tho ma|n stago at Carnog|o |a||, now ca||od tho lona|d O. loro|man
|am||y 3tago. 1hat to||owod tour othor °nam|ng' doa|s at Carnog|o, |nc|ud|ng tho 1udy and Arthur
Zanko| |a|| and tho 1oan and 3antord l. Wo||| loc|ta| |a||.
|or l|ch|stan|s, gott|ng |nto tho 5oclo| Roglstor |s passo, not to mont|on |mposs|b|o. 3o
thoy'ro o|bow|ng tho|r way |nto a now crop ot van|ty magaz|nos ||ko lomptoos, Aspoo Pook and
Oo|ísboro Llío, wh|ch havo bottor party photos and pago attor pago ot now bo|dtaco namos.
Groonw|ch, Connoct|cut-onco a qu|ot, b|uo-b|ood bodroom commun|ty tor Vanhattan |awyors
and doctors-has bocomo a hodgo-tund p|ayground t|||od w|th t|ashy b||||ona|ros. loca| hous|ng
pr|cos havo skyrockotod, ma|n|y trom hodgo-tund buyors. Ou|ot catos that usod to host tho
|ad|os-who-|unch crowd havo boon ovorshadowod by dos|gnor tood pa|acos ||ko l'Esca|o, wh|ch
sorvos cr|spy duck w|th gr|||od p|noapp|o and has a pat|o ovor|ook|ng a now yacht c|ub. 1ho o|d
yacht c|ub, lnd|an |arbor, |s bow|ng to prossuro (and monoy) to host ovonts ||ko °3ormuda l|ght'
tor tho |oca| hodgo-tund assoc|at|on.
longt|mo Groonw|chors roso up |n arms |n 2000 aga|nst a gargantuan homo proposod by
hodgo-tund managor 1osoph 1acobs. los|donts sa|d tho 80,000-squaro-toot homo was too b|g
-no sma|| accusat|on |n a town t|||od w|th 10,000-squaro-toot mans|ons. 1ho houso toaturod 11
bodrooms, 10 bathrooms and a 8,000-squaro-toot gym comp|oto w|th squash court, go|t
s|mu|ator, massago room, boauty par|or and |ndoor poo|. 1acobs's homo to||owod tho 80,000-
squaro-toot homo bu||t by 3AC's toundor, 3tovon Cohon, who has h|s own |ndoor baskotba||
court, |co r|nk and porsona||zod Zambon|.
1ho |s|and ot lantuckot, onco known tor sh|ng|od shacks and c|am d|ggors, has bocomo a
showp|aco tor mogamans|ons and 200-toot yachts. lt's a|so bocomo tho |and ot duo||ng country
c|ubs. 3hut out ot tho o|d c|ubs, l|ch|stan|s doc|dod to croato tho|r own. 1ho now lantuckot Go|t
C|ub |s charg|ng up to $400,000 tor momborsh|ps. Wostmoor, a now soc|a| c|ub housod on tho
o|d vandorb||t ostato, chargos $2b0,000 tor momborsh|p and toaturos a spa, squash courts and
pr|vato thoator. Anothor group ot l|ch|stan|s havo gotton togothor to bu||d tho Groat |arbor Yacht
C|ub, wh|ch wou|d havo s||ps tor 40 boats a|ong tho watortront and a modorn c|ubhouso w|th a
poo| and rostaurant. lt's a|roady so|d moro than 200 momborsh|ps at $200,000 oach, and
mombors |nc|udo Ab|ga|| 1ohnson, tho b||||ona|ro daughtor ot tho ||do||ty lnvostmonts toundor,
and truck|ng magnato logor lonsko.
1ho touds aro dr|von by tho surg|ng popu|at|on ot l|ch|stan|s and |ts vast woa|th, wh|ch has tar
surpassod |ts O|d Vonoy countorparts. Among tho nat|on's r|chost 1 porcont, |nhor|tod woa|th
accountod tor on|y 0 porcont ot tho|r comb|nod tota| not worth |n 2001, down trom 28 porcont |n
1080. On|y a th|rd ot tho nat|on's r|chost 1 porcont havo roco|vod any |nhor|tanco or g|tt, down
trom moro than ha|t |n 1080.
As a pr|vato bankor |n la|m 3oach oxp|a|nod to mo: °lt you woro a 0u lont |n la|m 3oach w|th
$7 m||||on a tow yoars ago, you woro do|ng protty wo||. You had a mans|on, you had n|co cars,
you wont to tho char|ty ba||s, you had powor. low, w|th $7 m||||on, you'ro probab|y tho poorost guy
on tho b|ock and tho guy noxt to you |s bu||d|ng a houso throo t|mos as b|g. l|to |sn't so tun
anymoro.'
1ho batt|o |s a|so cu|tura|. 1ho o|d ru||ng o||to, dom|natod by tho lrotostant ostab||shmont, lvy
loaguo schoo|s, tho 5oclo| Roglstor, Va|n l|no lh||ado|ph|a, 3oston 3rahm|ns and low York
bankors and |aw t|rms, has boon crumb||ng tor moro than 40 yoars. E. 0|gby 3a|tzo||, who co|nod
tho torm °WA3l,' prod|ctod r|ght|y |n 7bo Protostoot Estob|lsbmoot that tho ru||ng o||to bocamo
too |nsu|atod trom tho outs|do wor|d to roma|n compot|t|vo |n a tast-chang|ng oconomy.
1oday, lnstapronours como trom a|| wa|ks ot ||to, and thoro |s no |dont|t|ab|o °ru||ng c|ass' or
s|ng|o sot ot va|uos among tho now|y woa|thy. Wh||o O|d Woa|th pr|dod |tso|t on modosty,
trad|t|on, pub||c sorv|co, char|ty and soph|st|catod |o|suro, l|ch|stan|s pr|do thomso|vos on tho|r
m|dd|o-c|ass oth|c, so|t-mado tortunos and b|g spond|ng.
Yot tho two a|so nood oach othor. As tho author and ho|r lo|son A|dr|ch sa|d to mo: °lt you'ro
low Vonoy, you havo th|s droam that ono day tho 0av|d lockoto||or ot your town w||| sp|n
through tho lo|odox and t|nd your namo. And ho'|| ca|| you up and say 'l nood somo monoy trom
you.' And you'|| g|vo h|m somo, and now you'ro |n.'
lowhoro aro tho tons|ons and attract|ons moro dramat|c than |n la|m 3oach, tho trop|ca|
sandbox tor tho suporr|ch s|nco tho oar|y 1000s.

Boach BIankot BiIIionairoa

Evor s|nco |onry Vorr|son ||ag|or, tho 3tandard O|| baron, turnod a patch ot ||or|da swamp |nto
an |s|and parad|so, la|m 3oach has boon tho w|ntor p|ayground tor tho nat|on's o||to. 1ho tour-
squaro-m||o |s|and has ono ot tho nat|on's h|ghost concontrat|ons ot woa|th, at |oast botwoon
Chr|stmas and Eastor, whon tho popu|at|on swo||s trom 10,000 to ovor 40,000.
lt's a|so known tor |ts h|gh concontrat|on ot scanda|, start|ng trom whon ||ag|or |ott h|s monta||y
||| w|to, lda A||co, to marry a 24-yoar-o|d, to Varjor|o Vorr|woathor lost's d|vorco trom E. |.
|utton attor t|nd|ng h|m cavort|ng w|th a chamborma|d |n tho|r bodroom at Var-a-lago. 1ho X-
ratod ant|cs ot tho lu||tzors and tho rapo tr|a| ot W||||am Konnody 3m|th (ho was acqu|ttod)
provod that ovon through tho 1080s, la|m 3oach's sox scanda|s, ||ko tho |ast namos, hadn't
changod.
l|ch|stan|s, howovor, aro rad|ca||y romak|ng la|m 3oach. 1ho now la|m 3oach |s youngor,
r|chor and hardor work|ng. Among tho now bo|dtaco namos on tho |s|and |s |oward Koss|or, a
crod|t-card magnato trom 3oston, and h|s w|to, V|cho|o, who bought a $80 m||||on homo |n 1000.
ln 2000, tho Koss|ors hostod tho Cancor 3a|| and mado |t tho |s|and's top soc|a| ovont. 3ydo||
V|||or, tho C|ovo|and ha|rsty||st who toundod Vatr|x |a|r Essont|a|s, bu||t a 80,000-squaro-toot
mans|on on tho |s|and and has a|so bocomo a |oad|ng bonotactor (though tho O|d Guard st||| ca||s
hor °tho shampoo |ady'). la|m 3oach's othor now notab|os |nc|udo concort promotor 1on 3to||
and h|s soc|a||to w|to, lor|, to|ocom ontropronour 0an 3or|s|ow, and 0|ck lob|nson, who
toundod a rad|o-broadcast|ng schoo|.
la|m 3oach's narrow stroots aro now jammod w|th 3ont|oy G1s, lo||s-loyco lhantoms and
lorscho Cayonnos. Worth Avonuo, tho ma|n rota|| str|p, usod to bo a homoy co||oct|on ot upsca|o
mom-and-pops so|||ng |ronch ||nons, ant|quos and jowo|ry. low |t's an ons|aught ot |uxury brands
and stark w|ndows that d|sp|ay a s|ng|o $8,000 Gucc| bag or $b00 |ormos scart.
lnvostor |onry Krav|s pa|d $b0 m||||on tor a houso on tho lntracoasta| Watorway-a rocord
pr|co tor a nonocoantront proporty |n ||or|da, brokors say. 1hat was toppod |n 200b whon
construct|on magnato 0w|ght 3char bought lon loro|man's ostato |n two doa|s tota||ng $00
m||||on, mak|ng |t tho most oxpons|vo pr|vato-homo sa|o ovor |n tho Un|tod 3tatos.
0ona|d 1rump, not to bo outdono, |n 2000 ||stod a homo on tho |s|and tor $12b m||||on. 1ho
00,000-squaro-toot ostato, ca||od Va|son do |'Am|t|o, was ownod by hoa|th-caro magnato Abo
Gossman, who wont bankrupt. l|ch|stan|s |n la|m 3oach havo startod buy|ng two or throo
adjacont proport|os and putt|ng thom togothor to bu||d b|ggor and b|ggor homos. Ovor tho past
20 yoars, tho numbor ot s|ng|o-tam||y homos |n la|m 3oach has shrunk to 2,b00 |n 2000 trom
8,008 |n 1080, duo |n part to |and morgors and |argor ostatos. Koch lndustr|os ho|r 0av|d Koch
bought up throo |ots to bu||d h|s 00,000-squaro-toot mans|on, wh|ch has ono ot tho |argost w|no
co||ars |n tho country.
O|d la|m 3oachors usod to arr|vo tor tho °soason'-tho tour-month por|od botwoon Chr|stmas
and Eastor-and raro|y d|d any work on tho |s|and, s|nco most ot thom woro ho|rs, rot|roos or
vacat|onors. low l|ch|stan|s stay a|most yoar-round so thoy can c|a|m ros|doncy and tako
advantago ot ||or|da's |ow taxos. Vost run tho|r bus|nossos trom tho|r poo| cha|rs, us|ng |aptops,
co|| phonos and an army ot ass|stants.
°l ||ko tho ||tosty|o, but my t|rst pr|or|ty horo |s mak|ng monoy,' says 3or|s|ow, a 40-somoth|ng
to|ocom ontropronour who dr|vos around town b|ast|ng rap tunos trom h|s convort|b|o 3ont|oy.
°loop|o usod to como horo to rot|ro. l'm st||| hungry. l st||| havo moro to provo.'
la|m 3oach's most popu|ar d|n|ng spot usod to bo tho lot|to Varm|to-a shabb||y o|ogant
cato known tor |ts voa| cordon b|ou and past v|s|ts by Europoan roya|ty. low, tho hot hangout |s
1ho la|m 3oach Gr|||, a sprucod-up |ouston's lostaurant known tor |ts burgors and boor.
1ho a||-powortu| country c|ubs, wh|ch d|v|dod tho |s|and by raco and ro||g|on, aro bocom|ng |oss
and |oss ro|ovant. 1ho ru|os may bo tho samo-tho la|m 3oach 3ath 8 1onn|s C|ub and tho
Evorg|ados C|ub st||| havo tow |t any 1ow|sh mombors, and tho la|m 3oach Country C|ub
roma|ns a|most oxc|us|vo|y 1ow|sh-yot tho low Vonoy protors Var-a-lago, wh|ch takos anyono
w||||ng to pay tho $1b0,000 momborsh|p too, rogard|oss ot ro||g|on or |ast namos.
Whon l wont tor |unch ono day at 3ath 8 1onn|s (dubbod °3od 3ath 8 3oyond' by tho nouvoaux
bocauso ot |ts ag|ng momborsh|p), tho c|ub was t|||od w|th s||vor-ha|rod propp|os |n wh|to
swoators, po|o sh|rts and khak|s, and tho b|g attract|on tor tho day was a br|dgo c|ass. 1ho
rostaurant |ookod ||ko a h|gh-schoo| catotor|a, w|th |unch |ad|os stand|ng boh|nd a buttot tab|o
do||ng out broadod t|sh t|||ots and stoamod corn.
At tho noxt-door Var-a-lago, tho |unch crowd |ooks moro domocrat|c-w|th tam|||os |n swoat
su|ts, s||ckodback roa|-ostato agonts and p|zza-tranch|so k|ngs trom Oh|o.
3ays 1rump: °1ho tact that tho othor c|ubs aro so rostr|ct|vo has boon groat tor mo. lt's ono ot
tho ma|n roasons wo'ro so succosstu|.'
Grantod, somo th|ngs havon't changod |n la|m 3oach. 1ho soc|a| ca|ondar roma|ns ono ot tho
bus|ost |n tho wor|d, ottor|ng moro tr|vo|ous ovonts por day than most major c|t|os. 0ur|ng a wook
|n la|m 3oach l wont to throo char|ty ba||s, ton cockta|| part|os, two d|nnors, a champagno
brunch, a po|o match and a Voroccan couscous party. (l just m|ssod tho annua| pot parado.)
And tor a|| tho ta|k about rojoct|ng tho O|d Guard, tho now arr|va|s soom oqua||y |ntorostod |n
ro-croat|ng tho|r wor|d. 1ho noarby town ot Wo|||ngton has bocomo a horso havon, w|th two now
po|o c|ubs, ono ownod by Outback 3toakhouso toundor 1|m Gannon, and tho othor |aunchod by a
1oxas dovo|opor.
3oc|a| stand|ng roma|ns hugo|y |mportant, ospoc|a||y to tho amb|t|ous, young socond w|vos
who now dom|nato tho party scono. 1horo aro now throo pub||cat|ons covor|ng la|m 3oach
soc|oty-Po|m Boocb 5ocloty, t ho Po|m Boocb Lol|y Nows and Po|m Boocb 7oooy-as
pub||c|ty and t|attor|ng party photos havo bocomo powortu| too|s tor soc|a| o|ovat|on. la|m
3oachors wa|t anx|ous|y ovory Wodnosday and 3unday morn|ng tor tho soc|oty co|umn wr|tton by
tho Lol|y Nows's 3hannon 0onno||y, arguab|y tho |s|and's most powortu| journa||st.
lncroas|ng|y, though, la|m 3oach |s bocom|ng two |s|ands-a qu|ot, tad|ng tam||y ot O|d
Vonoy ho|rs and a 24-hour boach party ot troo-spond|ng upstarts. lt |s tho now wor|d ot Goorgo
C|out|or, and tho o|d wor|d ot |rank 3ut|or ll.

1ho 5otting 5on and tho Putt Daddy

|rank||n Osgood 3ut|or ll |s propar|ng tor toa.
lt's a |ato 1hursday morn|ng |n 1anuary and 3ut|or, a dappor, 78-yoar-o|d sc|on ot Ch|cago's
3ut|or tam||y, |s scurry|ng around h|s ramshack|o mans|on. |o's supposod to host two toas on
Vonday, ono tor tho |ronch 3oc|oty ot la|m 3oach and tho othor tor tho lat|ona| lrosorvat|on
Assoc|at|on. Yot h|s houso |s a moss.
1ho ||v|ng room drapos aro p||od on tho t|oor, tho co|||ng |s covorod w|th wator sta|ns, and
thoro's a b|g ho|o |n tho wa|| whoro tho bay w|ndow usod to bo. Vost ot tho damago |s trom a
rocont hurr|cano. 3ut as l wa|k through tho houso |t's hard to to|| what's bo|ng ropa|rod, what's
undor construct|on and what's ta|||ng down trom nog|oct.
3ut|or |s a choortu|, oxport|y mannorod man who says th|ngs ||ko °that was Vothor's mothor, tho
countoss.' |o |s ta|| and tr|m trom a ||tot|mo ot po|o, yacht|ng and sw|mm|ng, and ho woars
custom-ta||orod dross sh|rts w|th torma| w|ng co||ars. ||s vo|co has a gont|o warb|o, somowhoro
botwoon oar|y Kathar|no |opburn and |ato 1u||a Ch||ds.
3ut|or's tam||y ownod tho vast tract ot |and noar Ch|cago that bocamo Oak 3rook, l|||no|s, and
tho 3ut|or namo |s p|astorod a|| ovor tho |oca| schoo|s, ott|co bu||d|ngs, parks and go|t and po|o
c|ubs. |o's vaguo about h|s jobs throughout ||to, but says ho onco ran tho tam||y's av|at|on
bus|noss. |o's a|so a staunch lopub||can who says °wo|taro |s a wasto ot monoy.'
3ut|or novor marr|od and ho's st||| an av|d soc|a||to, ovon |t h|s soc|a| c|rc|os roma|n doc|dod|y
o|d schoo|. On a n|ght whon most ot tho nouvoaux woro hoadod to tho lmpor|a| Cancor 3a|| at tho
3roakors, hostod by tho Koss|ors, 3ut|or was pr|mp|ng tor tho Co|on|a| Wars/0amos ot Amor|ca
0|nnor 0anco at tho Evorg|ados.
|o's ro|uctant to ta|k about h|s tam||y's prom|nonco or woa|th, |ost ho appoar |mmodost. 3|tt|ng
|n tho par|or ono day, l not|cod a copy ot tho 5oclo| Roglstor s|tt|ng on h|s cottoo tab|o and askod
how many ||st|ngs h|s tam||y had, know|ng thoy had many.
3ut|or sm||od norvous|y and qu|ck|y h|d tho book undor tho tab|o. °l'm so sorry. l usua||y havo |t
turnod around so poop|o's too||ngs won't bo hurt. Wo||, yos, wo'ro |n thoro, bocauso ot my
mothor's tam||y and my tathor's tam||y. Anyway, that's not |mportant, so you ||vo |n low York
thon?'
1our|ng tho d|n|ng room, 3ut|or po|nts to a row ot portra|ts on tho wa||-a|| show|ng womon w|th
s|m||ar aqu|||no toaturos, archod brows and ar|stocrat|c ch|ns.
°1h|s |s my grandmothor, Countoss ||||pon|, whon sho bu||t v|||a ||||pon| horo |n la|m 3oach.
1h|s |s my groat-groat aunt and that p|cturo was at tho v|ctor|a and A|bort Vusoum. 1h|s |s
mothor at ago 40. 1h|s |s my groat-groat-groat-groat-groat-groat-groat grandmothor |n 178b, tho
0uchoss ot Ormond, and that portra|t was dono by 3|ackburn. 1hat's ono ot my ro|at|vos trom tho
E||zabothan por|od.'
1ho 3ut|or tam||y tortuno, or what's |ott ot |t, has bocomo tho subjoct ot b|ttor tam||y touds.
3ut|or's s|b||ngs suod h|m 20 yoars ago attor h|s tathor d|od, and thoy suod aga|n a yoar ago
attor h|s mothor d|od. ||ght|ng ovor |nhor|tancos has takon such a to|| on 3ut|or that ho had a
mura| pa|ntod on h|s ||v|ng room wa|| that shows an o|ophant and an a|||gator attack|ng a young
|ntant.
°l'm tho baby,' ho says, po|nt|ng to tho mura|. °1ho nasty o|ophant and a|||gator aro my brothor
and s|stor.'
|o's a|so t|ght|ng a now |awsu|t trom h|s godson, who a|so wants monoy. 3ut|or's houso, a
Vod|torranoan-sty|o mans|on ovor|ook|ng tho Evorg|ados C|ub, has soon bottor days. 1ho p|astor
|s crumb||ng, root t||os aro crackod and tho ra|||ng on tho tront stops |s rustod out. lns|do, tadod
ant|quos sharo tab|o spaco w|th bow|s ot mo|dy tru|t, oxposod o|octr|ca| w|ros and occontr|c
kn|ckknacks, ||ko a so||d-go|d straw 3ut|or usos tor dr|nk|ng champagno.
1ho houso was choppod |n ha|t sovora| yoars ago to ra|so monoy, and tho oastorn port|on was
so|d ott to a low Vonoy coup|o. 1oday, tho two p|ocos aro a monumont to tho sp||t porsona||ty ot
la|m 3oach: 3ut|or's ha|t, a mott|od ro||c w|th an ovorgrown |awn and worm-oaton wood, tho
othor a cr|sp, c|oan v|||a w|th |ush gardons and now w|ndows and doors.
Ono attornoon, 3ut|or and l tako a dr|vo around tho |s|and, wh|ch turns |nto a tour ot h|s tam||y's
doc||no. |o shows mo ono ot h|s tathor's o|d homos that was s||cod |nto throo p|ocos, w|th tho
18,000-squaro-toot °north w|ng' ot tho houso rocont|y so|d tor sovora| m||||on do||ars. 1ho 3ut|or's
|and ho|d|ngs, wh|ch onco strotchod trom tho ocoan to tho m|dd|o ot tho |s|and, havo boon brokon
up |nto dozons ot sma||or parco|s. Wo turn to anothor |ot, wh|ch was so|d yoars ago to a carpot
sa|osman.
°1h|s sounds torr|b|o, but |t shockod mo whon wo had to so|| |t to h|m. 1h|s was a carpot
sa|osman, somoono trom Wost la|m 3oach, thoy d|dn't p|ay br|dgo, thoy d|dn't go to tho samo
spots, thoy d|dn't know tho samo poop|o. 1hoy woron't anybody, wo||, that sounds torr|b|o, but you
know what l moan.'
l ask 3ut|or what ho th|nks ot tho now guard, and ho says ho wo|comos tho low Vonoy com|ng
to town and t|x|ng up tho o|d homos. 3ut ho adds that ho's appa||od at tho way poop|o dross
today |n la|m 3oach, ospoc|a||y at tho 3roakors. °l soo poop|o thoro |n joans, |t's just awtu|.'
Whon l ask h|m what ||to |s ||ko at tho 3ath 8 1onn|s now that thoy sharo a boach w|th Var-a-
lago, ho says, °lt's a|| gono rathor wo||. Excopt tor tho lutt 0addy |nc|dont.'
1ho °lutt 0addy |nc|dont,' as 3ut|or to||s |t, has bocomo somoth|ng ot a dot|n|ng momont |n
la|m 3oach. 3ut|or was tak|ng h|s usua| attornoon sw|m |n tho 3ath 8 1onn|s sa|twator poo|
whon ho hoard a commot|on. |o turnod around and saw a crowd ot 381 ch||dron gathor|ng on
tho cabana w|ng to got a bottor v|ow ot tho boach.
°lt was Vr. 0|ddy, or lutty 0addy, you know, whatovor ho's ca||od. |o was thoro on tho boach
w|th a |ady tr|ond and thoy woro hav|ng ro|at|ons r|ght thoro on tho cha|so |oungo. 3omo
mombors wont ovor and askod thom to p|oaso stop, but Vr. 0addy bocamo vory upsot. |o
actua||y comp|a|nod that wo woro d|sturb|ng h|m.'
lutt 0addy, now known as 0|ddy (tho rappor whoso roa| namo |s 3oan Combs), |ot |ooso w|th
what tho |oca| pross ca||od an °|nvoct|vo-|acod rap' at tho 381 crowd and |ator comp|a|nod to
Var-a-lago about bo|ng harassod. Var-a-lago comp|a|nod to tho 381 and askod tor an
apo|ogy. Vak|ng mattors worso, tho woman w|th lutt 0addy wasn't h|s t|ancoo, and h|s
spokoswoman sa|d tho man on tho boach must havo boon a lutt |mporsonator.
E|thor way, 3ut|or sa|d tho ovont traumat|zod tho young 381 mombors.
°1ust th|nk ot thoso ||tt|o ch||dron that watchod,' 3ut|or says. °lo 381 mombor shou|d havo to
go through that.'

Niachiovoua Coorgo

lt's 2 A.V. at a rowdy, boor-soakod bar ca||od Cuc|na. 1ho song °l Wanna 3ox You Up' b|asts
trom tho |oudspoakors, and a crowd ot 20-somoth|ng partyors, most woar|ng noxt to noth|ng,
dancos chost to chost |n tho swoaty, packod room. ln tho m|dd|o ot |t a||, a stout man |n a tuxodo
ho|ds a 0owars |n ono hand and a shapo|y b|ondo |n tho othor.
°1h|s |s what l |ovo about la|m 3oach,' says Goorgo C|out|or, who gots smothorod |n k|ssos
trom pass|ng toma|o acqua|ntancos.
C|out|or, a bb-yoar-o|d ontropronour trom Cambr|dgo, Vassachusotts, arr|vod |n la|m 3oach
just throo yoars ago, and |n a short t|mo ho's bocomo ono ot tho bost-known t|guros on tho soc|a|
scono. |o and h|s g|r|tr|ond, 1|ttany, attondod about 20 b|ack-t|o ba||s |n 2000, and tho two
appoar a|most da||y |n ono ot tho |s|and's soc|oty nowspapors. last yoar ho donatod about
$b00,000 to char|tab|o tunct|ons |n la|m 3oach-powortu| curroncy |n tho quost tor soc|a| status.
°1ho papors to|| mo that l'm A-||st,' ho says. °l don't know tor suro, but that's what thoy to|| mo.'
C|out|or |s worth an ost|matod $b0 m||||on to $00 m||||on and mado h|s tortuno |n sma||-
bus|noss consu|t|ng, adv|s|ng mom-and-pop |umboryards, tam||y-ownod rostaurants, gas-stat|on
cha|ns and othor sma|| t|rms on how to bottor manago tho|r t|nancos. lt's not a g|amorous
bus|noss, but as C|out|or says, |t pays tho b|||s.
Goorgo |s a typ|ca| ontropronour-t|orco|y |ndopondont, contro|||ng and |mpat|ont. |o has ||tt|o
rospoct tor |nhor|tod woa|th, or °tako ontropronours,' as ho ca||s thom who °start out on th|rd baso
and th|nk thoy h|t a homo run.'
°1ust bocauso you'ro part ot tho |ucky sporm c|ub doosn't moan you'ro an ontropronour,' ho
says. |o's a|so adm|ttod|y so|t-contorod.
°l'm an on|y ch||d and a loo,' ho says. °3ad comb|nat|on.'
C|out|or runs h|s bus|noss trom ono ot h|s two boach homos |n la|m 3oach and lantuckot. ||s
la|m 3oach mans|on, a spraw||ng, now homo w|th a vaguo|y 3avar|an too|, |s porchod on tho
ocoan and worth an ost|matod $12 m||||on to $1b m||||on. Vost days, ho works trom h|s 1acuzz| or
roc||nor cha|r ovor|ook|ng tho ocoan. |or h|s da||y oxocut|vo moot|ngs, ho s||ps on a t|o, s|ts down
at h|s dosk and turns on a d|g|ta| camora abovo tho 1v tor v|doocontoroncos. ||s two ass|stants
work |n tho poo| houso, w|th a bank ot computors, pr|ntors and phonos.
Vanag|ng h|s bus|noss trom homo g|vos C|out|or moro t|mo tor h|s roa| pursu|t-soc|a||z|ng.
W|th no k|ds and no w|to (ho's tw|co d|vorcod), C|out|or has bocomo a sor|a| ba||goor, hoad|ng
out |n b|ack t|o at |oast tw|co a wook. |o a|so attonds most ot tho °sato|||to ovonts,' ||ko tho
proba|| |unchos, proba|| d|nnors, postba|| brunchos, and pro- and postba|| part|os tor tho
cha|rmon.
°Wo'ro probab|y out at |oast t|vo n|ghts a wook,' ho says. °A major part ot ||to horo |s tho ba||s. l
havo throo tuxodos that l bought a yoar ago and thoy a|roady nood rop|ac|ng. 1hoy'ro gott|ng
protty sh|ny.'
A b|g part ot C|out|or's soc|a| appoa| |s 1|ttany, a tormor nurso w|th b|ond ha|r, a g|oam|ng
wh|to sm||o and a lamo|a-Andorson-||ko phys|quo. 3ho's qu|ck|y |oarnod tho ru|os ot tho road |n
la|m 3oach soc|oty, ||ko novor woar tho samo dross to two ba||s.
°|r|onds cou|d soo you |n tho papor w|th tho samo dross,' sho says. °lt can bo tacky.'
Anothor ru|o: You can woar an °|mportant' braco|ot w|th |mportant oarr|ngs, but you shou|d
novor woar thom both a|ong w|th an |mportant nock|aco, s|nco that wou|d bo ovork|||.
A|| ot wh|ch can got oxpons|vo. C|out|or says ho sponds an ost|matod $80,000 to $100,000 on
gowns, jowo|s and othor ba||room batt|o goar tor 1|ttany. ln 2008, C|out|or spont $8b,000 on a
d|amond nock|aco tor h|s prov|ous g|r|tr|ond to woar tor a ba||. Whon thoy showod up, thoy woro
horr|t|od to soo throo othor womon woro woar|ng tho samo nock|aco, and h|s g|r|tr|ond ran out ot
tho ba|| |n toars.
°1hat was protty much tho ond ot that ro|at|onsh|p,' ho says.
1ho |nt|ux ot now soc|a||tos has turnod char|ty |nto a c|oso|y watchod, compot|t|vo sport |n la|m
3oach. At tho o|d ba||s, soc|a||tos typ|ca||y |nv|tod a tow hundrod ot tho|r c|osost tr|onds and
ra|sod undor $100,000. low, monoy |s paramount. 1o bocomo cha|rman ot a ba|| today (and
roco|vo a|| tho accompany|ng ph||anthrop|c acco|ados) you havo to got a|| your r|ch tr|onds to
donato hoav||y to tho ovont. ln roturn, you havo to donato tho samo amount to tho|r ba||s. 1ho
cha|n ot roc|proca| g|v|ng a||ows soc|a| c||mbors to ossont|a||y buy soc|a| stand|ng on tho |s|and
through char|ty. And |t's a|| tax-doduct|b|o.
°loop|o koop track,' C|out|or says. °3o |t l g|vo $2b,000 to your ba||, you havo to g|vo $2b,000
to my ba||. lt you on|y donato $10,000 to my ba||, l'|| not|co. lt's about g|v|ng to a good causo. 3ut
|t's a|so about tho monoy. lt's roa||y about tho monoy.'
3ocauso ot h|s gonorous g|v|ng ovor tho past two yoars, C|out|or now has onough t|nanc|a|
tavors to ca|| that ho can cha|r h|s own ba||s. |o and 1|ttany havo boon askod to cha|r o|ght ba||s
|n la|m 3oach noxt yoar, but ho says ho probab|y on|y has t|mo tor two or throo. |o a|roady hosts
an annua| °3oog|o on low 3oach' party at h|s boach houso |n lantuckot to bonot|t tho 0ana
|arbor Cancor lnst|tuto. last yoar, tho ovont ra|sod $00,000. l|ko most ot C|out|or's part|os, tho
3oach 3oog|o toaturod |ots ot sports stars, young womon, ||vo bands and troo-t|ow|ng a|coho|.
°l tako pr|do |n my part|os,' ho sa|d. °Ask anyono |n la|m 3oach and thoy'|| say l havo tho bost
part|os.'
A3l0E trom hav|ng vast|y d|ttoront v|ows ot b|ack-t|o ba||s and Chr|stmas part|os, low and O|d
Vonoy a|so havo d|ttoront v|ows ot spond|ng. Wh||o O|d Vonoy was known tor |ts outward thr|tt
and |nnor opu|onco (ono b|uo-b|ood tam||y |n low York doscr|bod tho|r |ntor|or-dos|gn sty|o to mo
as °grandmothor's att|c'), l|ch|stan|s ||ko to t|aunt tho|r woa|th. And novor botoro havo so many
t|auntod so much.


7

5|ZE REALLY
DOE5 NA11ER

"My Boat ls BIgger 1han ¥our Boat¨

0on Woston usod to too| spoc|a| cru|s|ng tho wor|d |n h|s 100-toot yacht. |o wou|d motor down to
tho Car|bboan, dock tor a tow days |n 3t. Vart|n and moot up w|th to||ow yachtors tor a |o|suro|y
|unch or d|nnor. ||s boat wasn't a|ways tho b|ggost |n tho harbor, but |t was b|g.
°lt's tho k|nd ot boat that wou|d havo gotton a n|co chr|ston|ng whon |t was |aunchod, w|th a
champagno bott|o and a b|g party and ovoryth|ng,' sa|d Woston, a rot|rod C|nc|nnat|
bus|nossman.
Yot ono morn|ng at tho 2004 lntornat|ona| 3oat 3how |n |t. laudorda|o, Woston stood on h|s
uppor dock ovorshadowod by g|ants.
loxt door was tho Corrlo Lyoo, a 180-toot cru|sor w|th a k|ng-s|zod 1acuzz|, t|vo cab|ns,
rotractab|o p|asma 1v scroons and tw|n jot sk|s. 0own tho dock was tho 107-toot A|ío loor, w|th
an |ndoor gym, sw|mm|ng poo| and ho||coptor pad. 1ho ta|k ot tho show was b||||ona|ro lau|
A||on's |atost p|oasuro cratt, namod Octopos, wh|ch strotchos ovor 400 toot and has a baskotba||
court, mus|c stud|o, g|assbottom ||v|ng room and submar|no. Octopos has s|nco boon
ovorshadowod by Rlslog 5oo, larry E|||son's t|oat|ng pa|aco that tops 4b0 toot and has moro
than 80 rooms on t|vo stor|os. A|ong w|th tho usua| gyms and sw|mm|ng poo|s, Rlslog 5oo has a
tw|n-hu||od |and|ng cratt to carry a tourwhoo|-dr|vo 1oop ashoro.
°l usod to th|nk l had a good-s|zod boat,' Vr. Woston s|ghod. °low |t's ||ko a d|nghy comparod
to thoso othors.°
lt's sato to assumo that at no othor t|mo |n Amor|can h|story has a 100-toot boat boon rotorrod
to as a °d|nghy.' 1horo aro so many l|ch|stan|s today, w|th so much monoy to spond, that thoy'ro
croat|ng an ont|ro|y now |ovo| ot consumpt|on. 3o|ng a tru|y consp|cuous consumor has novor
boon hardor, s|nco thoro aro m||||ons ot m||||ona|ros compot|ng tor tho samo status symbo|s, and
an ovon groator numbor ot att|uont consumors purchas|ng |uxury goods to try to m|m|c tho o||to.
Accord|ng to ono study, tho nat|on's r|chost ha|t-porcont consumo at tho rato ot $0b0 b||||on a
yoar-oqua| to tho tota| housoho|d spond|ng |n lta|y. A|| that spond|ng |s push|ng up pr|cos |n
l|ch|stan. 1ho |nt|at|on rato tor m||||ona|ros soarod to 0 porcont |n 2004, comparod to about 8
porcont tor tho broador Un|tod 3tatos. |or thoso worth $80 m||||on or moro, |nt|at|on roso ovon
turthor, to 12 porcont.
1ho h|gh-ond shopp|ng sproo |s bo|ng dr|von part|y by poor prossuro. Koop|ng up w|th tho
1onosos has bocomo t|orco|y compot|t|vo, s|nco thoro aro so many moro r|ch 1onosos. Goorgo
C|out|or, tho partyor trom la|m 3oach, rocont|y bought h|s g|r|tr|ond a chorry-rod Vorcodos 3lK,
wh|ch cost around $b0,000. |o thought |t was a n|co g|tt. ||s tr|onds thought othorw|so.
°Vy tr|onds a|| mado tun ot mo,' ho says.
3o ho tradod |n tho 3lK tor tho |argor Vorcodos 3l, wh|ch cost around $110,000. low, two
yoars |ator, ho's gott|ng soc|a| prossuro to buy h|s g|r|tr|ond an ovon moro oxpons|vo car.
°Evoryono's ta|k|ng about 3ont|oys, ||ko that's tho car you gotta havo.'
1ho prossuros havo mado |t hardor, and moro oxpons|vo, than ovor to bo a tru|y consp|cuous
consumor. ln h|s c|ass|c 1800 troat|so on woa|th, 7bo 7boory oí tbo Lolsoro C|oss, 1horsto|n
vob|on co|nod tho phraso °consp|cuous consumpt|on' to oxp|a|n tho oxcossos ot tho G||dod Ago.
vob|on sa|d that tho woa|thy bought oxpons|vo goods as a way to |dont|ty thomso|vos as
mombors ot tho nonwork|ng |o|suro c|ass. Wasto and oxcoss woron't just to|oratod by tho r|ch,
thoy woro nocossary to show rank on tho soc|a| sca|o. And |n a consumor soc|oty, rank was
s|gna|od by spond|ng.
°1ho bas|s on wh|ch good roputo |n any h|gh|y organ|zod |ndustr|a| commun|ty u|t|mato|y rosts
|s pocun|ary strongth, and tho moans ot show|ng pocun|ary strongth, and so ot ga|n|ng or
rota|n|ng a good namo, aro |o|suro and a consp|cuous consumpt|on ot goods.' On tho t||p s|do,
tho °ta||uro to consumo |n duo quant|ty and qua||ty bocomos a mark ot |ntor|or|ty and domor|t.'
1ho r|ch, |n short, spond to show that thoy can. What's changod |n l|ch|stan |s that thoro aro so
many l|ch|stan|s, w|th so much d|sposab|o |ncomo, tho job ot °show|ng pocun|ary strongth' has
bocomo |ncroas|ng|y d|tt|cu|t. 1ust whon a l|ch|stan| th|nks ho's stakod h|s c|a|m to tho o||to, w|th
that 100-toot boat, or $b0,000 Vorcodos, a|ong comos a r|chor l|ch|stan| w|th a 2b0-toot boat,
and a 3ont|oy G1.
l|ch|stan|s aro a|so spond|ng to outrun tho hordos ot l|ch|stan| wannabos. 1ho grow|ng ranks
ot att|uont consumors aro |ncroas|ng|y trad|ng up to buy goods onco rosorvod tor tho r|ch. luxury
compan|os, to grow sa|os, aro happy to so|| choapor vors|ons ot tho|r h|gh-ond products to sorvo
th|s now crowd ot asp|r|ng shoppors. Varkotors ca|| |t °mass |uxury' and, oxymoron or not, |t's
mado ||to m|sorab|o tor l|ch|stan| spondors.
Gucc| sung|assos, lou|s vu|tton bags and 3urborry coats aro now ub|qu|tous. |ract|ona| jot
compan|os now a||ow poop|o to °t|y pr|vato' tor thousands ot do||ars, rathor than pay|ng $80
m||||on tor tho|r own p|ano. You can ront a |orrar| or lorscho trom ono ot tho grow|ng numbor ot
auto c|ubs, and you can chartor a mogayacht tor s|x t|guros a wook, rathor than pay|ng tho o|ght-
t|guro tab tor ownorsh|p. You can jo|n a dost|nat|on c|ub tor $1b0,000 and vacat|on at your own
soas|do mans|on |n tho Car|bboan or sk| cha|ot |n Aspon. You can ovon ront a pr|coy pa|nt|ng to
put on your wa|| trom tho now crowd ot art-ronta| shops.
1ho prossuros trom both tho top and tho bottom, trom r|chor l|ch|stan|s and tho moro att|uont,
havo torcod l|ch|stan|s to croato an ont|ro|y now c|ass ot hypor|uxury goods, wo|| boyond tho
roach ot tho att|uont ho| po||o|. ln somo casos, thoy'ro b|dd|ng up pr|cos ot ox|st|ng goods. ln
othors, thoy'ro |aunch|ng ont|ro|y now catogor|os ot products and sorv|cos, ||ko spaco travo| and
°shadow yachts.' E|thor way, tho hugo numbors ot l|ch|stan|s aro tur|ous|y ratchot|ng up tho pr|co
ot status, and tak|ng vob|on's not|on ot consp|cuous consumpt|on to now ho|ghts.
|oro's a samp||ng ot somo ot tho trad|t|ona| |uxury markots that aro bo|ng rodot|nod by tho
l|ch|stan| quost tor status.

Yachta: Whon tho 5triµµor PoIo
Comoa 5tandard

3omot|mo |n tho noxt two yoars, tho wor|d w||| soo |ts t|rst pr|vato yacht |argor than b00 toot.
1horo m|ght ovon bo two. 1ho t|rst, ca||od Lobol, |s bo|ng bu||t tor 3ho|kh Vohammod 3|n lash|d
a| Vaktoum, ru|or ot 0uba|, and moasuros b2b toot. 1ho socond, codo-namod Ec|lpso, |s bo|ng
bu||t tor a luss|an o|| tycoon and |s oxpoctod to h|t tho wator |n 2000. 1ho luss|an ownor |s
koop|ng tho actua| |ongth a socrot, to onsuro that h|s w||| bo tho |ongost. Yot both boats w||| shattor
tho rocord tor wor|d's |argost pr|vato yacht, ho|d tor tho |ast 22 yoars by tho 482-toot Aboo| Azlz,
ownod by tho 3aud| roya|s.
°1hoso days, s|zo mattors,' says 1onathan 3ockott, pros|dont ot l|go| 3urgoss, tho yacht
brokorago t|rm.
3o do numbors. Ordors tor now yachts |ongor than 1b0 toot havo doub|od ovor tho past
docado, to moro than 200 a yoar. 3oat bu||dors havo moro than 1b m||os ot yacht undor
construct|on-|ongor than tho |s|and ot Vanhattan.
lt you want to ordor a 200-toot boat today, got |n ||no, tho wa|t|ng ||st |s about two yoars |ong.
low boats aro so|||ng tor about $20 m||||on tor a 140-tootor, to $7b m||||on tor a 2b0-tootor. Usod
yachts aro now so|||ng tor as much as or moro than now onos, s|nco ownors aro w||||ng to pay up
to havo tho|r boats |mmod|ato|y.
Upkoop has bocomo ovon moro astronom|ca|. 3oat oxports t|guro |t costs about 10 to 1b
porcont ot tho purchaso pr|co ot a boat to ma|nta|n |t, wh|ch moans about $2 m||||on a yoar tor a
typ|ca| 140-tootor. Crow sa|ar|os aro soar|ng as so many yacht ownors soarch tor stowards and
capta|ns.
1horo aro so many boats |n tho wator |n tho Un|tod 3tatos that yacht tratt|c jams aro bocom|ng
a prob|om. Ownors havo to book months |n advanco to got a top borth |n 3t. 3art's around
Chr|stmas. 3|ots at tho |t. laudorda|o 3ah|a Var Var|na now ront tor $7 por toot dur|ng tho
w|ntor months, up trom |oss than $1 a toot |n tho m|d-1000s. last w|ntor, so many yachts woro
wa|t|ng to pu|| |nto 3ah|a Var borths that tho mar|na had to dop|oy spoc|a| yacht-tratt|c cops.
3oat bu||dors havon't soon a boom ||ko th|s s|nco, wo||, novor. 1ho loar|ng 1wont|os had |ts
sharo ot hugo boats, ||ko tho 407-toot 5ovorooo, bu||t tor tho tam||y that bu||t tho 3rook|yn 3r|dgo.
1ho 5ovorooo, wh|ch |s st||| t|oat|ng, boastod a t|oor-hoatod 1urk|sh bath bu||t trom 200 tons ot
hand-carvod marb|o. Yot novor havo so mooy mogayachts h|t tho wator at onco. 3omo ot tho
now|y naut|ca| r|ch aro bu||d|ng ont|ro armadas. lau| A||on usos h|s s|x-story Octopos as a ma|n
boat, but koops h|s 800-toot 7otoosb and 108-toot Voooso on hand as backups, and guost
yachts tor tr|onds and tam||y.
At tho |t. laudorda|o boat show |n 200b, l got a g||mpso ot tho |atost |nnovat|on |n boator b||ng
-tho 170-toot la|ad|n, known as a °shadow boat.' A shadow boat |s a t|oat|ng garago that tags
a|ong w|th tho ma|n yacht and carr|os a|| tho oxtra °toys,' ||ko cars and sma||or boats. lt's a k|nd ot
yacht tor your mogayacht. 1ho la|ad|n, now ownod by a 3aud|, ho|ds tour to s|x cars, sovora|
motorcyc|os, jot sk|s, a submar|no and a ho||coptor. lt's a|so got a docompross|on chambor, a
wa|k-|n troozor, gym and n|ght-v|s|on camoras.
1ho company that bu||t tho la|ad|n |s about to |aunch a now modo| ca||od tho C|ty ot vogas,
w|th s|x stato rooms, a ho||coptor dock and, tor thoso boators who don't ||ko tho opon wator, a tu||-
s|zod sw|mm|ng poo|.
Gono aro tho days whon °yacht|ng' moant a brac|ng tr|p on tho tam||y schoonor, w|th b|||ow|ng
sa||s, woodon bunks and no |ndoor p|umb|ng. Uppor-c|ass boats, as lau| |usso|| wroto |n h|s
1088 book C|oss, usod to bo dot|nod by tho|r d|scomtort, and tho|r tam||y h|story.
°3a|| |s st||| tar supor|or to powor, part|y bocauso you can't do |t s|mp|y by turn|ng tho |gn|t|on
koy and stoor|ng-you havo to bo sort ot to tho manor born. (lrobab|y tho most vu|gar vosso| you
can own |s a Chr|s-Cratt, tho yacht|ng oqu|va|ont ot a Vorcodos.) 1ho yacht must bo qu|to |ong, at
|oast 8b toot, and |n gott|ng a now ono you must trado up,novor down. Accord|ng to ono yacht
brokor, boat status procoods by t|vo-toot |ncromonts. 1ho customors, ho says, w||| 'jump up t|vo
toot at a t|mo unt|| thoy got up to 00 or 70 toot.' And tho yacht shou|d a|m at tho uncomtortab|o
rac|ng sty|o, rathor than tho dumpy, to|ksy, tam||y sty|o, wh|ch m|ght suggost ||v|ng on |t a|| tho
t|mo, thus h|nt|ng at pr|vat|on.'
lowadays, sa||boats aro t|no, as |ong as thoy can bo powor-w|nchod back onto tho 800-toot
motor yacht, ||ko lau| A||on's. (3a||boats now account tor a t|ny tract|on ot tota| yacht sa|os.) And
|nstoad ot trad|ng up |n t|vo-toot |ncromonts, today's movo |s up by b0 or 100 toot at a t|mo. 1ho
now yacht |ntor|ors aro dos|gnod oxpross|y to suggost tu||-t|mo ros|doncos, h|nt|ng moro at
t|oat|ng mans|ons than at |usso||'s °pr|vat|on.'
1hoy havo computor-contro||od stab|||zors, wh|ch ant|c|pato tho rock|ng movomonts ot a boat
and ottsot thom w|th undorwator t|ns or gyroscopos, so you torgot you'ro on tho wator. ||gh-toch
socur|ty systoms, storoos, thoators and 12-porson 1acuzz|s havo bocomo standard. lt's not
onough to havo a ho||coptor pad, today you nood two (ono tor guosts, ono tor tho ownor), as wo||
as an |ndoor storago aroa to protoct tho choppors trom tho sa|t a|r.
Guosts aboard tho Aooo|losso, a boat that chartors tor $800,000 a wook, onjoy a comp|oto
spa w|th a loman bath, p|ungo poo|s, stoam rooms, and a sauna. |. Wayno |u|zonga, tho
garbago and car-doa|orsh|p magnato, rocont|y purchasod go|tor Grog lorman's 228-toot yacht,
ronamod |t 7bo l|orloloo and addod a ho||pad and oxtra guost su|to, but ho doc|dod to koop tho
sw|m-up bar on tho sundock. 1ho 20b-toot Bort Roborts, a convortod |cobroakor w|th a p|rato
thomo ownod by ||or|da bus|nossman Art Gom|no, has bronzo cannons, a tank ot p|ranhas and a
danco t|oor comp|oto w|th a romovab|o °str|ppor' po|o.
lo ono's qu|to suro whon or how tho rocont batt|o ot tho bu|go |n yacht|ng roa||y startod. 1ho
t|rst shot was probab|y t|rod by los||o Woxnor, tho cha|rman and ch|ot oxocut|vo ot l|m|tod
3rands lnc., wh|ch owns v|ctor|a's 3ocrot. ln 1007, Woxnor bu||t tho 81b-toot Llmlt|oss. 1ho sh|p
had 8,000 squaro toot ot toak wood a|ong w|th a gym. A short t|mo |ator, V|crosott Corp.
cotoundor lau| A||on bought tho 8b4-toot Lo Orooo B|oo, wh|ch qu|ck|y provod too sma||. A||on
comm|ss|onod a Gorman sh|pyard to bu||d Octopos, b|||od as tho b|ggost pr|vato yacht |n tho
wor|d, w|th a b0-toot oxtra spoodboat, a sw|mm|ng poo|, a baskotba|| court and a mus|c stud|o.
lts contorp|oco |s a pr|vato submar|no, wh|ch can bo |oworod trom a spoc|a| 0r. lomo-||ko
dock|ng stat|on on tho |owor dock (a|though poop|o who'vo boon on tho boat say tho submar|no
has boon doggod by tochn|ca| ta||uros). Octopos's tota| cost: about $2b0 m||||on.
Evon botoro Octopos h|t tho wator, howovor, a now compot|tor was omorg|ng. larry E|||son,
tho hyporcompot|t|vo Orac|o Corp. ch|ot, startod bu||d|ng tho top-socrot lE120 projoct w|th tho
samo Gorman sh|pbu||dor that mado A||on's boat.
Whon E|||son startod bu||d|ng tho lE120, |t was s|atod to bo 120 motors, or about 808.b toot.
Yot as word got out that Octopos wou|d top 400 toot, tho lE120 startod oxpand|ng. Whon |t t|na||y
|aunchod |n 2004, |t moasurod 4b4 toot and cost moro than $200 m||||on to bu||d. A prot||o ot
E|||son and h|s boat |n Voolty lolr |ns|stod that tho lE120 Rlslog 5oo grow dur|ng construct|on
to |mprovo |ts °o|oganco and spood.' °3||||ona|ro ono-upsmansh|p,' tho art|c|o sa|d, had noth|ng
to do w|th |t.
Whon ho took h|s t|rst ho||day on tho boat |n oar|y 200b, E|||son to|d tr|onds |t was too b|g-that
ho and h|s w|to to|t ||ko thoy woro tho so|o patrons |n a g|ant rostaurant. °Wo||, l do th|nk |t's
oxcoss|vo,' E|||son sa|d. °lt |s abso|uto|y oxcoss|vo. lo quost|on about |t. 3ut |t's amaz|ng what
you can got usod to.'
3uch mogayachts, howovor, may bo roach|ng tho|r ||m|t. Vany ot tho now boats aro so b|g thoy
can't t|t |nto convont|ona| mar|nas and havo to t|o up at commorc|a| ports. Whon lau| A||on br|ngs
Octopos to ||or|da, ho can't park noxt to tho othor t|ashy yachts at tho 3ah|a Var so ho has to go
to lort Evorg|ados and dock noxt to tho rusty conta|nor sh|ps and o||y sky cranos.
°You don't spond $200 m||||on on a boat to s|t noxt to a bunch ot o|| tankors,' yacht brokor
3ockott says. °lt's not vory scon|c.'
3omo ot tho now mogayacht ownors aro d|scovor|ng thoy don't nood, or ovon ||ko, a|| that
squaro tootago on a boat. 1ho now yachts aro so b|g and so ovorong|noorod that thoy don't too|
||ko boats anymoro. 3omo l|ch|stan|s aro t|nd|ng that thoy actua||y m|ss tho oxpor|onco ot
boat|ng.
°Ono ownor camo to mo just attor buy|ng a hugo boat and wantod to so|| |t,' says |onk do
vr|os, manag|ng d|roctor ot |oadsh|p, a 0utch yacht bu||dor. °|o sa|d that whon ho stood on tho
dock, ho to|t too tar trom tho wator.'

RoaI Eatato: Croonwich Cottago with
Amonitioa~PooI, |co Rink, Zamboni

ln tho |ato 10th contury, tho r|chost Amor|cans startod bu||d|ng homos that asp|rod to tho groat
chatoaus ot Europo. 1hoy woro ramb||ng, nooc|ass|ca| monumonts to ar|stocracy, carvod trom
stono and br|ck, and tuckod at tho ond ot m||o-|ong dr|voways h|ddon trom pub||c v|ow. 1hoy
dottod tho shoros ot oastorn long ls|and, Connoct|cut and lhodo ls|and, as wo|| as tho ro|||ng
tarm|and ot lonnsy|van|a's Va|n l|no and groat p|antat|ons ot tho 3outh.
1ho grandost was tho 3||tmoro Estato, tho |ronch lona|ssanco-sty|o ostato noar Ashov|||o,
lorth Caro||na, wh|ch, w|th |ts 2bb rooms ovor 17b,000 squaro toot, roma|ns tho |argost pr|vato
homo bu||t |n Amor|ca.
Yot l|ch|stan|s aro catch|ng up. 1ho numbor ot homos bu||t |n 200b |argor than b,000 squaro
toot soarod to 80,000-moro than t|vo t|mos tho numbor |n 100b. 1hoso homos now roprosont
moro than 2 porcont ot tho tota| hous|ng starts, up trom ono-ha|t ot a porcont a docado ago. ln
h|gh-ond commun|t|os ||ko Groonw|ch, la|m 3oach and Athorton, 10,000 squaro toot |s tho now
norma|.
3||||ona|ro t|nanc|or lra lonnort bu||t a 00,80b-squaro-toot homo on long ls|and. loop|o3ott
toundor 0av|d 0utt|o|d p|annod to bu||d a |ronch lorman-sty|o mogamans|on and othor
bu||d|ngs tota||ng 72,000 squaro toot noar 3an |ranc|sco, but ho had to chango tho p|ans
bocauso ot |oca| oppos|t|on. 1ho roason: lt was too b|g. 0utt|o|d sca|od |t down to a modost
10,000 squaro toot.
|odgo-tund managor 3tovon Cohon pa|d $14.8 m||||on tor a 1udor-sty|o mans|on |n Groonw|ch
and spont anothor $10 m||||on or so to |ncroaso tho s|zo to moro than 80,000 squaro toot, add|ng
an |ndoor baskotba|| court, a tu||-s|zod sw|mm|ng poo| onc|osod |n a g|ass atr|um and a 0,784-
squaro-toot |co r|nk. Evon tho Zambon| has |ts own gab|od cottago.
A homo bu||t by Chuck and Karon lyt|o on lako Wash|ngton, noar 3oatt|o, has a 70-toot
sa|twator |ndoor poo| r|ngod w|th Egypt|an co|umns, comp|oto w|th h|orog|yph|cs. A 00,000-
squaro-toot homo rocont|y comp|otod |n A|p|no, low 1orsoy, has a two-|ano bow||ng a||oy (a |a
3||tmoro), a darkroom, an art room w|th stoo| doors that drop trom tho co|||ng, a 2,000-ga||on
aquar|um, 4,000 toot ot c|osots and onough garago spaco tor 10 voh|c|os.
At ono homo l v|s|tod |n Vanhattan, ownod by a roa|-ostato dovo|opor, tho w|to had so many
drossos and su|ts |n hor 400-squaro-toot wa|k-|n c|osot that sho had |t oqu|ppod w|th an o|ovatod
convoyor-bo|t systom-tho k|nd usod |n dry-c|oan|ng tactor|os-to storo and rotr|ovo hor c|othos.
lr|co |ncroasos tor mogamans|ons havo tar outpacod tho broador markot. On tho Wost 3|do
ot los Ango|os, thoro woro moro than a dozon homos |n 2000 on tho markot tor $80 m||||on or
moro-up trom about two |n 2001. ln 2004, b||||ona|ro lona|d loro|man so|d h|s boach houso
and adjo|n|ng |and |n la|m 3oach tor $00 m||||on, tho h|ghost pr|co ovor pa|d tor a ros|dont|a|
homo |n tho Un|tod 3tatos. Evon as tho hous|ng markot coo|od |n 2000, domand at tho top
roma|nod strong. 1ho hoad||nos trom a s|ng|o 3unday |n |ato 2000 toaturod tho Vanhattan sa|os
ot a $40 m||||on mans|on, an $18 m||||on condo and $1b m||||on homo.
As ot oar|y 2007, thoro woro throo vacat|on homos on tho markot pr|cod at $100 m||||on or
moro. 1ho choapost, tor $100 m||||on, |s an ostato noar lako 1ahoo namod 1ranqu|||ty, bu||t by a
cotoundor ot 1ommy |||t|gor and boast|ng a pr|vato |ako, consorvatory, boathouso, stab|o,
gymnas|um and garago spaco tor 17 cars. 1ho homo's sta|rcaso |s a rop||ca ot tho 33 7ltoolc's,
and tho marb|o t|oor|ng |n tho ontryway |s pattornod attor tho low York lub||c l|brary's. 0ona|d
1rump |s so|||ng a 08,000-squaro-toot ostato |n la|m 3oach tor $12b m||||on, though |t's
|angu|shod on tho markot tor ovor a yoar. 1ho now rocord broakor |n roa| ostato |s tho 0b-acro
3tarwood lanch |n Aspon, bu||t and ownod by 3aud| Arab|a's lr|nco 3andar b|n 3u|tan, and on
sa|o tor $18b m||||on. 1ho ostato has a b0,000-squaro-toot mans|on-b|ggor than tho Wh|to
|ouso-w|th 1b bodrooms and an o|ovator. 3andar says ho's so|||ng tho p|aco bocauso ho
doosn't got to tho mounta|ns much anymoro. Yot ho won't bo homo|oss |n Aspon: |o rocont|y bu||t
a 1b,000-squaro-toot guosthouso on tho proporty, a|ong w|th a rop||ca ot a 3r|t|sh pub, wh|ch a
spokosman sa|d 3andar w||| probab|y koop.

Jota: Roaching Eacaµo VoIocity

ln 2000 Er|c loth got an unusua| roquost. 1ho hoad ot lntornat|ona| 1ot lntor|ors, a low 1orsoy-
basod company that outt|ts pr|vato-jot cab|ns, got a ca|| trom a c||ont who had just purchasod a
Cha||ongor 004. 1ho c||ont wantod somoth|ng spoc|a|. Espoc|a||y tor tho to||ot.
°|o askod |t l cou|d mako a potty soat trom a|||gator sk|n,' loth roca||s. °l sa|d, 'You bot l can!''
loth bought two a|||gator sk|ns trom a doa|or |n ||or|da tor $8,000 and carotu||y st|tchod thom
|nto to||ot soats and tr|m tor tho cab|n |ntor|or. |o a|so |nsta||od a handwovon carpot trom
1ha||and, mado trom woo| and s||k, w|th 14 co|ors, at $000 a yard. |o usod roso go|d, w|th a
°sw|r|od tunno| t|n|sh,' to mako tho cab|n's doorknobs, soat-bo|t buck|os and othor t|xturos, and ho
dyod tho |oathor soats tho samo p|nk|sh huo to match. 1ho cupboards woro stockod w|th
vorsaco ch|na, Chr|stot|o s||vor and la||quo crysta|.
°low tbot was a n|co p|ano,' ho says.
|or somo pr|vato-jot ownors, tho wor|d sooms to rost on whothor thoy havo tho propor wood
gra|n on tho|r cab|n t|n|sh. Ono ot loth's customors was a woman who ownod a Gu|tstroam lv
and |ns|stod on p|ck|ng out tho oxact |og that wou|d bo usod to mako hor |ntor|or mo|d|ngs.
3ho t|ow loth |n hor jot to a spoc|a|ty-wood warohouso |n lnd|ana, whoro thoy spont o|ght hours
p|ck|ng through stacks ot |umbor. ||na||y sho tound tho portoct p|oco-a sat|ny burr madrona. 1ho
tr|p cost $80,000, not |nc|ud|ng tho wood.
Goog|o toundors 3orgoy 3r|n and larry lago woro moro pragmat|c about tho|r cho|co |n
pr|vato jots. 1ho 80-somoth|ng mu|t|b||||ona|ros, who dr|vo onv|ronmonta||y tr|ond|y hybr|d cars,
bought a 3oo|ng 707 w|do-body a|r||nor to t|y thomso|vos and tho|r tr|onds around tho wor|d. 1ho
jot, or|g|na||y dos|gnod to ho|d 224 passongors, was to bo rotrot|ttod tor a max|mum ot b0
poop|o.
Whon askod why thoy noodod such a hugo p|ano, larry sa|d thoy woro mot|vatod by pract|ca|
concorns. 1ho p|ano, attor a||, probab|y cost undor $1b m||||on-ono-th|rd tho pr|co ot a much
sma||or Gu|tstroam bb0.
°Wo tond to havo an ong|noor|ng approach, to bo tactbasod,' lago to|d 7bo ¼o|| 5troot
1ooroo|. °Wo |ookod at th|s and wo just d|d tho oconom|cs and wo sa|d 'you know |t makos a |ot
ot sonso.''
3uch pragmat|c oxtravaganco d|dn't soom to app|y to tho p|ano's |ntor|or. Among othor
amon|t|os, tho Goog|o guys wantod hammocks hung trom tho co|||ng. 3orgoy and larry b|ckorod
ovor whothor thoy cou|d both havo Ca||torn|a k|ng-s|zo bods onboard. And at ono po|nt dur|ng
tho ronovat|on, accord|ng to tho dos|gnor, Goog|o CEO Er|c 3chm|dt sa|d, °lt's a party a|rp|ano.'
3t|||, 3r|n |ns|stod that tho pr|vato w|do-body |s tu||y |n koop|ng w|th Goog|o's m|ss|on to
|mprovo tho wor|d.
°lart ot tho oquat|on tor th|s sort ot mach|nory |s to bo ab|o to tako |argo numbors ot poop|o to
p|acos such as Atr|ca,' lago to|d 7bo ¼o|| 5troot 1ooroo|. °l th|nk that can on|y bo good tor tho
wor|d.'
3a|os ot pr|vato jots aro skyrockot|ng. lurchasos ot now pr|vato jots tota|od $18 b||||on |n
200b, up trom $8.8 b||||on |n 100b. 1ot makors ||ko Gu|tstroam, 3ombard|or and 0assau|t so|d
7b0 p|anos |n 200b, moro than tw|co as many as |n 100b.
lr|cos aro a|so r|s|ng w|th domand. 1ho most oxpons|vo Gu|tstroam |n 100b was tho $27
m||||on G4. low |t's tho $47 m||||on Gbb0. Gu|tstroam's °ontry-|ovo|' jot, tho G1b0, now goos tor
$18 m||||on. 3ut |t you want to buy ono, got |n ||no. 1ho wa|t|ng ||st tor Gu|tstroams |s now two
yoars |ong, and somo buyors aro so|||ng tho|r °s|ots' on tho Gu|tstroam wa|t|ng ||st tor up to $1
m||||on to moro |mpat|ont buyors. Usod Gu|tstroams aro a|so bocom|ng scarco.
A|rports noar tho b|g c|t|os and vacat|on spots aro now swarm|ng w|th pr|vato jots. ln Aspon, so
many pr|vato jots jost|o tor park|ng spots dur|ng poak t|mos ot tho yoar that tho ovorrun has to bo
d|vortod to noarby l|t|o or va||. On ono day |n 1anuary ot 2000, tho a|rport had to d|vort 1b0
p|anos tor |ack ot spaco.
lr|vato-jot congost|on |s so bad at low York's 1otorboro A|rport that ownors havo startod
stow|ng tho|r p|anos |n Oxtord, Connoct|cut, or Vorr|stown, low 1orsoy.
°On |r|day n|ghts |n tho summor, 1otorboro |s ||ko a b|g park|ng |ot,' sa|d Ed 3az|not, a jot
ownor. °You just s|t thoro, star|ng at a|| tho othor |mportant guys s|tt|ng |n tho|r jots.'

Big-Dog Cara

ln tho m|d-1000s, lo||s-loyco had a prob|om. lts mammoth 3||vor C|oud, w|th |ts s|op|ng tondors,
manto|p|oco gr|||o and 3r|t|sh pod|groo that spoko ot omp|ro and ar|stocracy, had ta||on out ot
tavor. Woa|th was no |ongor coo|, and tho r|ch no |ongor wantod to stand out trom tho
countorcu|turo. Espoc|a||y whon |t camo to tho|r cars.
3o lo||s-loyco ovorhau|od |ts c|ass|c dos|gn and |aunchod tho sma||or, moro boxy 3||vor
3hadow. lt was tho pro|otar|at lo||s, moro ||ko an ombarrassod vo|vo than tho |n-your-taco 3||vor
C|oud. Evon lo||s-loyco's s|gnaturo hood ornamont, tho 3p|r|t ot Ecstasy °t|y|ng |ady,' was sont
|nto ox||o.
Yot l|ch|stan|s havo ushorod |n a now ora ot opu|onco, and w|th |t, a roturn to t|ashy r|dos. Attor
bo|ng acqu|rod by 3VW |n 1008, lo||s-loyco dustod ott tho b|uopr|nts tor tho 3||vor C|oud and |n
2008 unvo||od tho now lhantom-a 2.b-ton, 10.b-toot-|ong wha|o ot a car w|th a $820,000 pr|co
tag.
°loop|o today aro moro comtortab|o stand|ng apart,' sa|d 3ob Aust|n, a lo||s spokosman.
°Woa|thy poop|o havo roga|nod a corta|n cont|donco. 3uddon|y |t you want to stand out, you nood
somoth|ng spoc|a|. 1h|s |s a b|g-dog car.'
And tho b|g dogs want to dr|vo thomso|vos. 3otoro 1080s, tho °vast major|ty' ot lo||s buyors
usod chauttours, Aust|n says. low, about 0b porcont ot lo||s ownors dr|vo tho cars thomso|vos,
ospoc|a||y s|nco tho lhantom's 4b8-horsopowor v-12 ong|no can powor tho car trom 0 to 00
mph |n b.7 soconds.
°1ho now brood |s youngor, and thoy ||ko to oxpor|onco th|ngs thomso|vos,' Aust|n sa|d. °1hoy
don't want to spond $820,000 on a car ||ko tho lhantom and |ot tho chauttour havo a|| tho tun.'
lot to bo outdono, Vorcodos has rosurroctod tho Vaybach, a tamod |uxury car mado |n
Gormany |n tho 1020s and 1080s. Voasur|ng moro than 20 toot |ong, tho Vaybach 02 costs
$8b8,000 and has a top spood ot 1bb mph. Vaybachs aron't so|d by sa|ospoop|o-thoy'ro
°prosontod' by °ro|at|onsh|p managors.' 1ho backsoats conta|n a rotr|gorator, a rotractab|o
champagno ho|dor (w|th g|assos) and oxtondab|o |og rosts. 1ho soats can bo hoatod or coo|od,
or sot to tho °pu|so' massago sott|ng.
3ont|oy, now ownod by vo|kswagon, roturnod to tho loar|ng 1wont|os to bu||d |ts |atost
Cont|nonta|s, wh|ch so|| tor a moro modost $1b0,000. 3ont|oy says that w|th so much domand, |t
doosn't havo to do any trad|t|ona| corporato advort|s|ng. 3ays a spokoswoman: °1hoso who can
attord tho cars w||| t|nd us.'
Voanwh||o, tho c|ass|c |uxury brands ot 3VW, Vorcodos and 1aguar havo |ost somo ot tho|r
cachot. 3ays Aust|n: °1hoso cars havo bocomo a|most . . . wo||, l hato to say th|s, but a|most
common.'

Painting by Numbora

ln 1081, 3arnoy Ebsworth, a 3t. lou|s travo|-agoncy ownor and art co||octor, gavo a short spooch
at tho 3t. lou|s Art Vusoum. 1ho art markot, ho sa|d, was hoadod tor a hugo run-up |n pr|cos.
1ho roason: s|mp|o supp|y and domand.
Ebsworth saw moro and moro ontropronours ||ko h|m mak|ng hugo tortunos. And most ot thom
woro buy|ng b|g housos and |ook|ng tor showp|oco art to t||| up tho wa||s. Yot tho amount ot
°qua||ty' art ava||ab|o was actua||y shr|nk|ng. Oua||ty, ot courso, |s subjoct|vo |n tho art wor|d. Yot
Ebsworth bo||ovod that thoro was ||tt|o now art bo|ng croatod that wou|d w|thstand tho tost ot t|mo.
And thoro was a shr|nk|ng supp|y ot l|cassos, V|ros and do Koon|ngs.
°ln my bus|noss, l cou|d soo th|s |ncrod|b|o amount ot woa|th bo|ng croatod and trado barr|ors
com|ng down,' ho says. °lt was ||ko monoy and woa|th woro bo|ng manutacturod. 3ut somo ot tho
th|ngs that woa|th ||kos to buy, ||ko art, woro not |ncroas|ng at a||. Attor tho 1070s, thoro was a
gonora| ta|||ng-ott |n tho qua||ty ot Amor|can art. 1horo wasn't onough now supp|y to moot tho
domand. lt you |ookod at a chart, tho domand s|do was go|ng up at a 47-dogroo ang|o. 1ho
supp|y s|do was go|ng down.'
1ho rosu|t: °Wo woro about to soo goomotr|c |ncroasos |n pr|cos.'
At tho t|mo, art doa|ors and co||octors thought Ebsworth was nuts. low thoy w|sh thoy had
||stonod. Whon lon laudor |n 2000 bought Gustav K||mt's Aoo|o B|ocb-Booor l tor $18b m||||on
-tho h|ghost pr|co ovor pa|d tor a work ot art-tho art pross was stunnod. Ebsworth wondorod
why |t took so |ong.
°lt won't bo |ong botoro somoono buys a p|oco tor $1b0 m||||on and thon $200 m||||on.'
1oday, Ebsworth |s r|d|ng tho top ot tho wavo. As ono ot tho |oad|ng co||octors ot postwar and
contomporary art, Ebsworth has amassod a co||oct|on va|uod at botwoon $200 m||||on and $800
m||||on. |o owns Warho|'s tamous Compbo||'s 5oop Coo wltb Coo Opooor, tho on|y ono ot
Warho|'s |con|c |argo pa|nt|ngs that's |n pr|vato hands. |o a|so owns a pr|zod do Koon|ng and
Edward |oppor's tamod Cbop 5ooy.
Ebsworth has novor so|d a s|gn|t|cant pa|nt|ng. Yot |n rocont yoars h|s purchaso ot modorn
works has s|owod, ma|n|y bocauso ho rotusos to pay moro than $10 m||||on tor a p|cturo, pr|c|ng
h|mso|t out ot tho markot tor b|g postwar p|ocos. 1ho most rocont p|oco ho purchasod was a
17th-contury 0utch pa|nt|ng.
°1ho stutt that's good out thoro |s go|ng tor $20 m||||on or $80 m||||on,' ho says. °l run away trom
tho b|g-dog syndromo |n tho auct|on room, whoro ono b|g dog |s try|ng to boat out tho othor b|g
dogs.°
lt's not tho h|gh pr|cos tor °qua||ty' art that bothor Ebsworth. l|casso's Boy wltb Plpo, wh|ch
so|d tor $104 m||||on |n 2004, ho says, was °worth ovory do||ar.' 3o was tho K||mt. What troub|os
h|m-and s|gna|s an |rrat|ona| markot, tuo|od by l|ch|stan| compot|t|on-aro tho hugo pr|cos
bo|ng pa|d tor bad art.
°Whon you soo a |ato '00s l|casso so|||ng tor moro than $1b m||||on, that's crazy. 1hat was h|s
woakost por|od. 1hoso poop|o havo a |ot moro monoy than smarts. 1hoy'ro buy|ng tho namo,
noth|ng o|so. 1ho doa|ors aro t|akk|ng thoso 3-m|nus p|cturos as |t thoy'ro groat works, and
buyors don't know tho d|ttoronco.'
1ho art markot hasn't soon such a run-up |n pr|cos s|nco tho |ato 1080s. And wh||o many say
h|story |s bound to ropoat |tso|t-w|th a spocu|at|vo bubb|o to||owod by a suddon co||apso |n
pr|cos and domand-othors say supp|y and domand w||| d|ctato a cont|nuod r|so |n pr|cos. 1horo
aro, qu|to s|mp|y, too many r|ch poop|o chas|ng tho samo pa|nt|ngs.
1ho b|g auct|ons |n low York havo bocomo ||ko spoctator ovonts tor compot|t|vo spond|ng.
3othoby's and Chr|s-t|o's rackod up comb|nod sa|os ot $720 m||||on dur|ng tho|r ta|| 2000
contomporary-art auct|ons-moro than 10 t|mos tho|r tota| |n 2000.
l|ch|stan|s ||ko tho|r art |argo and |oud. As ono low York doa|or to|d mo, °1oday's co||octors
aro buy|ng w|th tho|r oars, not tho|r oyos.' And thoy want brand namos. 1hoy want tho|r guosts to
not|co tho l|casso s|gnaturo abovo tho d|n|ng tab|o or tho 1ackson lo||ock sp|attor pa|nt|ng noxt
to tho b|g-scroon 1v.
°1hoy'vo got tho yacht and tho throo homos, so what's |ott?' Ebsworth says.
3oyond t||||ng spaco on tho|r wa||s, tho low l|ch havo boon conv|ncod that art |s an |nvostmont
product. Woa|th managors, t|nanc|a| adv|sors, art doa|ors, ga||or|os and auct|on housos havo a||
co||udod to push tho concopt ot art as a way to mako monoy. A Chuck C|oso portra|t |sn't just a
pa|nt|ng, |t's a °noncorro|atod assot.' Art doosn't just ba|anco tho ||v|ng room, |t ba|ancos your
portto||o.
3y turn|ng art |nto a t|nanc|a| product, art doa|ors havo mado tho markot much moro appoa||ng
to l|ch|stan|s. l|ch|stan|s may not undorstand tho cu|tura| |mportanco ot Compbo||'s 5oop Coo
wltb Coo Opooor, but thoy do know that pr|co |ncroasos tor Warho|s havo tar outpacod tho stock
markot |n rocont yoars. 1ho Vo| Vosos ||no Art lndox, wh|ch aggrogatos tho pr|cos ot artworks
that havo boon so|d pub||c|y at |oast tw|co ovor tho|r ||tot|mo, has hand||y outportormod stocks |n
tho past t|vo yoars.
lo group ot l|ch|stan|s has transtormod tho art markot moro than hodgo tundors. Young, now|y
woa|thy and oagor to broak |nto tho ranks ot tho low York cu|tura| o||to, hodgo tundors havo
c|ovor|y adaptod tho|r trad|ng oxport|so to tho art wor|d.
Konnoth Gr|tt|n, tho toundor ot C|tado| lnvostmont Group |n Ch|cago, pa|d moro than $00
m||||on |n 1000 tor lau| Cozanno's Cortolo, 1og ooo lrolt Bow|. 3tovon Cohon has run up an art
tab ot moro than $700 m||||on |n rocont yoars, buy|ng a $b2 m||||on 1ackson lo||ock tor h|s ||brary,
a van Gogh and a Gaugu|n tor tho ||v|ng room (purchasod tor a comb|nod $100 m||||on), and a
Warho| and l|chtonsto|n tor h|s toyor. Cohon pa|d botwoon $8 m||||on and $12 m||||on tor 0am|on
||rst's p|ck|od t|gor shark, wh|ch noodod a comp|oto makoovor attor tho croaturo startod
docompos|ng.
Vany hodgo tundors havo bocomo savvy art t||ppors, us|ng tho|r oxport|so |n t|nanc|a| trad|ng
and markot-mak|ng to buy and so|| pa|nt|ngs. Contomporary art |s ospoc|a||y attract|vo, s|nco
pr|cos aro sot moro by trad|ng act|v|ty than by h|story and cr|t|cs. ln 2008, 0an loob, tho 48-yoar-
o|d hodgo-tund managor partnor at 1h|rd lo|nt llC, bought a pa|nt|ng ca||od UNO-Ooboooo
loos por |o pox, by tho Gorman art|st Vart|n K|pponborgor. ln 200b, ho so|d |t to 3r|t|sh co||octor
Char|os 3aatch| tor a b00 porcont prot|t, mak|ng a qu|ck $1 m||||on.
°W|th th|s k|nd ot art, you can mako your own tasto,' qu|ppod hodgo-tund managor 1amos
Chanos.
3omo hodgo-tund managors |nvost hoav||y |n ono or two art|sts, bu||d up a °pos|t|on' and ho|p
boost tho|r pr|cos botoro un|oad|ng tho works at a prot|t.
0av|d Ganok, who managos lovo| G|oba| lnvostors, bu||t up a s|zab|o pos|t|on |n tho works ot
photographor 0|ano Arbus. Vr. Ganok and h|s w|to |ast yoar p|odgod 18 raro Arbus pr|nts to tho
Votropo||tan Vusoum ot Art, |nc|ud|ng tho wo||-known °A Young Wa|tross at a lud|st Camp, l.1.,
1008,' and °A |am||y on 1ho|r lawn Ono 3unday |n Wostchostor, l.Y., 1008.'
Vr. Ganok a|so ho|pod promoto an Arbus show at tho Vot, wh|ch boostod hor prot||o and
pr|cos. At tho samo t|mo, ho qu|ot|y so|d ott ono ot h|s Arbus pr|nts tor a prot|t.
°1hoso hodgo-tund guys ||ko to trado,' says Androw |abr|cant, a major low York doa|or and a
d|roctor ot tho l|chard Gray Ga||ory. °|or thom, tho |nst|nct to trado |n and out ot t|nanc|a| |ssuos
or |n and out ot p|cturos |s oqua||y compo|||ng.'
ln tact, somo ot tho artworks snatchod up by hodgo-tund tradors havo turnod out to bo bottor
|nvostmonts than wa|| hang|ngs. |odgo tundors havo t|||od tho|r ott|co wa||s w|th tho|r pr|zod
works to |mpross c||onts and tr|onds. 3ut tho works don't a|ways trans|ato |n tho upt|ght wor|d ot
|nvost|ng. 0an loob proud|y d|sp|ayod |n h|s ott|co ono ot l|chard lr|ncos's °3|kor Ch|cks,'
show|ng a top|oss woman on a motorcyc|o, unt|| h|s rabb| camo to tho ott|co and askod h|m to
covor |t up.
Chanos hung a pr|coy Gorhard l|chtor pa|nt|ng |n h|s ott|co, th|nk|ng |t wou|d add a touch ot
soph|st|cat|on. lnstoad, an |mportant c||ont m|stook |t tor a ch||d's t|ngor pa|nt|ng. 1ho p|oco now
hangs |n Chanos's homo.

Watchoa: |t You Eavo to Aak,
You Can't Attord |t

ln 2000, tho low York-basod luxury lnst|tuto-a group that rosoarchos tho woa|th|ost 10 porcont
ot consumors-d|d a survoy to t|nd out wh|ch brand ot wr|stwatch was tho most prost|g|ous |n tho
country. 1o mako suro thoy woro gott|ng qua||ty op|n|ons, thoy po||od poop|o w|th not worths ot
moro than $b m||||on. 1ho rosu|t: lo|ox baro|y mado tho top 10, Cart|or rankod 18th, and tho
vauntod 3roguot brand rankod bth.
1ho w|nnor was |ranck Vu||or, a nowcomor trom 3w|tzor|and that so||s towor than 4,b00
watchos a yoar |n tho Un|tod 3tatos.
°Wo cou|d oas||y so|| moro,' says |ratch Kapr|o||an, pros|dont ot |ranck Vu||or U3A. °3ut thon
our watchos wou|d bocomo common.'
lot ||ko|y. |ranck Vu||or |s ono ot a numbor ot now brands known on|y to tho r|ch. 1hoy havon't
boon commorc|a||zod or choaponod by mass markot|ng, at |oast not yot. And you can on|y buy
thom |n sma|| bout|quo shops (appo|ntmonts roqu|rod). 1ho|r pr|cos onsuro that tho c|ub ot
ownors roma|ns sma|| and oxc|us|vo.
1ho choapost |ranck Vu||or watch, mado trom quartz and sta|n|oss stoo|, costs $4,800. 1ho
most oxpons|vo modo|s now so|| tor moro than $000,000.
|or |ts s|gnaturo p|oco |n 2000, tho company producod tho Aotorn|tas, w|th an otorna| ca|ondar
w|th sp||t-soconds chronograph. 1ho watch prom|sos to to|| tho day, dato, months and moon
phaso tor tho noxt 1,000 yoars (yos, |t doos tako |nto account |oap yoars). 1ho pr|co: $780,000.
3w|ss watch oxports |n tho Un|tod 3tatos grow 17 porcont |ast yoar and tota|od about $170
m||||on |n 2000, up trom $180 m||||on |n 2004. Wh||o lo|ox, Cart|or, l|agot and latok lh|||ppo
cont|nuo to dom|nato sa|os among tho trad|t|ona| o||to, |ranck Vu||or has bocomo tho t|mop|oco
ot cho|co tor tho low l|ch.
°lt's ||ko a pr|vato c|ub,' |ratch says. °Whon you'ro woar|ng a |ranck Vu||or and you soo
somoono o|so woar|ng ono, you koow,° ho says, w|th a w|nk.
|ratch, a jowo|or who woars go|d braco|ots, d|amondstuddod watchos and str|pod 1-sh|rts,
managos |ranck Vu||or U3A trom an o|d warohouso bu||d|ng |n downtown Vanhattan. l askod
h|m what makos a watch worth $000,000 and |ratch trowns.
°Our buyors, thoy wou|d novor ask th|s quost|on. 3ut l w||| try to oxp|a|n |t to you. A watch has to
bo |ntorost|ng. lt has to bo comp||catod. lt has to bo boaut|tu||y dos|gnod, and |ook good. lt has to
bo a watch that you w|nd ovory morn|ng, you c|oan tho parts, you adm|ro tho crattsmansh|p. You
bu||d a ro|at|onsh|p w|th your watch.'
A good watch, ho adds, |s a|so a statomont. 3otoro |ranck Vu||or camo on tho scono, |uxury
brands woro compot|ng to mako tho th|nnost watch poss|b|o. |ranck Vu||or crashod tho markot
w|th b|g, jowo|-oncrustod dos|gns w|th ob|ong tacos and artsy dos|gns.
|orm to||ows tunct|on w|th |ranck Vu||or: Ono ot |ts most popu|ar watchos |s tho Crazy |ours, a
$20,000 t|mop|oco that toaturos m|xod-up numbors on tho taco. 1ho numbor 8 |s p|acod whoro
tho 12 shou|d bo, and tho 2 |s whoro tho 0 usua||y s|ts. 1ho hour hand jumps t|vo p|acos to got to
tho corroct t|mo, wh||o tho m|nuto hand movos norma||y.
l ask a company spokoswoman |t Crazy |our ownors can actua||y to|| tho t|mo.
°At t|rst, |t's tr|cky,' sho says. °loop|o havo troub|o w|th tho numbors, s|nco thoy'ro a|| ovor tho
p|aco. 3ut tho concopt ot tho watch |s to got poop|o to th|nk about t|mo |n a d|ttoront way. lt's to
got thom to not|co that ovory momont |s t|oot|ng. Onco thoy undorstand that, thoy havo a much
oas|or t|mo w|th tho watch.'
Or, as a Boslooss¼ook rov|owor rocommondod, you can woar two watchos: tho |ranck Vu||or
watch to got attont|on, and tho socond watch to t|nd out what t|mo |t |s.

Exµorioncoa: |t |t'a 1uoaday |t Nuat
Bo tho Naaaai ViIIago

Gordon VacGoachy doscr|bos h|mso|t as a ||tosty|omanagomont oxport. 3ut h|s roa| job, as co-
ownor ot V|nt l|tosty|o, |s arrang|ng now tantasy °oxpor|oncos' tor tho r|ch. |or a too ot $20,000
a yoar, VacGoachy can got you a pr|vato tour ot tho 1owor ot london, a satar| |n 3outh Atr|ca
to||owod by a moot|ng w|th lo|son Vando|a or a tront-row soat at lA3A's contro| contor dur|ng a
shutt|o |aunch.
Cons|dor tho |t|norary ho croatod tor a 80-somoth|ng dot-commor who wantod to °oxpor|onco'
3cot|and. 1ho cost ot tho 10-day tr|p: $280,000.
VOl0AY AUGU31 7. Champagno on tho |awn ot a cast|o, to||owod by d|nnor, and a wh|sky
b|ond|ng-and-tast|ng soss|on w|th wor|d-tamous wh|sky oxport lan 3uxton and a h|stor|an's
account ot tho 3att|o ot Cu||odon.
1UE30AY AUGU31 8. 0opart |n ho||coptor to ||gh|ands, rondozvous w|th land lovor tor a
4 × 4 dr|v|ng oxpor|onco. W||d||to tour w|th go|don oag|os and rod door. l|t||ng w||| to||ow.
lunch w|th champagno, |angoust|no, boot t||ots and ||vo squoozo-box mus|c. |a|con d|sp|ay.
3oard ho||coptor to r|vor canyon tor ratt|ng tr|p.
WE0lE30AY AUGU31 0. lrocood to 3k|bo Cast|o tor grouso shoot|ng. Choppor t||ght
ovor boachos ot tho north coast ot lom botoro party at tho 1hroo Ch|mnoys rosort |n tho ls|o
ot 3kyo. ||y to 0onogan Cast|o and transtor to tho Carrour Estato-a pr|vato cast|o on
b,000 acros.
|or a c||ont who ||kod spaco travo|, V|nt got spoc|a| accoss to tho Konnody 3paco Contor |n
||or|da and a soat |n a vll aroa to watch tho spaco shutt|o |aunch-a pr|v||ogo unava||ab|o to
ovoryday taxpayors. |or tho moro amb|t|ous spaco travo|or, thoro |s v|rg|n Ga|act|c, wh|ch |s
a|roady t||||ng up |ts suborb|ta| t||ghts at $200,000 por t|ckot.
|or a c||ont who ||kod cars and wantod to v|s|t Gormany, V|nt arrangod a moot|ng w|th tho
d|roctors ot 3VW, to||owod by tost dr|vos ot a socrot now car and a °spy's tour' ot 3or||n w|th
Varkus Wo|t, tho tamous co|d war spook.
°1hoso aro poop|o who havo a|roady dono a|| tho Aman losorts and |our 3oasons, and thoy
want somoth|ng spoc|a|,' says VacGoachy. °1hoy want to oxpor|onco th|ngs that tho norma|
porson cou|dn't ovon |mag|no.'
At tho samo t|mo, l|ch|stan|s want °gonu|no' oxpor|oncos. 1hoy want to oscapo tho|r
comp||catod wor|d ot pr|vato jots, mu|t|p|o ostatos, houso statts and ontorta|n|ng schodu|os and
soo how tho othor ha|t ||vos. 1hoy want tho s|mp|o ||to, at |oast tor a day or two. V|nt ho|pod ono
woa|thy c||ont tako hor k|ds to a rura| v|||ago |n lnd|a and d|g d|tchos tor two wooks.
3ays VacGoachy: °3ho wantod hor k|ds to know that tho wor|d thoy know |sn't tho wor|d that
most poop|o ||vo |n.'
Or cons|dor th|s |ottor trom a mu|t|m||||ona|ro V|nt c||ont who wont to Atr|ca to ||vo among tho
rura| Konyans, wh||o a|so m|x|ng w|th roya|ty.
°1ho Vaasa| v|||ago v|s|t was a ||tot|mo oxpor|onco that l can't ovon bog|n to art|cu|ato,' tho
|ottor bogan. °A|so, tho oxport protossor gu|do, tho cook|ng |ossons at tho cast|o and oxc|us|vo
|unch on tho |s|and abovo v|c |a||s woro not th|ngs norma| poop|o thought woro roa||st|ca||y
poss|b|o.'

PIutonomica

1ho status spond|ng by l|ch|stan|s has croatod a now wor|d ot consumpt|on at tho top. Yot tho|r
shopp|ng sproo |s a|so sond|ng g|ant r|pp|os through tho Amor|can oconomy.
1ho t|rst and most obv|ous ottoct |s tr|ck|o-down spond|ng. Or, |n tho words ot 1ohn Konnoth
Ga|bra|th, °lt you tood onough oats to tho horso, somo w||| pass through to tood tho sparrows.'
And today's l|ch|stan|s aro pass|ng a |ot ot oats.
Ono day |n tho summor ot 200b, l was |n Groonw|ch, Connoct|cut, work|ng on an art|c|o about
woa|thy hodgo tundors. l wantod to t|nd out how thoy woro transtorm|ng tho town, and ono ot my
stops was V|||or Votorcars, tho |oca| purvoyor ot |orrar|s and 3ont|oys. l was chatt|ng w|th tho
gonora| managor, l|chard Koppo|man, whon ono ot h|s sa|osmon camo ovor and sa|d ho had a
buyor tor a rod |orrar| 800 3p|dor, pr|cod at $22b,000. l t|gurod |t had to bo a hodgo tundor.
°What doos ho do?' Koppo|man askod.
1ho sa|osman pausod. °Wo||,' ho sa|d, °ho's a stonomason.'
l poorod |nto tho showroom and suro onough, thoro was a m|dd|o-agod man |n work boots,
shorts and a 1-sh|rt, covorod |n concroto and dust. |o was stand|ng noxt to tho |orrar|, ho|d|ng a
chockbook. l wa|kod ovor and askod h|m how ho had bocomo so succosstu|.
°3tono wa||s,' ho sa|d. °And pat|os, and marb|o, you know. A|| thoso now housos nood now
wa||s.'
1ho hodgo tundors woro bu||d|ng so many grottoos and stono wa||s |n town that thoy had mado
tho stonomasons r|ch-or at |oast r|ch onough to buy a $22b,000 |orrar|.
1ho t|nanc|a| co|umn|st 0an Gross ca|cu|atod that tho top 1 porcont ot oarnors |n low York C|ty
may support about 1b8,000 sorv|co jobs. °Ono hodgo tund managor who sponds $1 m||||on
annua||y on sorv|cos-a dr|vor and houso statt, |nvostmont and roa|-ostato brokors, rostaurants
and psychothorap|sts-probab|y susta|ns 2b ||vo||hoods.'
1o got anothor v|ow ot tho tr|ck|o-down ottoct, l askod throo l|ch|stan| tam|||os to sond mo tho|r
oxponsos tor 200b. l roproduco thom horo w|thout tho|r namos, s|nco ovon tho proudost
l|ch|stan|s wou|dn't want tho wor|d to know thoy spond $80,000 a yoar on massagos. (lono ot
thoso tam|||os aro prot||od o|sowhoro |n tho book.) A|though somo ot tho oxponsos aro onot|mo
|toms (||ko cars or yachts), thoy g|vo you a rough |doa ot how much today's r|ch aro spond|ng.






A|| thoso massagos and m||||on-do||ar part|os and jot ronta|s may sound ||ko puro |ndu|gonco.
And °tr|ck|o-down' oconom|cs has ta||od to mako a dont |n Amor|ca's grow|ng |noqua||ty gap. Yot
l|ch|stan| spond|ng |s bocom|ng an |ncroas|ng|y |mportant part ot tho U.3. oconomy, |t on|y
bocauso l|ch|stan|s now contro| so much moro woa|th. ln 200b, an oqu|ty stratog|st at C|t|group,
Ajay Kapur, startod wondor|ng why tho Amor|can oconomy wasn't s|ow|ng moro rap|d|y |n 200b
g|von tho suddon |ncroaso |n o|| pr|cos.
Kapur camo up w|th a thoory ho ca||od °tho p|utonomy.' ln p|utonom|os, ||ko tho Un|tod 3tatos,
Canada and tho Un|tod K|ngdom, tho woa|thy account tor a groator sharo ot nat|ona| woa|th,
spond|ng, prot|ts and oconom|c growth whon comparod w|th othor dovo|opod countr|os. Kapur
t|gurod that tho top 20 porcont ot |ncomo oarnors account tor as much as 70 porcont ot
consumpt|on |n tho Un|tod 3tatos. l|ko |t or not, ho sa|d, spond|ng by tho r|ch was propp|ng up
tho oconomy, ovon as tho m|dd|o and |owor c|assos woro strugg||ng.
ln p|acos whoro p|utonom|os ox|st, Kapur wroto, °1horo aro r|ch consumors, tow |n numbor, but
d|sproport|onato |n tho g|gant|c s||co ot |ncomo and consumpt|on thoy tako. 1horo aro tho rost,
tho 'non-r|ch,' tho mu|t|tud|nous many, but on|y account|ng tor surpr|s|ng|y sma|| b|tos ot tho
nat|ona| p|o.'
3o rathor than try|ng to t|guro out why tho avorago Amor|can consumor was st||| spond|ng
dosp|to r|s|ng o|| pr|cos, Kapur tocusod on tho woa|thy. |o tound that s|nco tho woa|thy had so
much d|sposab|o |ncomo, thoy woro |argo|y unconcornod and unattoctod by tho r|so |n o|| pr|cos.
1ho cont|nuod spond|ng by tho r|ch was, |n tact, propp|ng up tho rost ot tho consumor oconomy.
As ono yacht ownor sa|d whon l askod h|m |t ho worr|od about r|s|ng tuo| costs: °3o |t costs mo
$00,000 to t||| up |nstoad ot $40,000. 1hat's noth|ng tor a boat that costs $b m||||on a yoar to
ma|nta|n.'
ln th|s now p|utonomy, w|th °r|ch' consumors and °ovoryono o|so,' compan|os that sorvo tho r|ch
aro prospor|ng. |rom dopartmont storos to hoto|s to automakors to homo bu||dors, bus|nossos |n
ovory |ndustry aro adapt|ng to an |ncroas|ng|y hour-g|ass-shapod oconomy, so|||ng to tho status-
sook|ng r|ch, and tho ponny-p|nch|ng m|dd|o and |owor m|dd|o c|assos. 1horo's Wa|-Vart or
lo|man Varcus, tho |our 3oasons or la Ou|nta, 1ot 3|uo or ||oxjot.
1ho compan|os that succood |n grabb|ng tho l|ch|stan| markot w||| ||ko|y bo among tho b|ggost
w|nnors |n tho com|ng yoars, w|th h|ghor growth ratos, tattor prot|ts and bottor-portorm|ng stocks.
lr|c|ng powor at tho top ot tho consumor cha|n has grown, ovon as cha|ns ||ko Wa|-Vart and
1argot cut pr|cos to hang on to tho|r markots. °lr|c|ng |n th|s markot |s ||ko push|ng an opon door
-thoro's no ros|stanco,' says latasha loar|, ownor ot tho Aston loar| conc|orgo sorv|co |n low
York. °l th|nk somo ot tho now monoy |s worr|od that |t's tacky or rudo to nogot|ato at th|s |ovo|. ln
gonora| thoy aro |oss oxpor|oncod than th|s typo ot consumor |n tho past.'
3us|nossos that havo succoodod |n l|ch|stan aro a|roady outpac|ng tho broador markot. As
part ot h|s stock rosoarch, Kapur croatod an |ndox trom sharos ot compan|os that cator to tho
r|ch, |nc|ud|ng 1u||us 3aor, tho pr|vato bankor, 3u|gar|, l|chomont, wh|ch ovorsoos Cart|or,
0unh||| and othor brands, Kuon|, tho upsca|o travo| agoncy, and 1o|| 3rothors, tho |uxury homo
bu||dor. 3|nco 108b tho l|utonomy lndox has |ncroasod by 17.8 porcont a yoar, wo||
outportorm|ng broador g|oba| |ndoxos.
Ono way to got r|chor, |n othor words, |s to |nvost |n compan|os that sorvo tho r|ch. W|th tho
popu|at|on ot r|ch poop|o oxpand|ng so rap|d|y, woa|thy consumors havo gono trom bo|ng a n|cho
markot to a broad consumor baso. 1ho o|d oconom|c adago ot °3o|| to tho c|assos, ||vo w|th tho
massos' no |ongor ho|ds qu|to as truo, as thoso who so|| to tho °c|assos' aro mak|ng °c|assos'
monoy thomso|vos.
Yot wh||o tho r|ch aro account|ng tor moro ot tho nat|on's spond|ng, thoy'ro a|so account|ng tor
moro ot tho nat|on's dobt. 0osp|to tho|r hugo now tortunos, many ot today's m||||ona|ros-and
ovon b||||ona|ros-aro ||v|ng boyond tho|r moans. 1ho nat|on's r|chost 1 porcont took on $888
b||||on |n dobt botwoon 100b and 2004, most ot |t |n tho torm ot mortgagos and |nsta||mont dobt.
1ho|r dobt grow 28b porcont botwoon 1080 and 2004, wh||o tho|r tota| woa|th grow at ha|t that
rato. 1ho nat|on's r|chost b porcont now acccount tor 20 porcont ot |ts dobt. A|| thoso yachts,
w|no, cars, art, houso statt and a|||gator-sk|n to||ot soats aro start|ng to ch|p away at tho tortunos
ot l|ch|stan|s-ospoc|a||y as tho|r |nvostmont roturns doc||no |n a s|ow|ng stock markot. 1ho
runaway spond|ng by l|ch|stan|s may ho|p oxp|a|n why, ovon though tho|r sharo ot Amor|ca's
|ncomo |s grow|ng, tho|r sharo ot woa|th has roma|nod rough|y tho samo s|nco tho 1080s.
l|ch|stan|s, |n short, aro spond|ng too qu|ck|y to accumu|ato moro pormanont woa|th.
Evon tho r|chost ot today's r|ch can taco short-torm cash crunchos. 1ako tho caso ot larry
E|||son, who was rankod numbor tour on tho |orbos ||st ot r|chost Amor|cans |n 2000, w|th an
ost|matod tortuno ot $10.b b||||on, most |n Orac|o stock.
ln a sor|os ot o-ma||s |n 2002, E|||son's t|nanc|a| adv|sor, lh|||p 3|mon, p|oadod w|th E|||son to
cut back on h|s spond|ng bocauso ho was roach|ng h|s crod|t ||m|t ot moro than $1 b||||on. Wh||o
E|||son's stock |s worth tar moro, ho protorrod to borrow aga|nst tho sharos rathor than so|| thom.
|o was spond|ng $104 m||||on on h|s yacht, $2b m||||on on a v|||a |n 1apan and $20 m||||on a yoar
on °||tosty|o.'
°l'm worr|od larry . . .' 3|mon wroto |n ono o-ma||. °l th|nk |t's |mporat|vo wo start to budgot and
p|an.' |o |ator addod, °Wo havo a tro|ght tra|n go|ng down a track, h|tt|ng a dobt wa||.'
3omo oconom|sts soo a darkor s|do to tho |uxury boom. 1ho tr|ck|o down |n spond|ng has
boon accompan|od by a tr|ck|o down |n asp|rat|ons. W|th so much woa|th parad|ng around, tho
m|dd|o c|ass and ovon uppor m|dd|o c|ass suddon|y too| poor by compar|son and aro spond|ng
boyond tho|r moans to try to koop paco.
ln h|s book Loxory lovor, tho oconom|st lobort |. |rank wr|tos that |av|sh spond|ng at tho top
has sot a now standard tor m|dd|o-c|ass and |owor-|ncomo tam|||os to try to omu|ato. 3|nco tho|r
own wagos aro t|at or ta|||ng, ovoryday consumors aro go|ng |nto dobt, work|ng |ongor hours and
spond|ng |oss t|mo w|th tho|r tam|||os to try to koop up. 1ho t|ood ot h|gh-ond products tor
l|ch|stan|s has a|so sot a now, |rrat|ona| rotoronco po|nt that consumors w||| uso whon mak|ng
tho|r own purchas|ng doc|s|ons. |rank c|tos a porsona| oxamp|o ot shopp|ng tor a gas gr|||. ||s
prov|ous gr|||, wh|ch ho bought |n tho 1080s, cost $80.0b. Whon ho wont |ook|ng tor a now ono,
howovor, ho d|scovorod tho sovon-toot-|ong, sta|n|oss-stoo| v|k|ng-|rontgato lrotoss|ona| Gr|||
tor $b,000.
°1ho roa| s|gn|t|canco ot ottor|ngs ||ko tho $b,000 v|k|ng-|rontgato lrotoss|ona| Gr|||, tor most
ot us, |s that tho|r prosonco makos buy|ng a $1,000 un|t soom a|most truga|. As moro poop|o buy
thoso up-markot gr|||s, tho tramo ot rotoronco that dot|nos what tho rost ot us cons|dor an
accoptab|o outdoor gr||| w||| |nov|tab|y cont|nuo to sh|tt. . . . ln short both tho th|ngs wo too| wo
nood and tho th|ngs ava||ab|o tor us to buy dopond |argo|y-boyond somo po|nt, a|most ont|ro|y-
on tho th|ngs that othors chooso to buy.'
As a rosu|t, |rank arguos, tho nat|on's nonr|ch aro wast|ng tho|r t|mo and monoy try|ng to koop
up w|th tho woa|thy. 1hoy aro a|so, ho says, ru|n|ng tho onv|ronmont and tho|r commun|t|os |n tho
procoss. 1ho raco to mako moro monoy to koop up w|th tho r|ch, ho says, |s tho roason
Amor|cans aro spond|ng |oss t|mo w|th ch||dron and |oss t|mo s|oop|ng. lt's a|so tho roason
Amor|cans too| |oss happy, s|nco happ|noss |s part|y dotorm|nod by how wo|| wo'ro do|ng
comparod w|th thoso around us. 1ho raco, ho sa|d, w||| on|y got moro dostruct|vo as tho r|ch got
r|chor and moro numorous.
°Ch|ot oxocut|vos w||| havo to s|gna| tho|r woa|th and pos|t|on by bu||d|ng housos w|th not
b0,000 squaro toot ot ||v|ng spaco but 100,000, by buy|ng cars that cost not $100,000 but
$200,000, wr|stwatchos that cost not $2b,000 but $b0,000, and so on.
°1hoso now h|ghor |ovo|s ot spond|ng w||| causo cont|nuod osca|at|on |n tho commun|ty
consumpt|on standards that othors too| compo||od to moot.'
ln sum, tho l|ch|stan| ponchant tor prot||gacy has croatod now bonot|ts and dangors tor tho
oconomy. lt's support|ng now sorv|co jobs tor wa|tors, but|ors, ma|ds and 3ont|oy doa|ors. 3ut
l|ch|stan|s aro a|so ho|p|ng to push tho Un|tod 3tatos doopor |nto dobt, both through tho|r own
borrow|ng, and through tho borrow|ng ot ovoryday consumors try|ng to m|m|c tho|r spond|ng.
|Ol a|| tho|r oxcoss, howovor, l|ch|stan|s aro a|so a char|tab|o |ot. And just as thoy aro rodot|n|ng
|uxury, thoy'ro a|so rodot|n|ng char|ty. 1ho|r now mothods ot g|v|ng havo provon h|gh|y
controvors|a|. 3ut |t thoy'ro succosstu|, and |t thoy to||ow through on tho|r prom|sos to donato |argo
port|ons ot tho|r tortunos (both b|g lís) , l|ch|stan|s cou|d ho|p br|ng about swoop|ng changos |n
ovoryth|ng trom hoa|th caro and sc|onco to tho arts, g|oba| povorty and oducat|on.


8

PERFORNANCE
PE|LAN1EROPY

GIvIng |or Results

lh|||p 3orbor |ovos p|ck|ng t|ghts w|th tho status quo.
A 1ow|sh lr|shman who now ||vos |n 1oxas, 3orbor has spont most ot h|s 4b-yoar ||to droam|ng
up tochno|ogy compan|os that d|srupt tho ostab||shmont. ln tho m|d-1000s, ho croatod
Cy3orCorp, an on||no trad|ng systom that a||owod |nd|v|dua| |nvostors to buy and so|| stocks
d|roct|y trom tho|r homo computors. 1ho prom|so was rovo|ut|onary-to bypass brokors ||ko
Vorr||| lynch and ushor |n a now ora ot do-|t-yourso|t (and |oso-|t-yourso|t) |nvost|ng. Whon tho
lntornot took ott, so d|d Cy3orCorp, a||ow|ng 3orbor to so|| tho bus|noss to Char|os 3chwab
Corp. |n 2000 tor moro than $4b0 m||||on.
°|or a 1ow|sh k|d trom 0ub||n, that was moro monoy than l ovor |mag|nod,' ho says, |n h|s
3outhorn-tr|od broguo.
low, trom a makosh|tt ott|co |n suburban Aust|n, 3orbor |s |aunch|ng a now vonturo that cou|d
bo ovon moro rovo|ut|onary.
0rossod |n h|s dot-commor un|torm ot khak|s and po|o sh|rt, 3orbor dashos around h|s
contoronco room out||n|ng h|s bus|noss p|an. ||s now company, ho oxp|a|ns, |s ak|n to a vonturo-
cap|ta| tund, |nvost|ng |n start-ups and ontropronours. l|ko Cy3orCorp, |t bypassos an ont|ro
|ndustry ot t|nanc|a| m|dd|omon to do||vor sorv|cos moro ott|c|ont|y. |o ta|ks about h|s roturns on
|nvostmont, h|s quant|tat|vo ana|ysos and r|gorous projoct managomont. |o t|||s a notopad w|th
dozons ot t|owcharts, X-Y graphs and maps ot h|s markot aroa. |o goos on a t|rado about h|s
compot|tors, who ho says aro °wastotu|' and °arrogant.'
°What l'm do|ng |s vory ak|n to tho 0o|| (computor) modo|,' ho says. °lt's a d|roct do||vory ot a
product.'
1ho on|y d|ttoronco |s that 3orbor's bus|noss doosn't mako a product. lt doosn't havo a sa|os
dopartmont, or advort|s|ng, or growth targots, and |t doosn't mako any monoy. ||s company, |n
tact, |s |n tho bus|noss ot glvlog owoy monoy. lt's ca||od A G||mmor ot |opo, and |t's 3orbor's
porsona| char|ty. 3o tar ho's g|von G||mmor $100 m||||on, or about ha|t h|s tota| tortuno. And |n tho
procoss, ho's ho|p|ng to croato a now k|nd ot ontropronour|a| char|ty.
3orbor |ns|sts ho's not °g|v|ng away' h|s monoy. |o hatos b|ack-t|o ba||s and tho soc|a|
c||mb|ng that posos as char|ty |n p|acos ||ko la|m 3oach. |o shuns awards and wou|d novor
th|nk ot wr|t|ng a chock to a b|g |nst|tut|on ||ko tho lod Cross, wh|ch ho says wastos donor monoy
on statt, markot|ng and uso|oss roports.
lnstoad, 3orbor ca||s h|mso|t a °soc|a| ontropronour.' An |mpat|ont man, w|th a c|oan|y shavod
hoad, a runnor's phys|quo and a ||ghtn|ng-tast m|nd, 3orbor has doc|dod to run h|s char|ty moro
||ko a toch start-up. |o's not |n tho bus|noss ot donat|ng monoy, ho's |n tho bus|noss ot |nvost|ng
|n soc|a| chango, domand|ng concroto rosu|ts and soarch|ng tor dot-com-sty|o ott|c|onc|os.
°l'm not g|v|ng anyth|ng to anybody,' ho says. °1horo |s no char|ty w|th mo. l'm a soc|a| |nvostor
|nvost|ng cap|ta| tor soc|a| prot|ts.'
3orbor's p|an to savo tho wor|d through roturn-on-assot modo|s wou|d bo amb|t|ous by any
standard. Yot ho's takon h|s oxpor|mont ono stop turthor. |o's doc|dod to app|y h|s soc|a|-
|nvostor thoor|os to ono ot tho most comp|ox and |ntractab|o soc|a| prob|oms |n tho wor|d-
povorty |n Eth|op|a.
3o tar, 3orbor |s post|ng |mpross|vo rosu|ts.
3|nco 2001 G||mmor has spont moro than $10 m||||on |n Eth|op|a. lt's bu||t 1,0b7 wator wo||s,
br|ng|ng c|oan wator to moro than 880,000 poop|o. lt's bu||t 100 schoo|s, oducat|ng moro than
112,000 studonts. lt's croatod 00 hoa|th c||n|cs, sorv|ng 700,000 poop|o, and |aunchod 24 vot
c||n|cs tor tarm an|ma|s, bonot|t|ng 102,000 poop|o.
|o's ovon proudor ot h|s ott|c|oncy. 3orbor's projocts |n Eth|op|a, ho says, somot|mos cost ha|t
as much as s|m||ar projocts run by tho b|g a|d groups. |o can do||vor wator, tor |nstanco, tor
$b.74 por porson, or hoa|th caro tor $4.01 por porson.
°1h|s |sn't rockot sc|onco,' says 3orbor, who has actua||y workod |n rockot sc|onco. °1horo |s
no mag|c to what wo'ro do|ng. 1h|s |s app|y|ng tundamonta| |ossons l |oarnod as a bus|noss
ontropronour and roapp|y|ng |t as a soc|a| ontropronour. 1h|s |s a b|uopr|nt and |t |s who||y
app||cab|o to whatovor ph||anthrop|c causo touchos anybody's hoart. l on|y w|sh moro poop|o
wou|d try |t.'
|o's a|roady w|nn|ng convorts. Computor b||||ona|ro and to||ow 1oxan V|chao| 0o|| has
donatod $b00,000 to G||mmor, and 3|||con labs toundor 0avo Wo||and has a|so donatod
sovora| hundrod thousand, ovon though 3orbor |sn't sook|ng outs|do monoy. ln tho summor ot
2000, 3|r l|chard 3ranson summonod 3orbor to h|s pr|vato |s|and |n tho Car|bboan to sook h|s
adv|co (a|ong w|th othor g|oba| po||t|ca| |oadors and bus|noss ch|ots) on addross|ng soc|a| and
onv|ronmonta| |ssuos around tho wor|d.
°Wo wantod to havo h|m thoro to tap |nto h|s un|quo oxpor|onco |n us|ng bus|noss pr|nc|p|os to
approach soc|a| |ssuos |n ordor to dr|vo susta|nab|o rosu|ts,' sa|d a 3ranson spokoswoman.
3orbor has a|so mado Eth|op|a somoth|ng ot a tam||y crusado. Evory summor, |nstoad ot
hoad|ng to tho boach, ho packs up h|s w|to and throo k|ds and t||os to tho Eth|op|an outback tor
sovora| wooks to |oarn moro about tho ||vos and noods ot tho |oca|s. 0ur|ng a tr|p |n tho summor
ot 2000, tho 3orbors woro grootod ||ko k|ngs |n tho Eth|op|an v|||agos, w|th thousands ot |oca|s
surround|ng tho|r joop and ho|d|ng up s|gns that road °1hank You 3orbor!'
Yot wh||o 3orbor may bo gott|ng acco|ados trom Eth|op|ans and to||ow ph||anthrop|sts, ho's
prov|ng |oss popu|ar w|th tho b|g nonprot|ts. ln tact, ho's bocomo tho|r worst n|ghtmaro. 1hrough
G||mmor, 3orbor |s show|ng that tho woa|thy don't nood to g|vo monoy to tho Un|tod Way, lod
Cross, CAlE and tho rost ot tho char|ty ostab||shmont. 1ust as Cy3orCorp bypassod tho b|g
brokors, G||mmor |s prov|ng that today's l|ch|stan|s don't nood b|g nonprot|ts to carry out tho|r
good works. 1ho b|g lGOs, 3orbor says, aro hoadod toward oxt|nct|on un|oss thoy chango tho|r
wastotu| ways.
°Vost lGOs, |t thoy woro pr|vato compan|os, wou|d bo |n bankruptcy,' 3orbor says. °ln our
||tot|mo, wo'ro go|ng to soo tho w|nds ot chango and wo'ro go|ng to soo donors bocomo moro
oducatod about d|roct|ng tho|r do||ars. lt anyono know that somo ot thoso char|t|os on|y spond 10
conts ot ovory do||ar on tho poop|o thoy c|a|m to bo ho|p|ng, thoy wou|d bo shockod.'
|or tho|r part, tho char|t|os say 3orbor |s a m|sgu|dod noophyto who shou|d just st|ck to
sottwaro.
°l havo no |doa how ho cou|d arr|vo at tho conc|us|on that ho wou|d bottor undorstand tho
prob|oms ot Eth|op|a than our organ|zat|on,' says Adam ||cks, a spokosman tor CAlE. °You
havo to undorstand tho wor|d contoxt |n wh|ch Eth|op|a ox|sts, to undorstand doop|y tho tood
|ssuos and oxport|ng wor|d. Wo havo poop|o who mako |t tho|r ||to study to undorstand thoso
|ssuos. You can't just go |nto Eth|op|a and say, 'l know ovoryth|ng thoro |s to know about
Eth|op|a.'' |o adds, °CAlE stattors aro h|gh|y tra|nod |n what thoy do. 1hoy aro agronom|sts and
doctors and ong|noors. 1hoy aro moro than wo|||ntont|onod do-goodors.'
Char|t|os ||ko CAlE, howovor, had bottor got usod to poop|o ||ko lh|| 3orbor.

Comµotitivo AItruiam

lh|||p 3orbor |s part ot a now gonorat|on ot ph||anthrop|sts. A|ong w|th g|v|ng away rocord
amounts ot cash, today's l|ch|stan|s aro rad|ca||y chang|ng tho way tho r|ch g|vo back to soc|oty.
1ota| char|tab|o g|v|ng |n tho Un|tod 3tatos has jumpod to moro than $200 b||||on-doub|o tho
|ovo| ot 100b. Amor|cans w|th |ncomos ot moro than $1 m||||on donatod moro than $80 b||||on to
char|t|os |n 2008, up trom $0 b||||on |n 100b, |n koop|ng w|th tho|r popu|at|on growth.
lh||anthropy has novor boon moro tash|onab|o, w|th da||y announcomonts about th|s or that
sottwaro magnato g|v|ng $100 m||||on to h|s a|ma mator, or anothor buyout k|ng g|v|ng $20 m||||on
tor a now musoum w|ng. |onorary p|aquos now covor count|oss schoo|s, musoums, concort ha||s
and ovon park bonchos.
1ho bus|noss pross, onco |oory ot r|ch poop|o boar|ng g|tts, now covors ph||anthropy ||ko a
compot|t|vo |ndustry. Boslooss¼ook pub||shos an annua| rank|ng ot tho b0 top g|vors-a k|nd ot
|orbos 400 tor compot|t|vo a|tru|sts. 7bo ¼o|| 5troot 1ooroo| runs a °G|tt ot tho Wook' co|umn,
dota|||ng tho donat|ons ot now|y r|ch hodgo tundors, doa| makors, toch toundors and corporato
ch|ots.
1ho numbor ot grant-mak|ng toundat|ons |n tho Un|tod 3tatos has moro than doub|od s|nco
1000, to moro than 07,000. 1hoso toundat|ons-usod ma|n|y by tho woa|thy to moro porsona||y
d|roct tho|r char|tab|o g|v|ng-havo assots ot moro than $b00 b||||on.
Grantod, many l|ch|stan|s v|ow char|ty as a choap way to burn|sh tho|r |mago. Othors s|mp|y
want to buy tho|r way |nto soc|oty, and somo g|vo bocauso thoy'ro d|scovor|ng that thoy can't
poss|b|y spond tho|r tortunos |n tho|r ||tot|mo and don't want to |oavo a |ogacy ot spo||od ch||dron.
Whatovor tho|r mot|vos, l|ch|stan|s aro pour|ng hugo amounts |nto ph||anthropy. 3||| Gatos's
$81 b||||on toundat|on |s tho |argost |n h|story-moro than t|vo t|mos |argor (|n 200b do||ars) than
tho amount g|von away by tho country's prov|ous ph||anthrop|c g|ant, 1ohn 0. lockoto||or. 1ho
Gatos |oundat|on rocont|y got ovon b|ggor w|th Warron 3uttot's $81 b||||on g|tt |n 2000.
E|| 3road, tho 3unAmor|ca toundor, has g|von away moro than $1.4 b||||on tor pub||c oducat|on,
arts and sc|onco. V|chao| 0o|| has p|odgod moro than $1 b||||on tor ch||dron's hoa|th caro, and
bankor |orbort V. 3and|or and h|s w|to, Var|on, announcod p|ans to g|vo away a|most a|| ot tho
$2 b||||on thoy roco|vod trom tho sa|o ot tho|r Ca||torn|a sav|ngs and |oan |n 2000.
3oyond tho s|zo ot tho|r g|v|ng, l|ch|stan|s aro a|so chang|ng tho way thoy g|vo. 1hoy'ro no
|ongor contont just to hand a chock to char|ty and assumo |t w||| bo spont w|so|y. l|ko 3orbor thoy
want a say |n whoro tho|r monoy goos, and thoy want rosu|ts. 3oup ||nos and handouts aro passo.
1ho now buzzwords aro °soc|a| prot|ts' and °h|ghongagomont g|v|ng.'
1ho sh|tt |s duo part|y to tho |nottoct|vonoss ot b|g char|t|os. ln 2008, tormor sonator 3|||
3rad|oy and consu|t|ng t|rm VcK|nsoy 8 Co. ro|oasod a study show|ng that U.3. char|t|os wasto
moro than $100 b||||on on tund-ra|s|ng costs and adm|n|strat|vo oxponsos. Othor rocont stud|os
havo tound that b|g toundat|ons havo bocomo autocrat|c, |so|atod and moro tocusod on so|t-
prosorvat|on and tancy ott|cos than on so|v|ng g|oba| prob|oms.
°1horo's a groator roa||zat|on ot tho |nott|c|onc|os ot tho o|d organ|zat|ons,' says lon
loro|man, tho b||||ona|ro t|nanc|or. °Wo now havo tho ab|||ty to moasuro tho|r ott|c|oncy and
ottoct|vonoss and doc|do whoro to g|vo.'
As a rosu|t, l|ch|stan|s don't want to croato b|g toundat|ons that |ast torovor. 1hoy want to g|vo
tho|r monoy away now, wh||o thoy can onjoy tho pra|so and contro| tho procoss. ln a 200b survoy
ot poop|o worth moro than $80 m||||on, by 3oston Co||ogo's Contor on Woa|th and lh||anthropy,
0b porcont sa|d thoy p|annod to donato moro ot tho|r woa|th dur|ng tho|r ||tot|mos than |n tho|r
ostatos.
°loop|o roa||zo you can't tako |t w|th you,' says 3andy Wo|||, tormor C|t|group lnc. ch|ot
oxocut|vo and cha|rman, who has g|von away $000 m||||on |n tho past 10 to 1b yoars. °lt's a |ot
bottor to do a |ot ot th|s ph||anthropy wh||o you'ro st||| a||vo and you havo tho onorgy. Wo can uso
our bra|npowor to mako tho wor|d a bottor p|aco now-not to |oavo a bunch ot monoy that w||| bo
around |n 100 yoars. 3o|ng tho b|ggost toundat|on doosn't |ntorost us at a||.'
1ho changos aro a|so bo|ng dr|von by tho way |n wh|ch most l|ch|stan|s mado tho|r tortunos.
As wo saw |n tho 1h|rd Wavo chaptor, many ot today's b|ggost tortunos como trom tho boom|ng
t|nanc|a| and tochno|ogy markots. l|ch|stan|s aro ontropronours, d|strusttu| ot |nst|tut|ons and
cont|dont ot tho|r own ab|||t|os to romako markots. 1hoy t|guro that thoy shou|d bo ab|o to g|vo
away tho|r monoy tho samo way thoy mado |t.
3||| 0rayton, tho managomont consu|tant and po||cy oxport who co|nod tho torm °soc|a|
ontropronour,' says that soc|a| ontropronours p|ay by a d|ttoront sot ot ru|os than tho rost ot tho
char|ty wor|d. 1hoy aro moro ||ko oconom|c rovo|ut|onar|os than gontoo| bonotactors.
°1ho job ot a soc|a| ontropronour |s to rocogn|zo whon a part ot soc|oty |s stuck and to prov|do
now ways to got |t unstuck. |o or sho t|nds what |s not work|ng and so|vos tho prob|om by
chang|ng tho systom, sproad|ng tho so|ut|on and porsuad|ng ont|ro soc|ot|os to tako now |oaps.
3oc|a| ontropronours aro not contont just to g|vo a t|sh or toach how to t|sh. 1hoy w||| not rost unt||
thoy havo rovo|ut|on|zod tho t|sh|ng |ndustry.°
1ho top soc|a| ontropronours |nc|udo poop|o ||ko Gordon Vooro, tho lnto| cotoundor who has
p|odgod moro than $7 b||||on to soarch tor p|onoor|ng naturo consorvat|on and oducat|on projocts
around tho wor|d. 1ott 3ko||, a tormor o3ay oxoc, sooks out ontropronour|a| nonprot|t |oadors and
g|vos thom addod tund|ng.
lon loro|man doc|dod to donato m||||ons to an amb|t|ous cancor doctor |n Ca||torn|a rathor
than g|v|ng to tho Amor|can Cancor 3oc|oty or othor b|g toundat|on. W|th ho|p trom loro|man, tho
doctor, 0onn|s 3|aman, ho|pod dovo|op |orcopt|n, wh|ch |s now w|do|y usod |n tho troatmont ot
broast cancor.
°3uro, thoro was a r|sk |t wou|dn't work out,' loro|man sa|d. °3ut |t's ||ko any bus|noss or
transact|on. lt tho guy has a h|story ot portormanco and you havo cont|donco |n h|m, you tund |t.'
1ho low York-basod lob|n |ood |oundat|on, mado up most|y ot hodgo tundors, ra|sod $48
m||||on at |ts annua| d|nnor |n 2000 to t|ght povorty |n low York C|ty and ho|ds rogu|ar °|nvostor
updatos' tor |ts g|vors. lt a|so croatos a °portto||o' ot groups and causos to tund, basod on tho|r
r|sk and m|ss|ons. lts board ot d|roctors tunds a|| tho adm|n|strat|vo costs, so thoy can prom|so
that 100 porcont ot donat|ons go to tho poop|o who nood |t.
Ot courso, tho r|so |n so-ca||od so|t-d|roctod g|v|ng has a|so producod |ts sharo ot to|||os. 0rug-
company ho|ross luth l|||y, tor |nstanco, donatod $100 m||||on |n stock to tho Ch|cago-basod
lootry |oundat|on |n 2008. 1ho g|tt |ott a sma|| group ot roc|us|vo poots to t|ght ovor tho m||||ons
and strugg|o w|th now phrasos ||ko °portto||o d|vors|t|cat|on' and °prudont man' thoory.
And somo vonturo ph||anthrop|sts havo takon °soc|a| prot|ts' to an oxtromo. l|orro Om|dyar,
toundor ot o3ay, has to|dod h|s char|tab|o Om|dyar |oundat|on |nto tho Om|dyar lotwork, wh|ch
makos tor-prot|t |nvostmonts. Om|dyar |n 2000 gavo $100 m||||on |n o3ay stock to 1utts
Un|vors|ty tor a m|crot|nanco program that w||| |ond monoy to banks, |nst|tut|ona| oqu|ty tunds and
othor |nst|tut|ons to |ond to tho poor |n dovo|op|ng countr|os. 1utts |s sook|ng a roturn on |ts
program ot 0 porcont or bottor. 1ho $1 b||||on toundat|on sot up by Goog|o toundors 3orgoy 3r|n
and larry lago prom|sos to t|ght povorty, d|soaso and g|oba| warm|ng, wh||o a|so mak|ng prot|ts
by tund|ng start-up compan|os and torm|ng partnorsh|ps w|th vonturo cap|ta||sts.
°Attor a tow yoars try|ng to bo a trad|t|ona| ph||anthrop|st, l askod myso|t, |t you aro do|ng good,
try|ng to mako tho wor|d a bottor p|aco, why ||m|t yourso|t to non-prot|t?' Om|dyar to|d 7bo
Ecooomlst.
Char|ty |s a|so bocom|ng |ncroas|ng|y compot|t|vo. 1oday's r|ch don't just want to do wo|| by Char|ty |s a|so bocom|ng |ncroas|ng|y compot|t|vo. 1oday's r|ch don't just want to do wo|| by
do|ng good: 1hoy want to bo tho bost at do|ng good. Orac|o's larry E|||son, who's p|odgod to
g|vo away moro than $000 m||||on, ranks h|s to||ow ph||anthrop|sts not by how much thoy'vo g|von,
but what k|nd ot rosu|ts that can show.
°Unt|| you start so|v|ng prob|oms, unt|| you start cur|ng d|soasos, unt|| you start do||vor|ng
rosu|ts, what d|ttoronco doos |t mako how much you g|vo?'' E|||son sa|d.
Var|o Var|no, a tormor sottwaro magnato who's bocomo ono ot tho |oadors ot tho vonturo
ph||anthropy movomont, says ho's worr|od that somo ot today's vonturo ph||anthrop|sts may havo
gono too tar. l|ch donors, tor |nstanco, aro |ncroas|ng|y show|ng up at |nnor-c|ty commun|ty
contors and try|ng to run thom ||ko tho|r compan|os-|gnor|ng tho sons|t|v|t|os and oxport|so ot
tho statt.
°1ho typ|ca| porson trom bus|noss comos |n and th|nks ho's smartor than thoso poop|o and
th|nks ho's tho sav|or,' Var|no says. °And tho nonprot|t poop|o just th|nk tho guy's a groody,
advorsar|a| 3O3 who wou|d tako b|ood trom a turn|p. 1horo's st||| a b|g gap botwoon tho donors
and tho nonprot|ts.'
Var|no says l|ch|stan|s, ospoc|a||y thoso who mado tho|r monoy ovorn|ght, tond to
ovorost|mato tho|r ab|||ty to t|x |ncroas|ng|y comp|ox soc|a| prob|oms.
°What happons whon monoy comos qu|ck|y |s that poop|o don't roa||zo that thoy'ro not as br|ght
as tho|r monoy suggosts. 1oo many t|mos poop|o como |n w|th hugo ogos and try to chango tho
wor|d. l mado tho m|stako myso|t tho t|rst tow yoars, and now l'vo |oarnod that arroganco |s a
curso |n th|s t|o|d.'
3t|||, contro|-troak ph||anthropy |s horo to stay. And many ot |ts most av|d propononts, ||ko lh|||p
3orbor, aro a|roady us|ng |t to addross somo ot soc|oty's b|ggost prob|oms.

RoboI with a Cauao

On a 1hursday attornoon, 3orbor |s s|tt|ng at h|s contoronco tab|o sw|gg|ng a 3tarbucks. |o's
annoyod. Evon whon ho's happy, 3orbor's r|ght oyobrow archos up s||ght|y h|ghor than h|s |ott,
g|v|ng h|m a |ook ot porpotua| surpr|so. Whon ho gots omot|ona|, tho brow archos ovon h|ghor,
bocom|ng a k|nd ot outrago motor. At tho momont, ho's outragod at tho way most ot tho low
l|ch go about tho|r ph||anthropy. And tho brow |s at tu|| statt.
°Whon poop|o como |nto woa|th, thoy'ro bo|ng tostod,' ho says. °lart ot hav|ng woa|th |s to bo
a custod|an and guard|an tor tho wo||-bo|ng ot our tam|||os and thoso that aro our brothors and
s|stors outs|do ot our countr|os.'
1ho Amor|can r|ch, ho says, havo trad|t|ona||y ta||od tho tost. Whon thoy g|vo to char|ty, thoy'ro
usua||y do|ng |t to c||mb tho soc|a| |addor, w|n tr|onds, or advanco tho|r bus|noss |ntorosts. 3|ack-
t|o ba||s aro puro d|sp|ay, ho says, and havo noth|ng to do w|th so|v|ng tho wor|d's prob|oms.
°l ca|| |t danc|ng tor tho do||ar or too|-good ph||anthropy. 3omoono wr|tos a chock tor tho|r a|ma
mator, attor thoy'vo boon courtod and strokod, and thoy too| good attorward. lt's soc|a|-ogo
ph||anthropy, whoro you got |oca| pra|so. You want to bo soon donat|ng. 1horo's noth|ng humb|o
about |t, thoy want to bo v|s|b|o and thoy want tho|r namo on ovoryth|ng. 3oc|a|-ogo ph||anthropy
and too|-good ph||anthropy aro a|| about rospond|ng to roquosts. 1hat's not what l'm about.'
3orbor's ph||anthrop|c journoy bogan |ong botoro ho was r|ch. 3orn |n 0ub||n to a 1ow|sh
c|oth|ng makor, 3orbor grow up w|th a strong sonso ot bo|ng tho outs|dor and cu|tura| m|nor|ty.
|o p|ayod on a 1ow|sh soccor toam, wh|ch wou|d got troquont r|bb|ng trom tho Catho||c
oppononts.
°lt was amus|ng roa||y,° 3orbor |aughs. °|oro woro thoso 11 c|rcumc|sod 1ows p|ay|ng tootba||
aga|nst a|| tho Catho||cs, so you'd got tho occas|ona| commont.'
Whon ho was a toonagor, 3orbor startod roa||z|ng that ho was d|ttoront |n othor ways. As|do
trom bo|ng a math wh|z, ong|noor|ng gon|us and abstract th|nkor, ho not|cod that ho procossod
|ntormat|on much moro qu|ck|y than h|s tr|onds. |o cou|d |ook at a pr|ntod pago and absorb tho
|mportant tacts w|th|n soconds. 3orbor wasn't just a spood-roador, ho was a human |asor
scannor.
°l don't th|nk l'vo ovor t|n|shod a book,' ho says. °l wou|dn't nood to. l can p|ck up tho |mportant
tacts just by |ook|ng at a pago.' 3orbor a|so raro|y watchos a mov|o stra|ght through, s|nco ho
|osos pat|onco.
Attor co||ogo, ho workod tor a dotonso contractor (honco, tho rockot sc|onco), thon ho|d a
str|ng ot corporato jobs |n london w|th |ord, Avon and 3ausch 8 lomb. Evontua||y, ho struck out
on h|s own and |aunchod compan|os bu||t on art|t|c|a| |nto|||gonco and t|nanc|a| modo|s. Vost ot
thom t|oppod. Yot ono company took ott and morgod w|th a 1oxas company. ln 1000, 3orbor and
h|s w|to, who's 3r|t|sh, movod to |ouston.
°lt's sato to say l was tho on|y lr|sh 1ow |n |ouston,' ho says.
Attor a tow yoars, 3orbor got t|rod ot a|| tho corporato po||t|cs and qu|t. |o movod h|s tam||y to
Aust|n bocauso °at |oast |t was groon.'
ln 100b, ho v|s|tod ono ot tho t|rst day-trad|ng ott|cos |n |ouston and roa||zod tho bus|noss had
hugo potont|a|. 1ho lntornot was just com|ng ot ago, and ho roa||zod that stock tradors cou|d uso
tho Wob to trado stocks on tho|r own and broak troo trom tho pr|coy Wa|| 3troot brokors. |o
stayod up tor 24 hours wr|t|ng a bus|noss p|an. W|th|n a tow months, ho |aunchod Cy3orCorp.
As day trad|ng oxp|odod, so d|d Cy3orCorp. 3orbor workod 10-hour days wr|t|ng trad|ng
modo|s and grow|ng tho company. |rom h|s crampod ott|co |n suburban Aust|n, 3orbor was
mount|ng a stoa|thy attack on Vorr||| lynch, 3m|th 3arnoy and tho b|g low York stock oxchangos.
°Wo woro tak|ng on Wa|| 3troot, wo woro tak|ng on lasdaq and shak|ng tho ostab||shmont,'
3orbor says. °1horo was a roa| robo| sp|r|t |n what wo woro do|ng. Wo woro gott|ng r|d ot tho
oxpons|vo, ontronchod m|dd|omon and |ovo||ng tho p|ay|ng t|o|d.'
At |ts poak |n 1000 tho company had moro than $20 m||||on |n rovonuos and moro than 1b0
omp|oyoos. 3orbor was |nvo|vod |n a|most ovory aspoct ot tho bus|noss, trom h|r|ng and
markot|ng to sottwaro and |awsu|ts. °lt was a||consum|ng,' ho sa|d. °Evon whon l was homo, my
w|to sa|d l wasn't roa||y homo.'
ln |obruary ot 2000, Char|os 3chwab Corp. ottorod to buy Cy3orCorp tor about $4b0 m||||on |n
stock. 3orbor to|t tho company was worth °maybo ha|t that,' so ho jumpod at tho ottor. |o nottod
moro than $220 m||||on. ||s t|m|ng was portoct: 1ho lntornot crashod wooks |ator, and o|octron|c-
trad|ng stocks p|ummotod. Evon though ho was pa|d |n 3chwab stock, 3orbor so|d tho bu|k ot h|s
ho|d|ngs botoro |t h|t bottom.
°Attor 20 yoars, l bocamo an ovorn|ght succoss,' ho says.
3orbor prom|sod to stay at tho company at |oast a yoar to ho|p w|th tho trans|t|on. 1ho samo
n|ght ho so|d Cy3or-Corp, howovor, h|s now caroor as a vonturo ph||anthrop|st was a|roady
unto|d|ng.
1ust botoro m|dn|ght on |obruary 1, 2000, 3orbor was s|tt|ng |n h|s hoto| room |n low York,
putt|ng tho t|na| touchos on tho doa|, whon h|s w|to, 0onna, burst |n tho room. 3ho had just spont
tho day at tho Eth|op|an ombassy |n Wash|ngton, 0.C., moot|ng w|th tho country's char|ty ||a|son.
1ho 3orbors had boon tasc|natod by Eth|op|a ovor s|nco 108b, whon thoy attondod tho 3and-A|d
rock concort at Womb|oy 3tad|um to bonot|t Eth|op|an tam|no v|ct|ms. 1ho |magos ot omac|atod
ch||dron, and tho ro|o that organ|zor 3ob Go|dot p|ayod |n ra|s|ng awaronoss tor tho causo,
|nsp|rod tho 3orbors. 1hoy prom|sod thomso|vos that |t thoy ovor camo |nto monoy, Eth|op|a
wou|d bo tho|r numbor ono causo.
ln 1000, attor so|||ng somo sharos ot pr|vato stock |n tho company, tho 3orbors sot as|do
$200,000 to tund an orphanago |n Eth|op|a. Whon 0onna v|s|tod tho ombassy to work out tho
dota||s, sho mot a man namod 1amoru Abasaba-a |oarnod a|d oxport who camo trom ono ot
tho poorost rog|ons ot Eth|op|a. 1amoru's job at tho ombassy was to coord|nato a|d by
Amor|cans to Eth|op|a.
0ur|ng tho moot|ng, both 1amoru and 0onna cr|od as thoy ta|kod about tho 1080s tam|no.
1amoru to|d hor that croat|ng an orphanago was a n|co |doa, but that tho Eth|op|ans roa||y
noodod c|oan wator and hoa|th caro.
1amoru roca||s: °l sa|d to 0onna '1ust go thoro and soo tor yourso|t. Ask tho Eth|op|ans what
thoy nood. 1hon doc|do.''
0onna t|ow to Add|s Ababa and spont sovora| days hand|ng out broad and c|othos to crowds
ot s|ck ch||dron hudd|od on tho stroots ot tho c|ty.
°Vy who|o wor|d oponod up,' 0onna roca||s. °l had no tramo ot rotoronco |n my own m|nd, so to
show up and to soo that k|nd ot suttor|ng and dospa|r and prob|oms that woro so vast |n naturo, |t
changod my porspoct|vo. At tho samo t|mo that thoso poop|o woro suttor|ng, thoy woro a|so so
d|gn|t|od and proud.'
lh|||p mado h|s own tr|p to Eth|op|a a tow months |ator and was oqua||y transtormod.
°Whon l camo back trom Eth|op|a, l know that my days ot work|ng tor a ||v|ng, ot bo|ng a
corporato ontropronour woro numborod,' ho says. °lt tota||y changod my th|nk|ng.'
3orbor ros|gnod |n |ato 2000, and ho and 0onna doc|dod to comm|t $100 m||||on |n 3chwab
stock to G||mmor. Wh||o tho 3orbors st||| ||vo vory comtortab|y-thoy chartor p|anos, havo a b|g
houso and dr|vo a s||vor |orrar|-thoy p|an to g|vo ovon moro ot tho|r tortuno away as t|mo goos
on.
°|or 0onna and mo, wo d|dn't como trom th|s Amor|can mator|a||st|c th|ng. |or mo th|s work
soomod much moro tu|t||||ng than hoard|ng do||ars tho rost ot our ||vos.'
3t|||, 3orbor wasn't roady to abandon h|s toch-start-up bus|noss |mpu|sos. ||s who|o ||to had
boon bu||t around t|nanc|a|-trad|ng modo|s, lntornot sottwaro, sca|ab|||ty and roturn on assots. |o
was a dyod-|n-tho-woo| ontropronour, a|ways |ook|ng tor choapor, tastor ways ot do||vor|ng
products or sorv|cos. |or 3orbor, ott|c|oncy was k|ng. And ho wasn't about to g|vo |t up tor somo
touchy-too|y not|on ot ph||anthropy.
°1horo was noth|ng ph||anthrop|c about dot-coms and day trad|ng,' ho says. °0onna startod
th|s journoy trom tho hoart. |or mo |t was st||| about my hoad.'
3o 3orbor doc|dod to g|vo away h|s tortuno tho samo way ho mado |t-by to||ow|ng h|s
bus|noss |nst|ncts. |o croatod a bus|noss p|an, wroto a m|ss|on statomont and sot °prot|t targots'
and goa|s. At t|rst, tho Eth|op|ans d|dn't know what to mako ot 3orbor's corporato zoa|. 3omo
|oca| lGOs that ho tr|od work|ng w|th rotusod, say|ng thoy cou|dn't to||ow a|| tho str|ct ru|os. Othors
d|dn't bo||ovo 3orbor wou|d mako good on h|s prom|sos.
°1hoy sa|d l was way too young to havo so much monoy to g|vo away,' 3orbor sa|d. °1hoy
d|dn't th|nk l roa||y had |t.'
ln |aunch|ng G||mmor, 3orbor camo up w|th h|s own sot ot ru|os. 1hoy aro, ho says, bas|c
pr|nc|p|os ot bus|noss that any ph||anthrop|st can app|y to char|tab|o g|v|ng. |oro aro tho top t|vo
3orbor's lu|os:
1. Know Your Cuatomor. 3orbor bogan G||mmor ||ko a|| h|s othor bus|nossos, w|th |ntons|vo
rosoarch. |o porod ovor dozons ot tomos on agr|cu|turo, d|soaso and Eth|op|an cu|turo. |o
scannod stud|os on oducat|on, tho h|story ot povorty, Atr|can po||t|cs and g|oba| woathor pattorns.
|o ta|kod to othor a|d groups to t|nd out what thoy woro do|ng and what causos woro bo|ng
ovor|ookod.
||s bost rosoarch, howovor, camo trom tho Eth|op|ans thomso|vos.
°Wo wont to tho poorost v|||agos and askod tho poop|o what thoy most wantod,' 3orbor says.
°Eth|op|ans may bo poor, but thoy'ro not stup|d. l'm sorry to say that tho bu|k ot |ntornat|ona| a|d
starts |n an |vory towor somowhoro |n Wash|ngton or whorovor and thon tho ox-pats to|| tho
Atr|cans what |t |s thoy nood and want.'
3orbor d|scovorod that what tho Eth|op|ans wantod most was c|oan wator. 3o ho bu||t wo||s.
Attor that, thoy wantod schoo|s, so ho bu||t schoo|s. Attor that, thoy wantod jobs, so ho |aunchod
an |nnovat|vo program tor tarmors that wou|d |ncroaso tho|r |ncomos and domand tor |abor.
3orbor acknow|odgos ho can't know ovoryth|ng about Eth|op|a's prob|oms. 1hat's why ho h|rod
1amoru-tho Eth|op|an lGO oxport-to run G||mmor ot |opo's ott|co |n Add|s Ababa.
°You h|ro tho bost doma|n oxport|so, just ||ko |n bus|noss,' ho says.
2. Cut Coata, Romovo tho NiddIoman. 3orbor |s obsoss|vo about costs. ||s t|rst act as a
ph||anthrop|st was to road Graham |ancock's book 7bo Loros oí Povorty, an oxposo on tho
corrupt|on, oxp|o|tat|on and |nott|c|oncy ot nongovornmonta| organ|zat|ons (lGOs). 1ho book
conv|ncod h|m that |t ho wantod to ho|p Eth|op|ans, ho had to do |t h|mso|t.
At somo char|t|os, |oss than b0 conts ot ovory do||ar donatod wont to tho poor, ho |oarnod. 1ho
rost ot tho monoy wont to buroaucrac|os and b|oatod ovorhoad. Whon ho wont to Atr|ca, ho otton
saw h|gh|y pa|d Wostorn a|d workors dr|v|ng around |n sh|ny lango lovors and sond|ng tho|r
k|ds to top pr|vato schoo|s-a|| pa|d tor by donors who thought thoy woro g|v|ng to tho poor. On a
t||ght to Eth|op|a onco, 3orbor sat noxt to a Wor|d 3ank workor who was t|y|ng t|rst c|ass. 3orbor
askod tho man what ho was do|ng |n Eth|op|a.
°|o sa|d ho was travo||ng thoro to wr|to a roport. Why was th|s guy t|y|ng t|rst c|ass to produco
somo 800-pago roport?'
3orbor ca||s G||mmor a °socuro p|po||no' or °d|roct a|d,' ||ko 0o||'s °d|roct-sa|os' modo| tor
porsona| computors.
|o omp|oys on|y about a dozon poop|o |n crampod ott|cos |n Aust|n, london and Add|s Ababa
(h|s char|ty a|so tunds projocts |n tho Un|tod K|ngdom and 1oxas). |o doosn't havo any sa|os,
markot|ng or tund-ra|s|ng costs, s|nco ho tunds G||mmor h|mso|t.
Onco tho monoy gots to Atr|ca, 3orbor has a stroam||nod b|dd|ng procoss that turthor roducos
costs and ||m|ts corrupt|on. l|ko a monoy managor, G||mmor °a||ocatos' a corta|n amount to oach
ot tho country's rog|ons. G||mmor's rog|ona| partnors-sma||, |oca| lGOs-thon ask Eth|op|ans |n
a|| tho v|||agos about tho|r most pross|ng noods. loxt, tho lGOs sond a proposa| to G||mmor
a|ong w|th a s|mp|o sproadshoot, wh|ch 3orbor can comparo w|th othor lGOs. G||mmor
porsonno| a|so mako troquont s|to v|s|ts to chock tho work.
°lt an lGO |n ono rog|on says |t w||| cost $102 por hoad to bu||d a schoo|, and wo'ro bu||d|ng
ono noarby tor $08, wo won't tund |t,' 3orbor says. °lt somoono's way out ot ||no on costs, that's a
s|gn ot corrupt|on.'
8. EoId 1hom AccountabIo. 3orbor has portormanco targots bu||t |nto ovory grant ho makos.
Whon ho tunds a sma|| lGO |n Eth|op|a, ho pays |t on|y tor tho t|rst quartor. lt |t ach|ovos |ts goa|s
-d|gg|ng a corta|n numbor ot wo||s, or start|ng a schoo|-ho tunds tho lGO a socond quartor. lt
|t doosn't, |t |osos tho tund|ng.
At t|rst, tho Eth|op|an lGOs rosontod tho procoss. 1hoy saw |t as ovor|y domand|ng and
pun|t|vo. 3orbor says a|most ha|t tho groups G||mmor tunds don't mako |t past tho t|rst or socond
quartors. low, ho says, most ot tho groups aro usod to |t.
°1hoso dovo|op|ng nat|ons havo bocomo dopondont on handouts,' ho says. °Grants bocamo
an ont|t|omont. 1horo |s no trust, o|thor ot tho donors or ot tho roc|p|onts. Wo'ro try|ng to chango
that.'
At tho samo t|mo, 3orbor has cut down on paporwork. 3|g char|t|os thr|vo on roports. 3orbor
hatos thom. lathor than ask|ng tho lGOs ho tunds to sond |ongthy dota||s on tho|r work, 3orbor
domands conc|so, two-pago summar|os and ono-pago sproadshoots.
°loop|o wou|d g|vo us thoso th|ck roports and wo'd push thom back,' 3orbor says. °lt wo had
onough poop|o to road tho roports, wo wou|dn't havo monoy to go to tho poop|o.'
1ho roports aro t||od quartor|y, so 3orbor can spot prob|oms qu|ck|y. |o a|so ho|ds wook|y
to|ocontoroncos w|th tho ont|ro statt. °lt tho whoo|s aro com|ng ott a projoct, l want to know about |t
as soon as poss|b|o.'
lt's takon yoars tor Eth|op|ans to got usod to 3orbor's roport|ng procoss. 3ut now ho works w|th
10 or 12 sma|| lGOs who havo adoptod h|s systom.
4. |nvoIvo Your Cuatomora. 1oo many char|ty projocts |n Atr|ca ond up dy|ng trom nog|oct.
1ho donors |oso |ntorost and tho roc|p|onts |oso |n|t|at|vo. 3orbor says tho socrot to |ong-torm
succoss-known as °susta|nab|||ty' |n char|ty spoak-|s to |nvo|vo tho |oca| Eth|op|ans trom tho
vory bog|nn|ng.
°Wo buy tho br|cks, thoy bu||d a wa||. Wo buy tho p|po, thoy d|g tho tronch.'
|or wator wo||s, tor |nstanco, 3orbor ho|pod sot up |oca| wator comm|ttoos that can manago
tho wo||s and t|x thom whon thoy broak. Wo||s bu||t by |ntornat|ona| lGOs, by contrast, aro otton
|ott |n d|sropa|r bocauso tho |oca|s don't havo tho parts tor ropa|rs.
b. Lovorago Your DoIIara. ln bus|noss, 3orbor |oarnod tho powor ot |ovorago-p|ggyback|ng
on othor poop|o's monoy to |ncroaso your own roturns. G||mmor usos |ovorago by tund|ng tho
|oca| lGOs |n Eth|op|a, who a|roady got somo tund|ng trom tho Eth|op|an govornmont. 1ho
groups got G||mmor's monoy, and G||mmor gots tho lGOs' |oca| oxport|so.
lt's a|so start|ng to work w|th |ntornat|ona| a|d. last yoar, 3orbor startod th|nk|ng about how to
croato oconom|c dovo|opmont and h|ghor wagos |n Eth|op|a. |o startod rosoarch|ng tho
country's |argost markot-m||||ons ot tarmors who ||vo on a do||ar a day or |oss. |o camo up w|th
tho |doa ot buy|ng an |rr|gat|on pump and a||ow|ng tarmors to buy |t w|th a sovon-yoar, no-|ntorost
|oan. |o tound a tost group ot tarmors |n tho romoto town ot Ad|na |as, |n tho prov|nco ot 1|gray.
At t|rst, tho Eth|op|ans woro ro|uctant to pay tor somoth|ng that wou|d bonot|t thom yoars |ator. 3ut
3orbor prova||od. |armors who onco got ono crop a yoar now got two. 1ho|r avorago |ncomo,
wh|ch was onco $110 a yoar, has soarod to $1,200.
1ho Europoan Un|on was so |mprossod w|th tho rosu|ts that |t gavo a grant to tho prov|nco ot
1|gray to tund 200 moro ot 3orbor's |rr|gat|on systoms.
°Wo'ro sow|ng tho soods ot soc|a| cap|ta|,' ho says. °l can't so|vo Atr|ca's prob|oms. 3ut maybo
l can doa| w|th ono ||tt|o patch ot tho qu||t, and |t wo got that r|ght, othor poop|o w||| rop||cato |t.'
3orbor adm|ts thoro aro t|mos whon h|s r|gorous bus|noss modo| broaks down tor char|t|os.
1ho morn|ng attor tho As|an tsunam| |n 2004, ho and h|s tam||y sat around tho broaktast tab|o
and doc|dod to donato $1 m||||on to tho causo. 1ho troub|o was, lh|||p cou|dn't t|nd a char|ty that
mot h|s tosts tor ott|c|oncy and bus|noss tocus. lt took h|m throo wooks, and hours and hours ot
rosoarch to t|nd a tow ro||ot groups that ho was comtortab|o tund|ng.
°1ho |mpu|so to g|vo was opon-hoartod but thon tho hoad k|ckod |n,' ho says. °lt l just wantod to
g|vo away tho monoy to too| good, l cou|d havo g|von to tho lod Cross. 3ut tho soc|a| |nvostor |n
mo had to do my homowork.'
3orbor rocogn|zos that ho's |nvontod a caroor that has novor roa||y ox|stod. |o's not a mombor
ot tho °|d|o r|ch,' or a trad|t|ona| ph||anthrop|st. And ho's not roa||y an ontropronour, s|nco ho g|vos
away monoy. ||s bus|noss card s|mp|y roads °lh|||p 3orbor-G||mmor ot |opo.' Whon poop|o
ask h|m what ho doos tor a ||v|ng, ho usua||y tudgos tho answor.
°l roa||y strugg|o w|th that,' ho says. °l w|sh l had a qu|ck word poop|o undorstood.
lh||anthrop|st? l can hard|y spo|| tho word. |uman|tar|an? 1hat's too h|ghta|ut|n'. lt l say char|ty
work, that's wrong, too. lt l say soc|a| ontropronour or soc|a| |nvostor, poop|o say, 'Oh, you'ro a
bankor?' 3o l'm k|nd ot at a |oss on that ono.'
ln tho ond, 3orbor just hopos ho can mako a d|ttoronco |n a part ot tho wor|d that noods |t most. ln tho ond, 3orbor just hopos ho can mako a d|ttoronco |n a part ot tho wor|d that noods |t most.
And, porhaps |n tho procoss, ho hopos to |oad tho way to a now brand ot ph||anthropy.
°What's my |ogacy?' ho says. °l don't know. l guoss l don't ask to bo romomborod tor anyth|ng.
Vy noods aro moro s|mp|o than that. Wo do what wo can dur|ng th|s ||tot|mo tor tho wo||-bo|ng ot
thoso who aro |oss tortunato. Whon l'm s|x toot undor and |y|ng |n a box . . . |ogacy, shmogacy, |t
doosn't mattor. l'm onjoy|ng what l'm do|ng |n th|s ||tot|mo, and |t l ho|pod a tow poop|o and sot a
good oxamp|o tor my ch||dron, that wou|d bo groat.'


0

NOVE OVER,
CER|51|AN COAL|1|ON

1he New PolItIcal KIngmakers

|or moro than 40 yoars, tho Co|orado |og|s|aturo was dom|natod by lopub||cans.
1ho GOl, rootod |n tho stato's W||d Wost ||bortar|an|sm and backod by |oca| o|| magnatos,
ranchors and corporato ch|ots, was synonymous w|th tho Co|orado Estab||shmont. 1ho party
contro||od tho stato |ouso and 3onato s|nco tho 1000s, w|th on|y br|ot v|ctor|os by tho
0omocrats. 3y 2004, w|th Goorgo W. 3ush on h|s way to carry|ng tho stato a socond t|mo, tho
Co|orado lopub||cans soomod |nv|nc|b|o. (1ho 0omocrat|c swoop ot Congross |n 2000 was st|||
yoars away.)
°1horo was a m|nd-sot that wo cou|dn't |oso,' says A|an lh||p, a lopub||can stratog|st |n
Co|orado. °1horo was a sonso that tho 0omocrats d|dn't havo tho rosourcos or potont|a| to tako
tho |og|s|aturo.'
1hon, a|ong camo tho Gang ot |our.
ln tho oar|y ta|| ot 2004, tho stato was suddon|y t|oodod w|th ma|||ngs, 1v ads and rad|o spots
attack|ng lopub||can cand|datos. lay Vart|noz, a popu|ar lopub||can cand|dato tor tho stato
3onato |n |ort Co|||ns, camo homo ono day to t|nd a ma||or that showod h|m poop|ng |nto a
woman's bodroom. °lay Vart|noz wants to contro| what goos on |n your bodroom,' tho pamph|ot
sa|d, cr|t|c|z|ng h|s staunch pro||to stanco. Anothor ma|||ng portrayod h|m |oung|ng on tho boach
|n ||or|da and sa|d ho was tak|ng vacat|ons on tho taxpayor d|mo. (As tho |ort Co|||ns mayor, ho
had gono to ||or|da tor a mayors' contoronco.)
Othor lopub||can cand|datos tacod s|m||ar broads|dos. A 1v commorc|a| targot|ng
lopub||can U.3. loprosontat|vo Var||yn Vusgravo showod an ovorwo|ght b|ondo |n a p|nk su|t
stoa||ng a watch trom a corpso, p|ck|ng tho pockots ot
U.3. so|d|ors |n lraq and dunk|ng a tam||y |n tox|c wasto-h|gh||ght|ng Vusgravo's pos|t|ons on
so|d|or pay and onv|ronmonta| |ssuos. Othor 1v and rad|o ads accusod |oca| lopub||cans ot
bow|ng to oxtrom|st |doo|oguos who carod moro about push|ng a Chr|st|an agonda than t|x|ng
tho stato's moro pross|ng prob|oms ||ko oducat|on, hoa|th caro and jobs.
1ho mossagos struck a chord w|th votors. On lovombor 8, Co|oradans handod tho GOl a
stunn|ng dotoat. Vart|noz and othors, who had strong |oads botoro tho advort|s|ng b||tz, woro
hand||y dotoatod. ln tho 3onato, tho GOl's ono-voto major|ty swung to a ono-voto 0omocrat|c
advantago. Voro surpr|s|ng|y, tho 0omocrats p|ckod up sovon soats |n tho |ouso, g|v|ng thom
contro|. lt was tho t|rst t|mo tho 0omocrats ru|od both housos s|nco 1001.
1ho lopub||cans had boon outspont by throo to ono |n many racos. ln tho Vart|noz raco a|ono,
tho oppononts spont a rocord $1 m||||on or moro to Vart|noz's $8b0,000. ln a stato whoro tho
GOl had a|ways boon tho party ot tho r|ch and powortu|, party |oadors scramb|od to t|guro out
whoro a|| th|s now, 0omocrat|c monoy was com|ng trom. Campa|gn t|||ngs showod tho tunds
camo trom tour organ|zat|ons-tho Coa||t|on tor a 3ottor Co|orado, |orward Co|orado, A|||anco
tor a 3ottor Co|orado and A|||anco tor Co|orado |am|||os. lo ono had ovor hoard ot tho groups,
wh|ch woro a|| b27s-tho ||ght|y rogu|atod advocacy groups that can pour un||m|tod amounts ot
monoy |nto o|oct|ons.
Evon moro surpr|s|ng was tho tact that tho vast major|ty ot tho tund|ng tor tho groups camo
trom just tour |nd|v|dua|s. 1hoy woro a|| Co|oradans and thoy woro a|| vory r|ch. 1hroo ot thom
woro so|t-mado toch ontropronours, and ono was tho b||||ona|ro ho|ross ot a mod|ca|-dov|co
tortuno. Wh||o thoy had a|| boon act|vo |n stato po||t|cs ovor tho yoars, thoy had novor toamod up
to transtorm an |mportant o|oct|on. 1ho lopub||cans brandod thom °tho Gang ot |our,' and
accusod thom ot torm|ng a caba| so r|ch and powortu| that thoy cou|d buy o|oct|ons.
°1hoso tour |nd|v|dua|s had a hugo |mpact,' lh||p to|d mo. °1hoy woro vory tocusod, thoy had a
goa| and thoy oxocutod |t. 1horo |s ||tt|o doubt that |og|s|ators and cand|datos |n tho stato ot
Co|orado aro wary ot gott|ng on tho wrong s|do ot thoso to|ks.'
1ho Gang |nc|udod 1arod lo||s, a 82-yoar-o|d dot-com wh|z who's a|roady croatod and so|d
sovora| toch compan|os and has a not worth ost|matod at moro than $200 m||||on. lt |nc|udod 1|m
G|||, a tormor sottwaro magnato who's worth moro than $400 m||||on and who's bocomo tho
nat|on's top tundor ot gay-r|ghts causos. lound|ng out tho group was lat 3trykor, tho b||||ona|ro
ho|ross to tho 3trykor mod|ca|-dov|co tortuno, and lutt 3r|dgos, a goophys|c|st who mado h|s
monoy croat|ng sottwaro tor o|| oxp|orat|on and had a tortuno worth tons ot m||||ons.
1hoy camo trom vast|y d|ttoront backgrounds and |doo|og|os. Yot thoy un|tod around ono b|g
|doa-to croato groator opportun|t|os tor a|| Co|oradans. 1hoy wantod moro monoy spont on
oducat|on, hoa|th caro and job croat|on. ln contrast to woa|thy lopub||cans, who otton advocatod
|oss govornmont and |owor taxos (ospoc|a||y tor tho r|ch), tho Gang ot |our wantod moro pub||c
support tor tho |oss tortunato. As 3r|dgos to|d a |oca| nowspapor, °1horo aro roasons as a
soc|oty wo support pub||c tunct|ons. Wo soom to bo |os|ng that. 1horo's th|s att|tudo wo havo to
|owor taxos and havo |oss govornmont.'
Ot courso, tho mombors ot tho Gang ot |our woro act|ng part|y out ot so|t-|ntorost. 3r|dgos and
lo||s woro both cons|dor|ng a run tor h|ghor po||t|ca| ott|co, wh||o G|||, who's opon|y gay, had a
porsona| stako |n |oad|ng tho crusado tor gay r|ghts. Yot through tho|r 2004 campa|gn and tho|r
cont|nuod ottorts, tho Gang ot |our |s try|ng to croato a now k|nd ot r|chman's po||t|cs. lathor than
try|ng to uso govornmont to mako thomso|vos r|chor-through |owor taxos or spoc|a| handouts tor
tho|r bus|nossos-thoy soo govornmont as a too| tor moro progross|vo agondas. Wh||o tho|r
campa|gn has gono |argo|y unnot|cod boyond Co|orado, tho Gang ot |our may s|gna| a broador,
nat|ona| sh|tt |n tho po||t|cs ot tho woa|thy.

Loar[ot LiboraIa

1ho Amor|can woa|th boom has croatod a now gonorat|on ot r|ch act|v|sts. Whothor thoy'ro
tund|ng campa|gns or runn|ng tor ott|co, l|ch|stan|s aro omorg|ng as a major torco |n Amor|can
po||t|cs. 1hoy'vo conquorod tho bus|noss wor|d, and now thoy want powor.
1hoy como trom a|| po|nts a|ong tho po||t|ca| spoctrum. |or ovory |ott-|oan|ng Goorgo 3oros
thoro's a r|ght|oan|ng 1. 3oono l|ckons. Yot |t's tho r|ch 0omocrats who aro hav|ng tho groatost
|mpact-and not just bocauso ot tho rocont GOl cr|s|s |n Wash|ngton. 1ho onormous woa|th
croatod |n tho nat|on's ||bora| know|odgo cap|ta|s-low York, Ca||torn|a, 3oatt|o, Aust|n, 0onvor,
3oston and Wash|ngton-has spawnod a now gonorat|on ot |ott-|oan|ng m||||ona|ros and
b||||ona|ros. Vany a|so grow up dur|ng tho 1000s, dur|ng a t|mo ot |ncroasod sons|t|v|ty to
m|nor|t|os and tho undorc|ass. 1hoso °loarjot ||bora|s,' to uso author 1onathan lauch's torm, aro
cha||ong|ng tho storootypo ot r|ch po||t|cos who soo govornmont as a too| to advanco tho|r woa|th.
lnstoad, thoy'ro us|ng tho|r woa|th as a too| to advanco govornmont.
3omo aro runn|ng tor ott|co. 1ho numbor ot cand|datos spond|ng moro than $1 m||||on ot tho|r
own monoy on tho|r campa|gns has soarod trom an avorago ot throo a yoar |n tho 1080s and
1000s to 24 |n tho 2004 o|oct|on. 1on Corz|no, a tormor Go|dman 3achs oxoc, spont $01 m||||on
ot h|s own monoy to w|n a U.3. 3onato soat and sovora| m||||on do||ars to bocomo low 1orsoy's
govornor. V|chao| 3|oomborg, tho t|nanc|a| |ntormat|on magnato whoso pos|t|ons on soc|a|
|ssuos aro moro 0omocrat|c than lopub||can, spont $74 m||||on to bocomo low York C|ty's
mayor, and anothor $77 m||||on to got roo|octod (that works out to bo about $100 por voto).
0omocrat Var|a Cantwo|| spont noar|y $10 m||||on ot hor own tortuno to w|n a 3onato soat |n tho
stato ot Wash|ngton, and W|scons|n 0omocrat |orb Koh| spont noar|y $b m||||on ot h|s own to
rota|n h|s 3onato soat.
1onn|tor 3toon, a po||t|ca| sc|onco protossor at 3oston Co||ogo and tho author ot 5o|í-
llooocoo Cooolootos lo Coogrosslooo| E|octloos, says that |oans and contr|but|ons trom
cand|datos |ncroasod trom $80.0 m||||on |n 1000 to $124.7 m||||on |n 2004. W|th campa|gns
bocom|ng so oxpons|vo, and tund-ra|s|ng bocom|ng moro rostr|ctod bocauso ot campa|gn-
t|nanco |aws, po||t|cs has |ncroas|ng|y bocomo a batt|o ot m||||ona|ro vorsus m||||ona|ro.
1ho r|chost ot tho low l|ch cand|datos tond to bo 0omocrats. A study by 3toon showod that
among cand|datos who spont moro than $4 m||||on on tho|r campa|gns-what 3toon ca||s °supor
oxtromo so|t-t|nancors'-0omocrats outnumbor lopub||cans by throo to ono. Among °k|nd-ot-
oxtromo so|t-t|nanc|ors,' or thoso who spond $1 m||||on to $4 m||||on, lopub||cans outnumbor
0omocrats by a|most two to ono. ln othor words, tho lopub||cans may ru|o lowor l|ch|stan, but
tho 0oms ru|o tho top.
1ho trond a|so ho|ds truo tor votors. A survoy dono by woa|th rosoarchor luss A|an lr|nco
dur|ng tho 2004 o|oct|ons showod that most s|ng|o-d|g|t m||||ona|ros backod lros|dont 3ush |n
tho 2004 o|oct|on, c|t|ng h|s tax cuts and othor °pockotbook' |ssuos. 1ho major|ty ot suporr|ch
votors, or thoso worth $10 m||||on or moro, supportod 1ohn Korry, say|ng thoy carod moro about
tho onv|ronmont, budgot dot|c|ts, hoa|th caro and oducat|on, wh|ch woro soon as Korry |ssuos.
lr|nco says tho study shows that tho suporr|ch aro moro accustomod to th|nk|ng |ong torm,
ovor sovora| gonorat|ons. 1ust as thoy p|an tho|r ostatos and |nvostmonts to |ast 100 yoars
(bocauso thoy can), thoy a|so v|ow po||t|cs as a |ongor-torm propos|t|on. 1hoy don't havo to voto
trom tho|r pockotbooks, s|nco tho|r pockotbooks aro a|roady tat onough. 1hoy'ro moro concornod
w|th g|oba| warm|ng, tho ta|||ng U.3. oducat|on systom and a|||ng hoa|thcaro systom-|ssuos that
w||| moro ||ko|y attoct tho|r grandch||dron.
°At a corta|n |ovo| ot woa|th, you caro moro about th|ngs ||ko tho onv|ronmont and what's go|ng
to happon to |ator gonorat|ons than prosorv|ng your own monoy,' lr|nco says.
1hoso aron't tho gu||t-r|ddon °||mous|no ||bora|s' ot o|d, who arr|vod at tho|r po||t|ca| v|ows
|argo|y out ot ombarrassmont ovor tho|r unoarnod r|chos. l|ch|stan|s mado tho|r monoy
thomso|vos and thoy want to prosorvo tho systom ot ta|rnoss and opportun|t|os thoy had grow|ng
up. 1hoy soo govornmont moro ||ko an oxtons|on ot tho|r ph||anthropy-a way to |ovorago tho|r
char|tab|o do||ars to br|ng about groator soc|a| chango. 1hoy havo spont m||||ons to t|ght povorty,
|mprovo tho onv|ronmont, t|x |nnor c|t|os and curo d|soaso. And thoy'ro now roa||z|ng that a|| tho|r
ph||anthrop|c donat|ons aro a drop |n tho buckot comparod w|th govornmont spond|ng |n tho
samo aroas.
As ono oducat|on ph||anthrop|st to|d mo, °Whon you |ook at what l spond comparod to what
govornmont sponds on schoo|s, |t's ||ko p|ss|ng |n tho w|nd.' 3o to havo |mpact, today's
ph||anthrop|sts a|so want a say |n d|roct|ng govornmont tunds.
3||| Gatos, tor |nstanco, has donatod moro than $100 m||||on to ho|p |mprovo low York C|ty
schoo|s. Yot V|chao| 3|oomborg, who spont ovon moro to got o|octod as low York mayor, has
oxortod groator |nt|uonco by ho|p|ng to d|roct tho c|ty's $12 b||||on schoo| budgot.
°1o tho mayor, po||t|cs |s soon as a h|gh|y ottoct|vo torm ot ph||anthropy,' says ono a|do (though
somo oppononts and toachors' un|ons, ot courso, m|ght d|sagroo).
1horo aro st||| p|onty ot l|ch|stan|s who want to uso govornmont to got r|chor. Voro than a
dozon woa|thy tam|||os-|nc|ud|ng tho Ga||os ot w|nomak|ng tamo, and tho Vars candy c|an- dozon woa|thy tam|||os-|nc|ud|ng tho Ga||os ot w|nomak|ng tamo, and tho Vars candy c|an-
havo |obb|od succosstu||y tor a roduct|on |n tho ostato tax. ln h|s book ¼oo|tb ooo Lomocrocy,
Kov|n lh||||ps arguos that tho Amor|can r|ch havo cons|stont|y corruptod po||t|c|ans and
man|pu|atod govornmont to roap |argor tortunos, ospoc|a||y dur|ng woa|th booms.
°1ho ossonco ot p|utocracy, tu|t|||od |n 2000,' lh||||ps wr|tos, °has boon tho dotorm|nat|on and
ab|||ty ot woa|th to roach boyond |ts own roa|m ot monoy and contro| po||t|cs and govornmont as
wo||. ln Amor|ca, oxp|a|ns po||t|ca| sc|ont|st 3amuo| |unt|ngton, 'monoy bocomos ov|| not whon |t
|s usod to buy goods but whon |t |s usod to buy powor . . . oconom|c |noqua||t|os bocomo ov||
whon thoy aro trans|atod |nto po||t|ca| |noqua||t|os.''
Yot tho stor|os ot 1arod lo||s and 1|m G||| ottor anothor, moro hopotu| s|gn tor tho ottoct ot
woa|th on po||t|cs.

Nuking tho COP

1arod lo||s |s |ato tor |unch. 3natch|ng h|s 0o|| |aptop trom h|s dosk, tho bospoctac|od m||||ona|ro
racos out tho door ot h|s th|rd-t|oor ott|co |n downtown 3ou|dor. lt's a sunny 3optombor day, w|th
tho jaggod lock|os soar|ng to a crysta|-b|uo sky. lo||s doosn't not|co tho woathor. 0rossod |n a
go|t sh|rt, 0ockors and h|k|ng boots, ho's g|uod to h|s co|| phono as ho spood-wa|ks to h|s
apartmont a tow b|ocks away.
|o arr|vos to a crowd ot about a dozon poop|o wa|t|ng |n h|s ||v|ng room. lo||s's homo |s moro
1r|boca than 3ou|dor, t|||od w|th brushod stoo|, tubu|ar |amps and ank|o-h|gh sotas. A hugo t|sh
tank t|||od w|th cora| and ango|t|sh g|ows |n tho ontryway, and tho ||v|ng room |s dom|natod by a
g|ant t|at-scroon 1v and tour |oathor |oungo cha|rs. 0ozons ot sh|ny coppor pots hang trom tho
co|||ng k|tchon, though lo||s |ator acknow|odgos, °1hoy'ro ma|n|y tor show. l don't roa||y havo t|mo
to cook.'
1ho poop|o gathorod aro a|| tr|onds and tam||y ot 1arod's. Vost aro r|ch 0omocrats. 1hoy
|nc|udo 0av|d |r|odman, a prom|nont tund-ra|sor and ownor ot a cha|n ot oxtondod-caro homos
|n low Eng|and. Ono ot tho toundors ot layla| |s thoro, a|ong w|th two othor toch mavons, a
t|nanco ontropronour and 3rad |o|d, a top vonturo cap|ta||st, woar|ng joans and a 1-sh|rt.
1arod's paronts, 3usan and 3tophon 3chutz, whom 1arod doscr|bos as °c|ass|c h|pp|os,' a|so
stop by. (1arod usos h|s mothor's ma|don namo °lo||s,' bocauso ho says ho °||kod tho sound ot |t
bottor.') 1h|s attornoon, 3usan, who has purp|o-stroakod ha|r, |s woar|ng a tangor|no-co|orod
scart and dark sung|assos.
1ho |unch, ||ko most lo||s ovonts, has a po||t|ca| purposo-to ra|so monoy tor Co|orado's
0omocrat|c cand|dato tor govornor, 3||| l|ttor. l|ttor, a squaro-jawod, h|gh|y po||shod tormor
d|str|ct attornoy, |s cr|t|ca| to tho 0omocrats' hopos |n Co|orado. lt ho w|ns, tho 0omocrats w|||
contro| a|| throo branchos ot stato govornmont tor tho t|rst t|mo s|nco 1001. 1arod has hostod or
cohostod tund-ra|sors that havo ra|sod moro than $800,000 tor l|ttor. And ho's donatod
thousands ot do||ars to var|ous 0omocrat|c |og|s|ators. 1oday's |unch ra|sos about $10,000.
1ho group ta|ks about tho onv|ronmont, tochno|ogy, tour|sm and bus|noss and gont|y prods tho
govornor to stay c|oar ot ro||g|ous |ssuos wh||o |n govornmont. At tho ond ot tho |unch, lo||s
makos a roquost tor tho group to donato moro t|mo and monoy to tho 0omocrats. °1hoy nood our
ho|p,' ho says. °lt you havon't g|von tho max|mum a||owab|o, p|oaso do. And you can st||| g|vo up
to $2,b00 to tho party, wh|ch can a|so ho|p l|ttor. 3o l wou|d urgo you to tako a |ook at how much
you'vo g|von and soo |t you cou|d do moro.'
lo||s |ooks at tho c|ock, roa||zos ho's |ato tor h|s noxt moot|ng and dashos out tho door.
°l don't know whoro ho gots a|| h|s onorgy,' says h|s mothor. °lt suro d|dn't como trom us.'
lo||s doos crod|t h|s paronts tor h|s ontropronour|a| zoa|, wh|ch has mado h|m ono ot tho
youngost toch tycoons |n Amor|ca. ||s mom and dad aro so|t-doscr|bod °t|owor ch||dron' who
protostod v|otnam and travo|od tho country |n tho |ato 1000s so|||ng homomado postors trom tho
back ot a p|ckup truck. 1hoy tormod a company ca||od 3|uo Vounta|n Arts and startod pub||sh|ng
pootry books. 3ho wroto tho pooms, hor husband d|d tho artwork. Whon a tow ot tho books
bocamo bostso||ors, thoy movod to an upsca|o no|ghborhood noar 3an 0|ogo, whoro 1arod grow
up.
Evon at a young ago, lo||s had a knack tor mak|ng monoy. ln h|gh schoo|, ho startod a scrap-
mota| trad|ng t|rm that bought o|d joops and sho|| cas|ngs trom tho 0opartmont ot 0otonso and
so|d thom to stoo| m|||s. |o a|so so|d tomatoos trom a roads|do stand, ho|pod h|s paronts as a
sa|osman tor 3|uo Vounta|n and spont a summor |n luss|a trad|ng pr|vat|zat|on vouchors on tho
luss|an Commod|t|os Exchango.
|o a|so |ovod po||t|cs. Whon ho was 11, a |oca| dovo|opor announcod p|ans to bu||d homos
around a canyon that 1arod and h|s brothor usod as tho|r da||y p|ayground. 1arod ovorhoard h|s
paronts ta|k|ng about tho p|ans and askod to go to a c|ty counc|| moot|ng to opposo tho p|ans. |o
stood up and gavo a rous|ng spooch oppos|ng tho projoct, and conv|ncod tho town counc|| to
sca|o back tho dovo|opmont.
°1hat was whon ho roa||zod ho cou|d havo an |mpact on pub||c po||cy,' says h|s youngor
brothor, 1or|an.
lo||s toundod a Young 0omocrats C|ub |n h|gh schoo| and at 18 vo|untoorod on 3onator A|an
Cranston's roo|oct|on campa|gn. |o a|ways had a sott spot tor k|ds, ono day |n h|gh schoo| ho
brought homo a dozon Vox|can orphans whom ho'd agrood to houso tor a n|ght as part ot h|s
work w|th tho 3pan|sh languago C|ub.
°Vom was protty surpr|sod whon l showod up w|th thoso orphans,' ho roca||s. °3ut sho |ot thom
stay.'
lo||s t|n|shod h|gh schoo| oar|y and wont to lr|ncoton at ago 10. Evon w|th a doub|o courso
|oad, ho tound t|mo to toam up w|th two tr|onds to start Amor|can lntormat|on 3ystoms (Al3), an
lntornot sorv|co prov|dor |n Ch|cago. |o spont most ot h|s son|or yoar t|y|ng to Ch|cago, ra|s|ng
t|nanc|ng and runn|ng tho bus|noss. 1hoy so|d |t a tow yoars |ator tor $20 m||||on. ln 1000, ho and
h|s paronts tormod an ottshoot ot 3|uo Vounta|n ca||od 3|uoVounta|n.com, wh|ch mado d|g|ta|
groot|ng cards. At tho ho|ght ot tho dot-com bubb|o |n 1000, lo||s and h|s tam||y so|d tho
bus|noss to Exc|toQ|omo tor moro than $700 m||||on, dosp|to tho company's |ack ot prot|ts (|t
was |ator roso|d tor |oss than $40 m||||on). Voant|mo, lo||s |aunchod lrov|do Commorco, whoso
lro||owors sorv|co cut tho pr|co ot sond|ng t|owors by a||ow|ng customors to purchaso d|roct|y
trom growors ovor tho lntornot. lo||s so|d that company |n 200b tor moro than $4b0 m||||on.
|or a|| h|s r|chos, lo||s has a doc|dod|y |ow-koy ||tosty|o. As|do trom h|s |ott, wh|ch ho ca||s h|s
°ono oxtravaganco,' ho has sma|| apartmonts |n 0onvor and Vanhattan. |o avo|ds tho Aspon
scono, raro|y travo|s and says ho usua||y t||os commorc|a|. ||s ott|cos |n 3ou|dor and 0onvor aro
jammod w|th stattors who work tor h|s var|ous toundat|ons, start-up compan|os, porsona|
|nvostmont t|rms and nonprot|t groups-a|| undor tho unott|c|a| umbro||a ot 1arod lo||s lnc. |o
doos most ot h|s work |n tho passongor soat ot h|s loxus hybr|d 3Uv, typ|ng away on h|s |aptop
and co|| phono, wh||o h|s dr|vor, Vark, spoods h|m trom moot|ng to moot|ng.
°l don't know, maybo |t's A00 (attont|on dot|c|t d|sordor), but l ||ko to bo |nvo|vod |n a |ot ot
d|ttoront th|ngs,' ho says.
|o says ho raro|y strossos out, s|nco °gott|ng strossod |s nonproduct|vo and l avo|d th|ngs that
aro nonproduct|vo.' Evon h|s |o|suro t|mo |s rosu|ts dr|von: Whon ho watchos mov|os at homo, ho
taps out o-ma||s on h|s |aptop. °l t|guro that l'm on|y 2b porcont product|vo whon l'm watch|ng a
mov|o, but l can st||| got a |ot dono.' |o says ho doos most ot h|s book road|ng |n tho showor.
°l tako 80-m|nuto showors, wh|ch |s protty |ong. A|| tho pagos got wot, so you can to|| wh|ch
books l'vo road |n my houso bocauso thoy'ro a|| putty trom tho wator.'
lo||s's contra| po||t|ca| |ssuo |s oducat|on. 1ho woa|th boom ot tho |ast docado, ho says, has
|ott out too many Amor|cans and |mprov|ng tho oducat|on systom |s tho bost way to ho|p |ovo| tho
p|ay|ng t|o|d.
°|or mo, |t's a|| about opportun|ty, and how to br|ng |t to a|| Amor|cans so thoy can succood,' ho
says. °1o g|vo thom a chanco to roach tho|r potont|a|.'
lo||s has |aunchod a cha|n ot chartor schoo|s, ca||od tho low Amor|ca 3choo|s, tor |mm|grants
who aro strugg||ng to |oarn Eng||sh and go to schoo| at n|ght attor work. |o sorvod on tho
Co|orado 3oard ot Educat|on unt|| 2007, tunds a toachor award program, pub||shos an oducat|on
nows|ottor and has ho|pod campa|gn tor sovora| bond |ssuos to tund schoo| oxpans|ons.
lo||s's u|t|mato goa| |s to run tor po||t|ca| ott|co, probab|y Congross. 1o got thoro, ho'|| havo to
ovorcomo h|s r|ch-k|d, smartor-than-thou |mago, as wo|| as h|s occas|ona| d|scomtort |n soc|a|
s|tuat|ons. 0ur|ng a v|s|t to h|s chartor schoo| ono morn|ng, ho poppod |nto a c|ass and
|ntroducod h|mso|t to a start|od Vox|can toonagor.
°||, l'm 1arod lo||s. l startod th|s schoo|,' lo||s sa|d, ho|d|ng out h|s hand tor a shako.
°Oh. Okay, coo|,' tho boy sa|d, star|ng b|ank|y at lo||s's hand.
lo||s's porsona| ||to may a|so bocomo a barr|or to h|ghor ott|co, ospoc|a||y among
consorvat|vo Co|orado votors. 1h|s yoar, attor pors|stont rumors about h|s porsona| ||to, lo||s
announcod to a 3ou|dor nowspapor that ho |s gay. lo||s says, °l'vo a|ways to|t my porsona| ||to |s
porsona|. l th|nk soxua| or|ontat|on, ||ko ro||g|on or raco, has noth|ng to do w|th ono's va|uos, and
to most poop|o |t's not |mportant ono way or tho othor.'
lo||s has a|so provon that monoy ta|ks |n po||t|cs. ||s caroor as an o|octod ott|c|a| bogan |n
2000, whon ho doc|dod to run tor tho stato's 3oard ot Educat|on. 1ho 3oard ot Ed's at|argo soat
has a|ways boon ono ot tho moro mundano o|octod ott|cos |n Co|orado-somowhoro botwoon
county comm|ss|onor and stato |og|s|ator. lacos tor tho soat woro |ow-budgot atta|rs, cost|ng a
tow thousand do||ars. lo||s spont moro than $1 m||||on on tho raco. |o bought a yo||ow schoo|
bus, |oadod |t w|th computors and toch goar and travo|od tho stato to campa|gn and toach
ch||dron about tochno|ogy. |o bought ads, put up s|gns and sont out ma|||ngs. |o sh|ppod 08
bouquots ot t|owors to tho stato's 08 0omocrat|c county cha|rmon. lo||s's opponont, tormor stato
sonator 3on A|oxandor, says ho spont about $7,000. Yot lo||s won by a razorth|n marg|n ot |oss
than 100 votos, out ot 1.b m||||on ba||ots cast.
°At ono po|nt,' A|oxandor sa|d, °whon l hoard ho was w||||ng to spond $1 m||||on, l thought ot
wr|t|ng h|m a |ottor say|ng 'lot's sp||t |t |n ha|t, you g|vo mo $b00,000 and l prom|so, l'|| drop out.' l
novor sont |t, but l w|sh l had.'
lt was just tho bog|nn|ng ot tho lo||s monoy mach|no. Ovor tho noxt tow yoars, lo||s gavo
gonorous|y to 0omocrat|c causos and cand|datos. |o croatod $1,000 awards tor toachors,
contr|butod to sott-monoy comm|ttoos and tundod ||bora| Wob s|tos. lt was a|| a pro|udo to h|s
groatost contr|but|on-as a tound|ng mombor ot tho Gang ot |our.

A Band ot Brothora

1ho group bogan w|th a |unch. A| Yatos, tho rot|rod pros|dont ot Co|orado 3tato Un|vors|ty and
ono ot tho stato's most powortu| and d|st|ngu|shod Atr|can Amor|cans, sat down |n tho spr|ng ot
2008 w|th h|s tr|ond Kon 3a|azar, thon tho stato's attornoy gonora|. 1ho two had grown
|ncroas|ng|y trustratod w|th tho stato's |oadorsh|p. Co|orado's oducat|on systom was ta|tor|ng. lts
hoa|th-caro systom was a moss. 1ob growth had s|owod to||ow|ng tho tochno|ogy and to|ocom
bust ot 2001 and 2002. 1ho lopub||cans |n tho |og|s|aturo and govornor's ott|co woro spond|ng
much ot tho|r t|mo wag|ng an |doo|og|ca| crusado aga|nst tho lott, |ntroduc|ng b|||s targot|ng
||bora| co||ogo protossors and push|ng |og|s|at|on bann|ng tho d|scuss|on ot homosoxua||ty |n tho
c|assroom. 1hoy a|so backod a roso|ut|on to support a todora| const|tut|ona| amondmont to ban
gay marr|ago.
3a|azar and Yatos wantod chango. 1hoy know thoy cou|dn't ro|y on tho ox|st|ng po||t|ca|
ostab||shmont, so thoy doc|dod to try to croato a po||t|ca| movomont ot tho|r own.
1hoy startod ho|d|ng |ntorma| moot|ngs w|th |oad|ng 0omocrat|c th|nkors and bus|nosspoop|o.
1ho group d|dn't ta|k about spoc|t|c po||c|os, but ra|||od around broad va|uos assoc|atod w|th
°progross|vo po||t|cs'-soc|a| just|co, ta|rnoss and croat|ng groator opportun|ty tor ovon tho
poorost Co|oradans. lutt 3r|dgos was ono ot tho t|rst mombors.
A|so onboard was lat 3trykor, a |ow-prot||o mom who |s worth an ost|matod $1.4 b||||on trom
hor stako |n hor tam||y's mod|ca|-supp|y company, 3trykor Corp.
ln oar|y 2004, Yatos ca||od 1|m G|||, a ta||, |anky computor gook who mado moro than $400
m||||on dur|ng tho toch boom. G||| had dovotod m||||ons to ant|d|scr|m|nat|on moasuros tor gays
and |osb|ans around tho country, so whon tho 0onvor |og|s|aturo startod bocom|ng a hotbod ot
ant|gay |og|s|at|on, G||| vowod rovongo.
°Vy ph||osophy dur|ng tho 2004 o|oct|on cyc|o was 'pun|sh tho w|ckod,'' ho says, s|tt|ng |n h|s
art-doco mans|on across trom tho 0onvor Country C|ub. °l wantod to stop a|| tho ant|gay b|||s trom
go|ng through.'
G||| wasn't a|ways so host||o to tho GOl. 0oscondod trom a |ong ||no ot Co|orado lopub||cans,
|nc|ud|ng 1od G|||, a tamous Co|orado lopub||can |og|s|ator |n tho 10b0s and 1000s, G|||
bo||ovos pass|onato|y |n troo markots and t|sca| consorvat|sm. |o adm|ts to °torr|b|o ||bortar|an
tondonc|os,' add|ng, °l tond to bo||ovo you shou|d support poop|o |n succood|ng but you shou|dn't
tako away tho|r ab|||ty to ta||. |a||uro |s an |ntogra| part ot |oarn|ng to succood.'
G|||'s r|so to r|chos a|so t|ts tho lopub||can mo|d. |o grow up |n an uppor-m|dd|o-c|ass homo
outs|do 0onvor, w|th a tathor who was a succosstu| p|ast|c surgoon and a mom who was a
homomakor. A math wh|z and computor add|ct, G||| workod on computors |n h|gh schoo| and
taught h|mso|t programm|ng. Yot as a gay man grow|ng up |n 0onvor |n tho 1070s, G||| to|t ||ko a
soc|a| outcast. °ln gym c|ass, l got p|ckod attor tho tat k|d.'
Whon G||| to|d h|s paronts ho was gay, dur|ng h|s troshman yoar at Un|vors|ty ot Co|orado-
3ou|dor, h|s mothor was traumat|zod. °3ho to|d mo, 'lt your tathor's co||oaguos ovor t|nd out, h|s
caroor w||| bo at an ond,'' G||| roca||s. 3howont to thorapy and ondod up road|ng so many so|t-
ho|p books that sho got a mastor's |n psycho|ogy and startod hor own pract|co.
1|m graduatod trom co||ogo and wont to work tor |ow|ott-lackard to work on tho oar||ost
porsona| computors. Attor grow|ng trustratod w|th corporato ||to, ho borrowod $2,000 trom h|s
paronts and |aunchod a pub||sh|ng-sottwaro company |n h|s sparo bodroom. 1ho company,
ca||od Ouark, grow to moro than $800 m||||on a yoar |n rovonuos by tho |ato 1080s.
ln 1002, ho doc|dod to so|| h|s b0 porcont stako |n Ouark to h|s bus|noss partnor and rot|ro.
°l had mado myso|t a |ot ot prom|sos a|ong tho way. ||rst l prom|sod that l wou|d rot|ro whon l
had $b m||||on. 1hon l prom|sod l wou|d rot|ro whon l turnod 8b. l kopt broak|ng my prom|sos. 3o
t|na||y l mado a prom|so to myso|t that l wou|d rot|ro whon l had a ha|t-b||||on do||ars to g|vo away. l
to|t l cou|dn't broak tho prom|so bocauso l thought l cou|d novor got thoro.'
Whon ho doc|dod to so|| out, G|||'s partnor agrood to buy h|s stako tor $800 m||||on, |oav|ng G|||
w|th accumu|atod woa|th ot moro than $400 m||||on. 3|nco monoy usua||y grows w|th |nvostmont
roturns, ho roa||zod ho had roachod h|s goa| and rot|rod to start a toundat|on.
ln tho bog|nn|ng, G||| stoorod c|oar ot po||t|cs. |o was tr|ond|y w|th both lopub||cans and
0omocrats, and ho tocusod pr|mar||y on gay-r|ghts |ssuos, wh|ch at tho t|mo woro soon as |oss
part|san. °Wo v|owod po||t|cs as ov|| and d|rty,' ho says. ln 1002, ho spont $80,000 to try to stop
an amondmont |n Co|orado that wou|d havo provontod c|t|os ||ko 0onvor trom onact|ng |aws to
protoct tho r|ghts ot gay c|t|zons. 1ho amondmont passod, and G||| doc|dod to rodoub|o h|s
ottorts to tund gayr|ghts b|||s.
°You want to |oavo tho wor|d a bottor p|aco and l don't oxpoct tho avorago stra|ght m||||ona|ro to
say 'l want to mako th|s my |ssuo.' 3o |t |t's not my |ssuo, whoso |s |t go|ng to bo?'
||s goa|s ot tund|ng gay r|ghts and roma|n|ng nonpart|san bocamo mutua||y oxc|us|vo attor tho
o|oct|on ot Goorgo W. 3ush |n 2000. 1ho Co|orado lopub||cans, ||ko tho nat|ona| GOl, bocamo
c|oso|y a||gnod w|th tho Chr|st|an l|ght and tam||y-va|uos groups, who opon|y opposod
homosoxua||ty. G||| was smack |n tho m|dd|o ot tho Chr|st|an movomont, s|nco h|s toundat|on was
basod |n Co|orado 3pr|ngs-homo to |ocus on tho |am||y and 1od |aggard, tho tormor hoad ot
tho lat|ona| Assoc|at|on ot Evango||ca|s, who ra||od aga|nst gay marr|ago (|aggard ros|gnod |n
2000 attor adm|tt|ng to h|r|ng a ma|o prost|tuto). G||| roa||zod that bo|ng apo||t|ca| was no |ongor a
cho|co.
°l had a|ways g|von monoy to both 0omocrats and lopub||cans. ln tho ond, th|s country |s b0-
b0, 0omocrat and lopub||can, so you'ro novor go|ng to got your way un|oss you havo b|part|san
support. Our |doa was, |ot's t|nd tho good lopub||cans and good 0omocrats and g|vo thom
monoy. 3ut attor 3ush got |nto powor, tho numbor ot lopub||cans w||||ng to accopt monoy ot that
k|nd dr|od up. 1horo aro st||| good lopub||cans and wo st||| g|vo monoy to thom. 3ut tho soc|a|
consorvat|vos havo such a hammor|ock on tho lopub||can larty that tho who|o stratogy ot
mak|ng tr|onds w|th lopub||cans wou|d no |ongor work. Vy ph||osophy bocamo, |t you can't mako
tr|onds w|th poop|o |n tho lopub||can larty, thon you'vo got to got r|d ot tho worst onos.'
3o whon A| Yatos ca||od |n 2008 to ask h|m to ho|p oust tho lopub||cans, G||| was a|| oars.
Yatos and 3trykor t|ow to G|||'s houso |n Aspon tor |unch and G||| |nstant|y s|gnod on. A short t|mo
|ator, Yatos and 3r|dgos |nv|tod lo||s to d|nnor at tho |ort Co|||ns Country C|ub, and lo||s
bocamo tho group's ch|ot stratog|st.
1hoy mado tor an un||ko|y toam. lo||s, tho amb|t|ous, h|gh-prot||o upstart, was a so|t-doscr|bod
modorato who wantod to koop tr|onds on both s|dos ot tho po||t|ca| a|s|o. G||| was moro
porsona||y rosorvod, but took a no-ho|dsbarrod approach to gott|ng r|d ot tho lopub||cans and
promot|ng gay r|ghts. 3r|dgos, a contr|st, was a|so cons|dor|ng po||t|ca| ott|co and wantod to
ma|nta|n h|s lopub||can ro|at|onsh|ps. 3trykor, a down-to-oarth d|vorcod mothor ot throo, was
tocusod on tam||y |ssuos and °soc|a| just|co.' A|though sho was tho group's b|ggost tundor, sho
was a|so tho most s||ont, dos|gnat|ng Yatos as hor roprosontat|vo tor tho|r moot|ngs.
°Ear|y on, wo know that tho on|y way to croato somoth|ng moan|ngtu| was to sot as|do our
spoc|a| agondas,' Yatos says. °Wo d|dn't ta|k about spoc|t|c po||c|os and wo avo|dod tho
omot|ona| |ssuos.'
ln tho ond, tho group had ono un|ty|ng goa|: oust|ng tho lopub||cans.
3y o|oct|on day, thoy had p|owod moro than $8 m||||on |nto tho o|oct|on ottort. |or stato racos,
tho group spont moro than $2 m||||on, about tw|co tho amount spont by lopub||can groups. 1hoy
a|so bankro||od ads aga|nst lopub||cans runn|ng tor nat|ona| ott|co. Co|oradans tor l|a|n 1a|k,
backod by G|||, lo||s and 3trykor, spont $1 m||||on on tho ads targot|ng Vusgravo, who had
sponsorod todora| |og|s|at|on to amond tho Const|tut|on to ban samo-sox marr|ago. At tho ho|ght
ot tho ad b||tz, Vusgravo b|astod an o-ma|| to church groups p|oad|ng tor support aga|nst a
°rad|ca| homosoxua| agonda.'
°loadors ot tho homosoxua| |obby know |t thoy can tako mo out, no ono w||| stand aga|nst thom
|n tho tuturo,' sho wroto |n a mass o-ma|| to consorvat|vo Chr|st|an groups. Vusgravo won, but
on|y by a s||m marg|n.
lopub||can stato sonator 1|m 0yor-a|so an onomy ot G|||'s-was anothor koy targot. A 1v ad
h|gh||ghtod a roa|ostato doa| |n wh|ch 0yor bought a homo tor $10 trom an 88-yoar-o|d woman
w|th A|zho|mor's d|soaso. (0yor was |ator torcod by a court to pay rost|tut|on.) lam lhodos, a
lopub||can cand|dato |n noarby Adams County, was |oad|ng |n po||s unt|| a t|ood ot ma|||ngs
woro sont out that doscr|bod hor as a r|ghtw|ng oxtrom|st.
As|do trom tund|ng ads, tho group rocru|tod 0omocrats to run tor ott|co. 3o|ng a 0omocrat |n
tho Co|orado |og|s|aturo had bocomo a doad ond caroor path, s|nco tho|r b|||s woro otton
quashod by tho lopub||cans. 1ho Gang ot |our scoutod tor br|ght, asp|r|ng 0omocrats and
ho|pod tund tho|r campa|gns. 1hoy a|so tundod nogat|vo ad campa|gns aga|nst up-and-com|ng
consorvat|vos, to stop thom botoro thoy bocamo powortu|.
°Var||yn Vusgravo startod on tho schoo| board,' G||| says. °3ho wou|d havo boon so much
choapor to nuko whon sho was on tho schoo| board or ovon whon sho was |n tho |og|s|aturo. Wo
nood to bo v|g||ant and t|nd po||t|c|ans who aro bad and stop thom whon |t's choap rathor than
a||ow|ng thom to got |nto an oxpons|vo pos|t|on.'
3t|||, lo||s and G||| say tho monoy spont by tho Gang ot |our was on|y ono tactor |n tho
o|oct|ons. 1ho o|oct|ons, lo||s |ns|sts, woro most|y a rosu|t ot votor d|scontont w|th tho
lopub||cans.
°lt was moro about what tho lopub||cans oloo't do,' lo||s says. °1hoy woron't doa||ng w|th any
ot tho prob|oms tho stato tacod, ||ko tho hugo budgot dot|c|t.'
Yot po||stors and lopub||cans say tho Gang ot |our was |argo|y rospons|b|o tor tho 2004
upsot.
°1hoy a|| camo togothor and thoy had a protound ottoct,' sa|d ||oyd C|ru||, a 0onvor-basod
|ndopondont po||stor. °3ut tor thom, tho 0omocrats wou|dn't havo won.' 3y 2000, tho Co|orado
lopub||cans had rogroupod and tormod a Gang ot tho|r own. O|| magnato 3ruco 3onson and
boor makor loto Coors toamod up to tund tho 1ra||hoad Group, a b27 that supportod |oca|
cand|datos and p|annod to spond at |oast $4 m||||on |n tho o|oct|ons. 3t|||, tho lopub||cans |ag
0omocrats whon |t comos to m||||ona|ro chock wr|tors.
°Wo havo a |ot ot succoss |n gott|ng poop|o to wr|to chocks |n tho $2b,000 to $100,000 rango,'
lh||p says. °3ut whon you start ta|k|ng about sovon-t|guro chocks, wo don't havo that k|nd ot
succoss. 1horo aro p|onty ot lopub||cans who aro low Woa|th, but l th|nk tho 0omocrats who
aro low Woa|th soom to havo boon moro po||t|ca||y mot|vatod so tar.'
lndood, |n tho 2000 raco, tho Co|orado 0omocrats strongthonod tho|r major|ty |n tho
|og|s|aturo. l|ttor won tho govornor's post. G||| suttorod a s||ght sotback whon a stato domost|c-
partnorsh|p |aw was votod down, but ho was oncouragod that 12 ot tho 18 °ant|gay' cand|datos
that ho opposod |n Co|orado woro dotoatod.
As tor tho tuturo, G||| ochoos tho tamous 3ush phraso: °l p|an to stay tho courso.'


10

WORR|ED WEAL1E

1he 1rouble wIth Money

Accord|ng to a 200b study, |oss than ha|t ot today's l|ch|stan|s agrood w|th tho statomont that
°woa|th has mado mo happ|or.' Evon moro surpr|s|ng was tho d|scovory that 10 porcont ot
m||||ona|ros (and 10 porcont ot womon m||||ona|ros) to|t that tho|r woa|th actua||y croatod moro
prob|oms than |t so|vod.
1ho Amor|can woa|th boom has not on|y croatod moro r|ch poop|o, |t has a|so croatod moro
r|ch-poop|o prob|oms. Wh||o monoy has showorod l|ch|stan|s w|th obv|ous bonot|ts, ||ko
troodom, powor and a|| thoso boats and p|anos, |t has a|so burdonod thom w|th troub|os thoy
novor |mag|nod on tho|r c||mb to tho top.
1horo aro tam||y squabb|os, ond|oss cho|cos |n how to spond and |nvost tho|r monoy and a
constant toar ot |os|ng |t a|| |n tho t|nanc|a| markots, a |a loto Vussor. 1horo aro mu|t|p|o homos
to manago, statts to ovorsoo and a t|ood ot now b|||s to pay, trom p|umbors and gardonors to art
rostorors and jowo|ry adv|sors. lt l|ch|stan|s thought monoy wou|d mako tho|r ||vos s|mp|or, thoy
woro m|stakon. lt's mado tho|r ||vos tar moro comp||catod.
At tho samo t|mo, l|ch|stan|s aro trustratod by a|| tho compot|t|on w|th a|| tho othor l|ch|stan|s.
lo mattor how wo|| thoy'ro do|ng, somoono o|so |s a|ways do|ng bottor. As wo saw |n tho t|rst
chaptor, l|ch|stan|s too| thoy nood twlco tho|r curront tortunos to too| socuro, no mattor what tho|r
woa|th. 1hoso worth $1 m||||on say thoy nood $2 m||||on, and thoso worth $10 m||||on say thoy
nood $20 m||||on.
ln h|s book 7bo Vlrtoo oí Prosporlty, 0|nosh 0'3ouza wr|tos that today's r|ch °koop chas|ng
ono opportun|ty attor anothor . . . thoy koop at |t, hop|ng to bocomo top dog, awa|t|ng a tranqu|||ty
that novor arr|vos.'
A|| that str|v|ng and worry|ng has mado l|ch|stan|s an ospoc|a||y anx|ous o||to. Yot rathor than
grapp||ng pr|vato|y w|th tho|r prob|oms, ||ko tho O|d Vonoy crowd, l|ch|stan|s havo como up w|th
a moro novo| so|ut|on-ono that cou|d ox|st on|y |n an ago ot m||||ons ot m||||ona|ros.
1hoy'vo tormod tho|r own woa|th support groups.
On a rocont 1hursday morn|ng, 10 m|dd|o-agod mon gathor at a Vanhattan townhouso,
tormor|y homo to a Gorman s|ng|ng soc|oty. 1hoy'ro drossod casua||y, |n khak|s, button-down
sh|rts, swoators and Vorro||s. 1hoy s|t around a |argo moot|ng tab|o, munch|ng on tru|t and chat-
t|ng about tho|r k|ds, vacat|ons and tho woathor. 1ho atmosphoro |s ro|axod and tam|||ar, ||ko
broaktast budd|os moot|ng up at tho |oca| d|nor. 3ut to got |nto th|s broaktast, you havo to bo
worth at |oast $10 m||||on.
1ho moot|ng |s part ot 1|gor 21, tho nat|on's b|ggost °woa|th poor group.' A woa|th poor group
|s a now k|nd ot c|ub whoro mombors ot s|m||ar not worths got togothor to swap adv|co on
ovoryth|ng trom hodgo tunds and stocks to tam||y and tho porsona| ottocts ot woa|th. lt's whoro tho
so|t-ho|p cu|turo moots tho woa|th boom. And |t's bocomo a thr|v|ng cottago |ndustry.
1h|s morn|ng's 1|gor moot|ng bog|ns w|th tho °G|oba| Updato,' whoro oach 1|gor mombor ta|ks
about what's happon|ng |n h|s t|nanc|a| and porsona| ||to (1|gor |s prodom|nant|y ma|o). 1ho t|rst
to unburdon h|mso|t |s V|chao| 3onnonto|dt, 1|gor's toundor and a tormor low York roa|-ostato
dovo|opor.
3onnonto|dt has a prob|om. |o and a good tr|ond co|nvostod |n a sma|| company and thoy
c|ashod ovor tho bus|noss stratogy. low, tho tr|ondsh|p |s ru|nod and 3onnonto|dt's sovon-t|guro
|nvostmont |s at r|sk.
°l'vo novor |ost a tr|ondsh|p ovor a doa|,' ho says. °l novor roa||zod what a psycho|og|ca| to|| th|s
wou|d tako on mo. l moan, |t's roa||y consumod my ||to. l'd say |t's tak|ng up maybo a th|rd ot my
psycho|og|ca| and bus|noss onorgy. Vy cho|cos aro to stay |nvo|vod |n tho bus|noss, bocauso l
havo so much |nvostod, or l cou|d just got out. 3o now l'm just wondor|ng what l shou|d do. lt's
boon roa||y pa|ntu| tor mo.'
1ho group mombors nod tho|r hoads |n sympathy. A tow say ho shou|d ros|gn trom tho board.
°Yoah, l th|nk that's what l nood to do,' 3onnonto|dt says. °You'ro r|ght, l nood to d|songago, l
nood to |ot |t go.'
Anothor mombor, a tormor mod|a oxocut|vo, says ho's ronovat|ng h|s Vanhattan co-op and,
un||ko most ot tho low York woa|thy, ho's doc|dod not to movo out dur|ng tho construct|on. 1ho
moss, no|so and d|srupt|on havo bocomo a|most unboarab|o, ho says.
°l'vo novor boon through anyth|ng ||ko |t,' ho says. °Wo'vo boon th|nk|ng ot t|nd|ng a p|aco that's
b|ggor and bottor. 1h|s m|ght bo an |mpotus tor us to got a now p|aco.'
1ho oxocut|vo says h|s |nvostmonts aro do|ng t|no, but °l'm a|so |ook|ng tor moro |ntornat|ona|
oqu|ty oxposuro, |t anyono has any |doas.'
Goorgo, a rot|rod ontropronour trom tho V|dwost, says ho's worr|od about h|s |oca| oconomy,
wh|ch has suttorod trom a doc||no |n manutactur|ng. Grantod, h|s own t|nancos aro t|no, s|nco ho
makos about $1 m||||on a yoar trom sorv|ng on corporato boards. Yot bo|ng a commun|ty-m|ndod
porson, Goorgo says ho's norvous about tho job |ossos, wh|ch soom to bo tr|ck||ng up to tho
ownors ot a|| tho m||||on-do||ar homos go|ng up tor sa|o noarby.
°lt's worry|ng to mo to soo a|| tho uncorta|nty,' ho says.
A|, an onorgot|c manutactur|ng and roa|-ostato magnato, sa|d ho's strugg||ng to c|oso h|s
tactory w|thout |nt||ct|ng too much pa|n on h|s workors. °l'vo got a |ot ot vo|umo and a |ot ot
omp|oyoos, and |t's go|ng to tako a |ot ot t|mo to got |t sortod out,' ho says. °1hat's roa||y boon
tak|ng up a |ot ot my t|mo and onorgy. lt's vory d|tt|cu|t.'
On tho br|ght s|do, ho says h|s roa|-ostato |nvostmonts and |ntornat|ona| tunds aro do|ng groat.
|o adds that ho and h|s tam||y aro onjoy|ng tho|r now|y ronovatod 0,000-squaro-toot vacat|on
homo on long ls|and.
Arthur, a top oxocut|vo at a t|nanc|a| sorv|cos t|rm, says ho's torn ovor what to do w|th h|s |argo
ho|d|ngs ot company stock. 1ho sharo pr|co had rocont|y droppod, ho sa|d, and as |ong as ho
stays w|th tho company, ho can't hodgo tho pos|t|on.
°3o bas|ca||y you'ro work|ng to roduco your assots,' 3onnonto|dt says.
Arthur trowns. °Wo||, l a|roady so|d throo-quartors ot my stock yoars ago.'
°||no,' 3onnonto|dt says. °l'm just say|ng you cou|d bo |n a suckor's bot.'
Anothor mombor namod A|, a tannod, port|y, tormor Wa|| 3troot oxocut|vo, |s |n part|cu|ar|y
good sp|r|ts attor co|obrat|ng h|s 77th b|rthday. |o says ho just had a phys|ca| and h|s cho|ostoro|
was down to 107 trom 287, thanks to a comb|nat|on ot l|p|tor and Zot|a. 1ho group app|auds and
ovoryono scr|bb|os down tho namos ot tho two drugs.
On tho t|nanc|a| s|do, Wa|| 3troot A| says ho rogrots so|||ng moro than ha|t ot tho sharos ot h|s
t|rm's stock yoars ago attor h|s rot|romont to d|vors|ty. 1ho stock soarod |n 200b and today h|s
ho|d|ngs-|t ho hadn't so|d-wou|d havo boon worth moro than $100 m||||on.
°You woro too c|oso to tho bus|noss,' ono ot tho mombors says.
°A |ot ot us mako that m|stako,' says anothor. °0on't boat yourso|t up. lt happons.'
Add|ng to h|s romorso, Wa|| 3troot A| says h|s ||tosty|o |s gott|ng moro oxpons|vo. 1o koop up
h|s cash °burn rato,' ho says ho has to start gott|ng h|ghor roturns on h|s |nvostmonts. |o passos
around brochuros tor two mu|t|m||||on-do||ar homos that ho bought tor spocu|at|on |n Capo Cod
and |s now try|ng to so||.
°1hoy'ro groat proport|os,' ho says. °You can ho|p mo out.'
|o says ho tr|od |nvost|ng |n sovora| top-portorm|ng pr|vato-oqu|ty tunds-|nvostmont poo|s
that |nvost |n pr|vato compan|os-but thoy woro a|| c|osod, s|nco thoy a|roady had too much cash
trom |nvostors. 1horo aro so many r|ch poop|o try|ng to |nvost |n pr|vato-oqu|ty tunds, and ab|o to
moot tho $b m||||on or $10 m||||on m|n|mum |nvostmonts, that tho tunds aro ||tora||y turn|ng away
|nvostors.
°1ho good tunds havo too much cash,' ho sa|d. °lt's vory trustrat|ng, you can't got thoso guys to
tako your monoy. Evoryono's rojoct|ng mo.'
°3amo th|ng happonod to mo,' anothor mombor says.
°1horo's too much monoy |n tho systom,' 3onnonto|dt says.
Yot thoro's not noar|y onough monoy |n tho|r bank accounts, tho mombors comp|a|n. lator |n
tho day, tho ta|k turns to |nt|at|on. 1ho costs ot ||v|ng tho h|gh ||to aro soar|ng, thoy say, but tho|r
|nvostmont roturns aro start|ng to s|ow. ln tho |ato 1000s and oar|y 2000s, roturns woro oas||y 10
porcont or moro. low thoy'ro moro ||ko b porcont to 7 porcont, wh||o |nt|at|on tor tho woa|thy |s
r|s|ng |n tho doub|o d|g|ts. 1o ma|nta|n tho|r ||tosty|os, somo ot tho 1|gor mombors sa|d thoy m|ght
havo to start d|pp|ng |nto tho|r pr|nc|pa|-a v|o|at|on ot accoptod woa|thp|ann|ng ru|os.
°Vy w|to buys thoso Vano|o 3|ahn|ks and thoy koop go|ng up |n pr|co,' says Vanutactur|ng A|.
°l had to to|| hor to s|ow down bocauso |t was just gott|ng absurd.'
°look at rostaurant pr|cos,' says Wa|| 3troot A|. °lt's $2b0 tor two poop|o now.'
°Or courts|do l3A t|ckots,' says Goorgo. °1hoy'ro $8b0 oach. Okay, maybo tho cush|ons on
tho cha|rs aro moro comtortab|o, but st|||. . . .'
°You don't ovon roa||zo |t, but your ||tosty|o oxpands,' adds Vanutactur|ng A|. °Or |t you want a
good Vorcodos, thoy'ro now $100,000. 0o l nood to havo ono? lo, but you want to havo n|co
th|ngs bocauso wo oarnod |t. Wo grow accustomod to a corta|n ||tosty|o and |t's gott|ng moro
oxpons|vo.'
°And |t's compot|t|vo,' says Wa|| 3troot A|. °Whon you go to tho |amptons you want a n|co
houso, but tho guy noxt door has an ovon n|cor houso. And tho pr|co goos up oach yoar, so you
havo to doc|do |t you want that n|cor houso or |t you want to go somop|aco o|so. lt's a|so n|co to t|y
on a pr|vato jot. 3ut |t gots oxpons|vo.'
1ho mod|a oxocut|vo jumps |n. °l'm surpr|sod that any ot us aro roa||y worr|od about th|s. 0o
you roa||y th|nk you'ro go|ng to run out ot monoy?'
°You don't ||vo |n my houso,' jokos Wa|| 3troot A|. °Compound|ng works both ways. lt's that
shr|nkago that you worry about. l can't ||vo on b porcont or 0 porcont roturn on my |nvostmonts
anymoro. lt's not good onough. l nood moro.'
Goorgo adds, °ln croat|ng woa|th, |t's not just grood that mot|vatos you, |t's toar. 1horo roa||y |s
a |ot ot |ntorconnoct|on botwoon toar and grood. And |t poop|o stay worr|od, |t's part ot what
mot|vatos thom. Wo'ro a|ways worr|od.'
°You wondor how much |s roa||y onough,' says anothor mombor. °|ow much do you th|nk you
nood to havo so you wou|dn't worry? 1on yoars ago, l usod to th|nk $b m||||on was onough to stay
abovo tho wator ||no. low |t's moro. What's tho numbor? ls |t $10 m||||on? $b0 m||||on?'
1ho group pondors tho quost|on. 1ho mod|a oxocut|vo chuck|os and says: °1hoso aro protty
h|gh-c|ass prob|oms.'

1ho |nnor NiIIionairo

ln 1008, V|chao| 3onnonto|dt rot|rod trom h|s roa|-ostato bus|noss a woa|thy man. |o had so|d
h|s stako |n h|s company tor tons ot m||||ons ot do||ars and had m||||ons moro trom tho sa|o ot a
prov|ous bus|noss. Yot ho was troub|od.
A towor|ng man, w|th a wh|to board, a broad sm||o and a ponchant tor lohru co||ars, tho b1-
yoar-o|d 3onnonto|dt ||kos to ta|k about °t|nd|ng moan|ng' boyond woa|th. |o's a so|t-protossod
1ow|sh 3uddh|st who goos to mod|tat|on rotroats |n Vontana and makos rogu|ar p||gr|magos to
1apan to °absorb tho aosthot|c.' (|o and larry E|||son uso tho samo 1apanoso |ntor|or dos|gnor.)
Attor so|||ng h|s roa|-ostato company, 3onnonto|dt to|t a suddon ompt|noss |n h|s sou|. 1ho
bus|noss had boon tho contor ot h|s ||to. And now |t was gono.
°Vy bus|noss was not on|y my ma|n sourco ot woa|th, |t was a|so a ma|n sourco ot my |dont|ty,'
ho says. °1ho quost|on was how to ||vo my ||to w|thout my bus|noss. lt was about t|gur|ng out who l
was w|thout |t.'
1horo was a|so tho moro pract|ca| quost|on ot |ncomo. Attor cash|ng out ot h|s roa|-ostato
company, 3onnonto|dt roa||zod h|s oarn|ngs dopondod on h|s t|nanc|a| |nvostmonts. Yot ho know
||tt|o about tho h|gh-ond |nvostmont wor|d. |or tho r|ch, |nvost|ng usod to moan s|mp|o stocks and
bonds. low, |t's a|| about commod|ty tunds, pr|vato-oqu|ty tunds, dor|vat|vos and curroncy swaps
-th|ngs ovon 3onnonto|dt, who workod at Go|dman 3achs botoro gott|ng |nto roa| ostato, d|dn't
tu||y undorstand.
°l had to |oarn how to bo an |nvostor and prosorvo my woa|th,' 3onnonto|dt says. °1hat's a vory
d|ttoront wor|d trom roa| ostato.'
3onnonto|dt startod ta|k|ng to tr|onds who woro |n a s|m||ar s|tuat|on. A|| ot a suddon, thoro was
a vast popu|at|on ot r|ch poop|o who had so|d tho|r bus|nossos and woro soarch|ng tor now
|dont|t|os and |nvostmont oxport|so. Wh||o O|d Vonoy usod to ro|y on tho|r trustod tam||y attornoys
and bankors, l|ch|stan|s no |ongor trust today's g|ant pr|vato banks and brokors, wh|ch aro otton
moro tocusod on push|ng tho|r own t|nanc|a| products than prov|d|ng objoct|vo adv|co. 1ho now
brood ot do-|t-yourso|t r|ch poop|o wantod to tako contro| ot tho|r t|nanc|a| tuturos, just as thoy
woro tak|ng contro| ot tho|r ph||anthropy.
3onnonto|dt had boon a mombor ot a CEO group ca||od 1ho Exocut|vo Comm|ttoo, whoro
mombors swappod managomont |doas. Attor ho rot|rod, ho |nv|tod sovora| othor mombors to
ho|p start a k|nd ot °post-CEO' group.
ln|t|a||y tho |doa was to tocus on |nvostmonts, ||ko tho 3oardstown lad|os lnvostmont C|ub, but
tor mu|t|m||||ona|ros. 3onnonto|dt namod tho c|ub 1|gor 21, wh|ch stood tor 1ho lnvostmont Group
tor Enhancod losu|ts. (|o addod tho °21' so |t wou|dn't bo contusod w|th 1u||an lobort-son's
tormor hodgo tund, ca||od 1|gor.)
1|gor 21 now has 80 mombors, d|v|dod |nto subgroups ot 10 or 12 poop|o who moot ovory
month. Each mombor pays $2b,000 a yoar |n duos (wh|ch can bo tax doduct|b|o). ln|t|a||y
3onnonto|dt sot a woa|th co|||ng tor mombors ot $100 m||||on. 3ut that qu|ck|y d|sappoarod, s|nco
ho got so many mombors who woro tar r|chor.
As tor tho $10 m||||on m|n|mum, 3onnonto|dt sa|d rosoarch showod tho popu|at|on ot
docam||||ona|ros was among tho tastost-grow|ng popu|at|ons |n tho country. |o a|so tound that
|nvostors w|th moro than $10 m||||on bohavod d|ttoront|y than thoso w|th |oss than $10 m||||on.
°1horo's no mag|c numbor, but tho $10 m||||on poop|o aro |nvost|ng to max|m|zo tho|r |ong-torm
woa|th and bo|ow that numbor tho |nvost|ng |s charactor|zod by gonorat|ng curront roturns tor
|ncomo.'
As 1|gor startod to grow, a surpr|s|ng th|ng startod to happon. 0ur|ng tho moot|ngs, mombors
startod ta|k|ng about tho porsona| prob|oms that stommod trom woa|th. l|ko ra|s|ng r|ch ch||dron.
Or |os|ng tr|ondsh|ps. Or provont|ng tam||y t|ghts ovor monoy.
Gott|ng togothor w|th a group ot strangors who woro oqua||y r|ch provod odd|y ||borat|ng. And |n
a wor|d whoro tho woa|thy too| ||ko constant targots, 1|gor was ||ko an |nto||octua| gatod
commun|ty. 1hoy to|t sato.
°l to|| my group th|ngs l wou|dn't ovon to|| my husband or my k|ds,' sa|d ono ot 1|gor's tow
toma|o mombors. °1hoso poop|o know ovoryth|ng about mo, trom how much l spond on shoos to
my too||ngs about my mothor. l to|| thom ovoryth|ng.'
At ono moot|ng, a 1|gor mombor cont|dod that ho was grow|ng d|stant trom h|s toonago
daughtor. |o had dovotod much ot h|s ||to to h|s bus|noss and now that ho was rot|rod, ho wantod
to roconnoct w|th h|s tam||y. Ono ot tho othor mombors suggostod tak|ng hor out to broaktast
ovory 3aturday morn|ng.
1ho tathor took tho adv|co and at tho noxt moot|ng, ho to|d tho group that tho wook|y broaktasts
had changod h|s ||to.
°||s ro|at|onsh|p w|th h|s daughtor was transtormod by thoso broaktasts,' 3onnonto|dt roca||s.
°1ho tathor was cry|ng, tho guy who gavo h|m tho adv|co was cry|ng, ovoryono |n tho room broko
down. lt was a roa||y powortu| momont.'
At anothor moot|ng, a toch tycoon who rot|rod young was soarch|ng tor a now caroor. |o tr|od
mus|c. |o tr|od monoy managomont. |o tr|od produc|ng thoator. loth|ng mado h|m happy. 1|gor
mombors rom|ndod h|m how much ho ||kod toach|ng ch||dron, so ho startod toach|ng troub|od
youths at a juvon||o dotont|on contor. |o |ovod tho job, and |t bocamo h|s now ca|||ng.
°Wo sort ot gu|dod h|m to tho answor that was thoro a|| a|ong,' sa|d ono mombor.
Grow|ng trom word ot mouth, 1|gor has bocomo so popu|ar that |t |s p|ann|ng on opon|ng othor
ott|cos around tho country, and porhaps |n Europo.
lndood, tho |doa ot r|ch poop|o ho|p|ng r|ch poop|o |s ga|n|ng |n popu|ar|ty. CCC A|||anco |n
3oston, anothor poor group, on|y accopts mombors worth $100 m||||on or moro, but |t has moro
than 80 tam|||os as mombors. 1ho group has a|so ||nkod up w|th tam|||os |n Europo.
VotC|rc|o |n low York has a m|n|mum woa|th |ovo| ot $100 m||||on, and |t's just passod tho
100-mombor mark. Othor groups |nc|udo $V8 |n Ca||torn|a, low York's lnst|tuto tor lr|vato
lnvostors and tho |am||y Ott|co Exchango |n Ch|cago. A group ot low York-basod womon who
havo mado tho|r own tortunos, |argo|y |n t|nanco, havo bandod togothor to torm C|rc|o ||nanc|a|,
tho t|rst a||-toma|o woa|th poor group.
la|rd lond|oton, CCC's toundor and an ho|r to tho l|tca|rn tam||y tortuno, says tho popu|ar|ty ot
woa|th poor groups spoaks to tho skopt|ca|, |ndopondont sp|r|t ot today's r|ch.
°Whon you'ro woa|thy, tho wor|d |s a|ways try|ng to so|| you somoth|ng, and tam|||os ||ko m|no
va|uo tho|r pr|vacy,' ho says. °loor groups g|vo you a group ot tam|||os that you can got to know
and trust ovor t|mo. 1hoy'vo wa|kod |n your shoos and thoy may havo ovon boon down tho samo
path. lathor than ro|nvont|ng an |ssuo, ||ko gonorat|ona| transtors or br|ng|ng your |n-|aws |nto tho
tam||y bus|noss, you can ask somoono who's boon through |t, and got objoct|vo adv|co. What wo
hoar ovor and ovor trom our tam|||os |s 'Wo don't want to ro|nvont tho whoo|.''
loor groups a|so ottor mombors accoss to prom|um t|nanc|a| |ntormat|on and doa|s. 1hoy
br|ng |n top oconom|sts, pr|vato-oqu|ty doa| makors, tradors and hodgo-tund managors to ottor
tho|r |ns|ghts |nto markots. 1ho spoc|a||sts aro happy to spond tho t|mo, s|nco poor groups aro
t|||od w|th potont|a| c||onts.
Vombors a|so br|ng oach othor |nto tho|r own doa|s. Ono poor, tor |nstanco, m|ght know about
a hoto| go|ng up |n 3hangha| that's |ook|ng tor co-ownors, or a start-up sottwaro company that
suddon|y noods cap|ta|. Ovor tho past tow yoars, 1|gor mombors havo toamod up to buy o|| r|gs,
|aunch tood compan|os and co|nvost |n |nvostmont tunds. At CCC, somo mombors optod to
|nvost w|th a toch ontropronour who roturnod to h|s nat|vo lnd|a to scout tor bus|noss
opportun|t|os.
°Ono ot tho advantagos to our notwork |s that |t's g|oba|,' says 3tophon Vart|ros, manag|ng
partnor ot CCC. °And that's hugo|y |mportant to today's woa|th, wh|ch has a tru|y |ntornat|ona|
porspoct|vo.'

What tho Rich 1aIk About Whon
1hoy 1aIk About Nonoy

lato |n tho attornoon dur|ng tho 1|gor moot|ng, tho mombors aro gathorod around tho tab|o tor
tho day's ma|n ovont-tho portto||o dotonso. lt tho m|ss|on ot 1|gor 21 |s to baro your sou| (and
t|nancos) to your r|ch poors, tho portto||o dotonso |s tho u|t|mato d|srob|ng. At oach moot|ng, a
1|gor mombor rovoa|s ovory dota|| ot h|s porsona| ba|anco shoot, trom |nvostmonts and |ncomo
to char|t|os and housoho|d spond|ng. ln ana|yz|ng somoono's spond|ng and |ncomo, tho group
w|nds up prob|ng doopor quost|ons ||ko °what |s your goa| |n ||to?' and °what tu|t|||s you?'
3onnonto|dt ca||s |t °carotrontat|on'-part |ntorvont|on, part support group.
Goorgo |s tho day's subjoct. |o hands out a t|vo-pago summary ot h|s ba|anco shoot and
oxponso statomonts, show|ng a portto||o va|uod at around $b0 m||||on. 3oyond h|s |nvostmonts,
wh|ch oarn around $800,000 a yoar, ho oarns about $800,000 a yoar trom sorv|ng on corporato
boards. ||s spond|ng rato var|os trom about $7b0,000 to $1.8 m||||on a yoar, about ha|t ot wh|ch
goos tor taxos and char|t|os, w|th tho rost go|ng tor mortgago paymonts, rostaurants, cars, a
vacat|on homo, tam||y ho||days and othor da||y costs.
|o bog|ns tho dotonso by ta|k|ng about h|s monoy managors.
°1ho poop|o l havo aro good,' ho says. °3ut l st||| too| ||ko l'm spond|ng too much t|mo on
account|ng and rocord koop|ng. l'm st||| tho gonora| contractor w|th my |nvostmonts and l don't
want to bo.'
||s broador goa|, ho says, |s to °croato t|nanc|a| socur|ty and |ndopondonco to a||ow mo to
spond moro t|mo ra|s|ng my k|ds and havo a moro ba|ancod ||to.'
As ho ta|ks, tho mombors bog|n to poro ovor tho numbors.
Vanutactur|ng A| not|cos that Goorgo owns a |ot ot stock |n tho compan|os whoro ho a|so
sorvos as a d|roctor-ossont|a||y doub||ng h|s r|sk |t tho compan|os ta||.
°Aron't you doub|y oxposod horo?' ho says. °1hoy m|ght soom ||ko vory good |nvostmonts |ast
yoar but you novor know.'
Goorgo says ho protors to |nvost |n tho compan|os ho d|rocts, s|nco ho can havo moro contro|
ovor h|s |nvostmonts. |o a|so too|s that |nvost|ng makos h|m a bottor d|roctor, s|nco ho has °sk|n
|n tho gamo.'
°Whon l am (t|nanc|a||y) |nvo|vod |n a s|tuat|on, l got vory aggross|vo,' Goorgo says. °Vaybo
that's not a good th|ng.'
1ho group thon homos |n on what thoy a|| soo as Goorgo's woaknoss. ||s portto||o |s 00
porcont bonds and 40 porcont stocks, tar too consorvat|vo tor somoono ot Goorgo's ro|at|vo|y
young ago (ho's |n h|s oar|y b0s).
°l wou|d quost|on why you'ro just troad|ng wator horo,' anothor mombor says. °You'ro a smart
guy, you'ro p|uggod |nto a |ot ot opportun|t|os, l wou|d bo go|ng tor moro growth.'
°You'ro st||| young, you'ro st||| oarn|ng a n|co |ncomo trom boards ovory yoar, you can attord to
bo moro aggross|vo,' says Wa|| 3troot A|. °At th|s stago |n your ||to you shou|d bo tak|ng moro
r|sk and got a h|ghor roturn. You can got a |ot moro out ot your portto||o.'
Arthur suggosts |ntornat|ona| oqu|t|os, and Wa|| 3troot A| suggosts a monoy managor.
°l th|nk you m|ght ovon havo an |nt|at|on r|sk horo,' Arthur says, add|ng that Goorgo's r|s|ng
||v|ng costs cou|d |oavo h|m scrap|ng tor cash |n a docado or so. °You may not, but l don't th|nk
you want to tako that chanco. You don't want |t to b|to you |n tho boh|nd 20 yoars trom now. Ono
th|ng you cou|d do |s tako tho monoy out ot bonds and put |t |nto somoth|ng w|th h|ghor roturns.'
Goorgo says, °You'ro r|ght, my ||tosty|o |s oxpand|ng. Whon my w|to and l wont through th|s
oxorc|so to t|guro out our costs, sho was |n shock. Our ||tosty|o was grow|ng and wo d|dn't roa||y
roa||zo |t.'
On tho porsona| tront, Goorgo says ho's norvous about tho |mpact ot h|s woa|th on h|s k|ds. |o
sa|d h|s o|dost son had takon contro| ot h|s trust and had oarnod 20 porcont on |nvostmonts.
°1hat was roa||y oncourag|ng,' Goorgo says.
3ut ho says ho's not suro about tho |mpact ot monoy on h|s othor two k|ds. And ho's a|roady
hav|ng troub|o t|gur|ng out how to sp||t up tho|r boach homo |t and whon ho |oavos |t to h|s
ch||dron.
°1hat cou|d bo a d|sastor,' ono mombor says.
°A|| throo w||| bo t|ght|ng ovor |t,' says anothor.
Goorgo says ho hopos ono ot thom w||| bo succosstu| onough to buy out tho othors.
Wa|| 3troot A| has anothor so|ut|on: Goorgo can buy h|s two Capo Cod homos, °thon a|| throo
k|ds w||| bo happy.' Goorgo says, °3oo, at 1|gor, wo so|vo oach othor's prob|oms.'
3EYOl0 worry|ng about monoy, l|ch|stan|s a|so worry about tho|r k|ds. 1ho|r toars can bo bo||od
down to two words: lar|s |||ton.
l|ch|stan|s want to g|vo tho|r ch||dron |uxur|os that thoy novor onjoyod grow|ng up. Yot thoy a|so
want thom to havo a strong work oth|c, wh|ch can on|y como trom strugg|o. 1o ho|p roconc||o
thoso two urgos, and toach tho noxt gonorat|on how to hand|o a|| that monoy, l|ch|stan|s aro
turn|ng to a now k|nd ot summor camp.


11

AR|51OK|D5
¯

We´ll Always Have ParIs

lyan Achtorborg, a 28-yoar-o|d Ca||torn|an, |s s|tt|ng across tho tab|o trom h|s t|ancoo.
°1horo's somoth|ng wo nood to ta|k about,' sho to||s lyan. °l'm so oxc|tod about our wodd|ng
and bo|ng w|th you tho rost ot my ||to. 3ut l nood to ask you somoth|ng.'
°Ot courso,' lyan says. °l'm horo tor you.'
°Vy tam||y wou|d ||ko us to s|gn a mar|ta| agroomont.'
°You moan a pronup?'
°Wo||, |n my tam||y wo ||ko to ca|| |t a mar|ta| agroomont.'
°You don't trust mo? l'm comm|tt|ng my ||to to you. l thought l was a part ot your tam||y.'
°You know l trust you,' sho says.
°3ut not onough to |ot mo |nto your tam||y.'
°1h|s |s not about our ro|at|onsh|p,' sho says. °What shou|d happon |t l d|od and you wantod to
romarry? You can undorstand my tam||y wou|d want to protoct tho|r assots.'
lyan shakos h|s hoad. °l am not hav|ng th|s convorsat|on.'
|ortunato|y tor lyan, ho and h|s t|ancoo aron't actua||y ongagod. ||s °t|ancoo' |s 0r. loo
|ausnor, a psycho|og|st who's bocomo ono ot tho country's top adv|sors to tho ch||dron ot tho
now r|ch. And tho|r mock convorsat|on, whoro woa|thy lyan p|ayod tho part ot tho poor,
pronuppod su|tor, was part ot a two-day courso run by |ausnor ca||od tho °||nanc|a| l|to 3k|||s
lotroat.'
1ho 3k|||s lotroat |s a now k|nd ot summor camp tor young l|ch|stan|s. |or two days |n 1u|y,
and anothor two days |n Octobor, tho sons and daughtors ot today's mu|t|m||||ona|ros and
b||||ona|ros gathor |n a c|assroom at tho Un|vors|ty ot Ca||torn|a-lrv|no to |oarn how to manago tho
vast tortunos thoy'ro about to |nhor|t. 1hoy ta|k about portto||o thoory, pr|co-to-oarn|ngs rat|os and
dobt managomont. 1hoy |oarn how to conv|nco tho|r |ntondod to s|gn pronups and how to ask
tho|r dads tor |oans. 1hoy |oarn bas|c °||to sk|||s,' ||ko how to contro| tho|r spond|ng, how to work
w|th othors and how to |ntorv|ow tor a job. Vost ot a||, thoy |oarn how oot to squandor tho|r
tortunos.
1urn|ng a group ot pr|v||ogod 3outhorn Ca||torn|a youths |nto savvy |nvostors and protoss|ona|s
roprosonts a tr|umph ot hopo ovor h|story. Yot |t's a hopo that l|| Adv|sors, tho company that runs
tho 3k|||s lotroat, t|nds |ncroas|ng|y common among today's l|ch|stan|s who aro about to ontrust
tho|r ch||dron w|th m||||ons.
°1horo's th|s mass|vo woa|th transtor that's about to happon, and that's a|roady occurr|ng, and
yot tho k|ds who aro roco|v|ng |t aro not roady,' says 0oug |rooman, l||'s pros|dont. °1hat's
go|ng to bo a prob|om.'

Ariatokida

1ho Amor|can woa|th boom has croatod a boom|ot ot r|ch k|ds, and a now gonorat|on ot anx|ous
l|ch|stan| paronts. 3asod on avorago tam||y s|zo, thoro aro now moro than tour m||||on ch||dron ot
Amor|can m||||ona|ros. And a|| thoso s||vor spoons aro d|pp|ng |nto a rocord amount ot
d|sposab|o |ncomo and |nhor|tod woa|th.
Up to $1b tr||||on w||| bo passod down to tho ch||dron ot m||||ona|ros botwoon 2002 and 20b2,
accord|ng to a study by tho 3oston Co||ogo 3oc|a| Wo|taro lnst|tuto. Vuch ot that w||| bo passod
down trom baby boomors (and ovon youngor paronts) to tho|r k|ds. Wh||o oconom|sts d|ttor on
tho oxact amounts that w||| bo passod down, tow doubt that tho woa|th boom ot tho past docado
w||| croato a cascado ot cash t|ow|ng to tho noxt gonorat|on.
A survoy by lr|nco 8 Assoc|atos, a woa|th rosoarch t|rm, tound that most m||||ona|ros today
p|an to |oavo at |oast 7b porcont ot tho|r ostatos to tho|r ch||dron. 1ho numbor |s h|ghost tor
tam|||os w|th housoho|ds worth $2b m||||on or moro, d|sprov|ng tho w|do|y ho|d not|on that
woa|th|or tam|||os aro moro ||ko|y to |oavo a groator sharo to char|ty.
1oday's r|ch aro a|so |ndu|g|ng tho|r k|ds. W|th ||tt|o t|mo and p|onty ot d|sposab|o |ncomo,
noar|y 40 porcont ot today's m||||ona|ros g|vo tho|r k|ds unrogu|atod accoss to tho k|ds' own
monoy. A|| that spond|ng has ho|pod croato a now oconomy bu||t around a now sot ot k|dd|o
o||tos.
||gh-ond rosorts aro bu||d|ng t|vo-star k|ds' contors and p|aygrounds. Whon E||on lorry, a
woa|th-oducat|on oxport and mom, wont to tho |our 3oasons |n 3cottsda|o, Ar|zona, tho statt
grootod hor tour-yoar-o|d daughtor w|th a ch||d's bathrobo and a p|attor ho|d|ng a trosh|y bakod
cook|o w|th hor namod |nscr|bod w|th |c|ng. Each day at 4 l.V., tho statt do||vorod coconut
lops|c|os and smooth|os to tho ch||dron's poo|, and tho rosort's rostaurants had ch||d-s|zod s||vor
t|atwaro.
1ho 3roakors |oto| |n la|m 3oach, onco a bast|on ot b|uo-b|ood woa|th and rot|roos, has
bocomo a g|ant r|ch-k|d p|ayground. 1ho poo| |s packod on 3unday morn|ngs w|th 80-somoth|ng
moms ba|anc|ng m|mosas and todd|ors, and tho hoto| has bu||t a g|ant tam||y ontorta|nmont
comp|ox, w|th a k|d-tr|ond|y lta||an rostaurant, cratt and computor rooms, a todd|or p|ay aroa and
babys|ttors.
0own tho stroot, a ch||dron's c|oth|ng shop ca||od Ar|stok|ds |s do|ng a br|sk bus|noss |n $17b
sanda|s and 1u|cy Couturo m|n|sk|rts tor protoons. 1od| Wont|oy, ono ot tho ownors, to|d mo that
ono ot tho storo's tastost-so|||ng |toms |s a pa|r ot crocod||o-sk|n 3porry tops|dors, w|th doorsk|n
||n|ng and go|d oyo|ots. 1ho pr|co: $800 a pa|r.
°1hoy |ook groat on a yacht,' ho says.
lr|vato schoo|s aro now |nundatod w|th app||cants, ovon as tu|t|on tor k|ndorgarton soars to
$27,000 at tho top schoo|s. ln somo c|t|os, thoro aro at |oast throo pr|vatoschoo| app||cants tor
oach ava||ab|o spaco. 1o|ov|s|on |s t|||od w|th |magos ot young woa|th gono w||d, w|th pouty
ho|rossos domand|ng now Vorcodos and $200,000 b|rthday part|os. lar|s |||ton k|ckod ott tho
trond w|th 7bo 5lmp|o Llío, a roa||ty show whoro tho doo-oyod sox symbo| s|ums |t on an
Arkansas tarm. V1v's Rlcb Olr|s chron|c|od tho shopp|ng oxpod|t|ons ot 1ommy |||t|gor's
toonago daughtor, A||y, and hor tr|ond, 1a|mo G|o|chor, wh||o tho channo|'s othor toon-spond|ng
tantasy, Vy 5opor 5woot 10, shows tho sons and daughtors (most|y daughtors) ot tho now|y r|ch
vy|ng tor tho t|t|o ot most prot||gato b|rthday party.
A|| that oxtravaganco has croatod now paront|ng prob|oms-and now |ndustr|os to so|vo thom.
A spato ot rocont rosoarch stud|os |s shodd|ng moro ||ght on how woa|th, |n add|t|on to g|v|ng
k|ds advantagos, can bocomo a tam||y curso. W|thout tho nood to work, ch||dron dovo|op ||tt|o
sonso ot mot|vat|on or dr|vo. 1hoy havo troub|o dovo|op|ng bas|c ||to sk|||s-c|oan|ng up,
manag|ng monoy, work|ng w|th othor poop|o-s|nco thoy'ro usod to ro|y|ng on houso statt and
paronts.
°Whon you havo somoono thoro to do v|rtua||y ovory choro, that roa||y changos tho ||to ot a k|d,'
says E||on lorry, tho Woa|thbr|dgo toundor. °You don't |oarn bas|c sk|||s that aro tundamonta|
bu||d|ng b|ocks tor tho rost ot your ||to. 1ho pr|v||ogo gots |n tho way ot hoa|thy maturat|on. Vonoy
g|vos poop|o tho ab|||ty to buy tho|r way out ot ||to oxpor|oncos. 1ho paronts may th|nk thoy'ro
ho|p|ng tho|r ch||d, but thoy'ro actua||y robb|ng thom.'
Othor s|do ottocts aro moro sor|ous. losoarch by 3un|ya luthar, a protossor ot psycho|ogy
and oducat|on at tho 1oachors Co||ogo ot Co|umb|a Un|vors|ty, t|nds that today's att|uont k|ds aro
just as prono to substanco abuso and °ru|o-broak|ng' bohav|or as |nnor-c|ty k|ds. Wh||o tho most
common do||nquonc|os among |nnor-c|ty k|ds |nvo|vo woapons and t|ghts, att|uont k|ds aro prono
to stoa||ng trom paronts and tr|onds.
luthar a|so tound that ono |n t|vo att|uont k|ds |s c||n|ca||y doprossod-tar moro than tho
nat|ona| norm. A study ot pr|vato schoo|s tound that a|coho| and drug uso among att|uont k|ds |s
ovon blgbor than that ot |nnor-c|ty k|ds. Ono roason tho ratos aro comparab|o: absont paronts.
Woa|thy k|ds today aro otton ra|sod by a rovo|v|ng door ot nann|os and houso statt and soo ||tt|o
ot tho|r paronts.
°1hoy tond to bo moro |so|atod trom tho|r paronts phys|ca||y and omot|ona||y,' luthar says. Yot
sho addod that tho prossuros to succood tor att|uont k|ds a|so p|ay a hugo ro|o.
1oday's m|n|-l|ch|stan|s aro surroundod by so many othor l|ch|tan|s-a tunct|on ot tho|r
popu|at|on growth-that thoy'vo bocomo |nsu|atod trom tho rost ot soc|oty. 1hoy'ro grow|ng up |n
a bubb|o ot opu|onco. And thoy havo ||tt|o undorstand|ng that anothor wor|d (|n tact, most ot tho
wor|d) ox|sts outs|do ot tho|r $17,000 v|ctor|an custom p|ayhousos and $2b,000-a-yoar pr|vato
schoo|s. A pr|vato bankor |n low York to|d mo tho story ot tho 11-yoar-o|d daughtor ot a roa|-
ostato magnato who grow up t|y|ng on tho tam||y's pr|vato jot. |or hor b|rthday, tho g|r| askod hor
tathor tor a r|do on a commorc|a| t||ght.
°3ut wo havo our own jot,' tho magnato to|d hor.
°l know, but l want to r|do on a b|g p|ano w|th othor poop|o,' sho sa|d. °l want to soo what an
a|rport |ooks ||ko on tho |ns|do.'
lor| 3to||, who ||vos |n a Vod|torranoan mans|on |n la|m 3oach, gots constant roquosts trom
hor throo k|ds to buy o|octron|c gadgots and toys that othor k|ds havo at tho la|m 3oach 0ay
3choo|.
°1hoy como homo and say, '3o and so got an Xbox 800 and a go-cart and a p|nba|| mach|no
yostorday.' l say, '1hat's n|co. 3ut you can't havo |t just bocauso you'ro dosorv|ng ot |t. You havo to
wa|t tor your b|rthday or ho||day t|mo tor that to happon.''
l|ch|stan|s stand |n stark contrast to O|d Vonoy whon |t comos to paront|ng. 3otoro tho 1080s,
|nhor|tod woa|th was |argo|y cont|nod to b|uo-b|ood tam|||os that had t|mo-honorod trad|t|ons ot
ra|s|ng r|ch k|ds. 1hoy raro|y ta|kod about monoy. 1hoy taught tho|r ch||dron tho |mportanco ot
koop|ng a |ow prot||o, novor ombarrass|ng tho tam||y and choos|ng caroors that woro rospoctab|o
w|thout bo|ng morconary. 1hoy |nst|||od tho not|on tho r|ch woro d|ttoront, w|th groator troodoms
and groator rospons|b|||t|os to soc|oty. And thoy ro||od on t|mo-honorod |nst|tut|ons-board|ng
schoo|s, summor camps, churchos, c|ubs, tho lvy loaguo-to mo|d tho|r ottspr|ng |nto a wo||-
mannorod o||to. (lot that |t a|ways workod.)
lo|son A|dr|ch 1r., a lockoto||or cous|n and author ot O|o Voooy, says board|ng schoo|
p|ayod a part|cu|ar|y |mportant ro|o among tho pro-l|ch|stan| crowd.
°Whon l grow up, tho oth|ca| trad|t|on was th|s wo|rd comb|nat|on ot Chr|st|an|ty and man||noss.
1horo was a hoavy omphas|s on sports, ospoc|a||y tho most pa|ntu| sports, ||ko |co hockoy and
tootba||. lt was a|| about sto|c|sm and pat|onco undor groat stross. 3oard|ng schoo| was not what
|t |s today, th|s k|nd ot country c|ub atmosphoro. lt was a|most tota||tar|an. What thoy woro say|ng
was that |n ordor tor you to |oad tho good ||to you havo to torgot about a|| th|s monoy and th|s
|uxury and th|s troodom that you aro ho|r to.'
||s tam||y strossod tho |mportanco ot advors|ty-ovon |t thoso advors|t|os had to bo
manutacturod. A|dr|ch, tor |nstanco, had a str|ng ot b|uo-co||ar summor jobs, |nc|ud|ng work|ng at
a boatyard, d|gg|ng tronchos |n tho 1otons tor a rura| o|octr|t|cat|on projoct, and work|ng |n tho a boatyard, d|gg|ng tronchos |n tho 1otons tor a rura| o|octr|t|cat|on projoct, and work|ng |n tho
morguo ot a |oca| hosp|ta|.
°Attor tho morguo job, my status among my tr|onds wont z|pp|ng stra|ght up,' ho says.
O|d Vonoy wantod tho|r k|ds to bo product|vo, but not too product|vo. 1hoy wantod thom to bo
troo ot wor|d|y concorns to tocus on h|ghor asp|rat|ons, ||ko art, cu|turo or ph||anthropy. ln h|s
documontary Boro Rlcb, 1am|o 1ohnson, an ho|r to tho 1ohnson 8 1ohnson tortuno, asks h|s
tathor what ho shou|d do w|th h|s ||to now that ho was turn|ng 21. ||s tathor, a|so a trust-tund k|d
who novor had to work, to||s 1am|o to jo|n a char|tab|o organ|zat|on and g|vo somo ot h|s monoy
away. Whon 1am|o rojocts tho |doas, h|s tathor |ooks puzz|od and suggosts t|nd|ng a hobby, °||ko
co||oct|ng o|d maps.'
O|d Vonoy a|so handod ovor tho tam||y tortuno to tho|r k|ds w|th ||tt|o or no |nstruct|on.
°1ho trad|t|on whon l was grow|ng up was that you wont to a moot|ng at tho |aw t|rm ot Choato
|a|| 8 3towart |n 3oston and tho tam||y |awyor wou|d oxp|a|n tho torms ot tho trust that you woro
go|ng to ||vo on tor tho rost ot your ||to and that was |t,' A|dr|ch says. °1horo was no oducat|on.
You took tho backsoat to your adv|sors and trust oxports. lt was just madnoss. Wo had zoro
tra|n|ng.'
l|ch|stan|s don't want to ropoat tho m|stakos ot O|d Vonoy, wh|ch, thoy say, brod |gnoranco
and |ndo|onco. 3oard|ng schoo|s aro out, day schoo|s aro |n. Vost l|ch|stan|s roso up trom tho
m|dd|o c|ass and p|aco groat |mportanco on pass|ng on tho work oth|c to tho|r k|ds-ovon as
thoy |ndu|go thom w|th |uxur|os. ln ono study, 80 porcont ot woa|thy paronts say |t's |mportant tor
tho|r k|ds to °|oarn tho va|uo ot monoy through hard work.' Yot on|y ono-th|rd oncourago tho|r k|ds
to tako attor-schoo| jobs.
l|ch|stan|s want tho|r k|ds to bo str|vors. 1hoy want thom to mako monoy. Or at tho vory |oast,
not to |oso |t.
1ho rosu|t |s a boom|ng now |ndustry |n woa|th oducat|on tor r|ch k|ds. lathor than |oav|ng tho|r
t|nanc|a| tatos |n tho hands ot |awyors and bankors, l|ch|stan|s aro sond|ng tho|r k|ds to spoc|a|
programs to bocomo smartor stowards ot tho tam||y cash.
At tho Wash|ngton, 0.C.-basod Woa|thbr|dgo lartnors, wh|ch cators to tam|||os worth $100
m||||on or moro, k|ds as young as sovon spond a n|ght at a zoo to study how |t works as a
bus|noss. O|dor k|ds ho|p |aunch bus|nossos, ||ko groot|ng-card compan|os and |omonado
stands. At tho Woa|thbr|dgo |omonado stands, k|ds croato °product|on toams' to run a cost-
bonot|t ana|ys|s ot us|ng roa| |omons vorsus roady-mado powdor. 1hoy appo|nt °cap|ta| budgot
groups' to koop an oyo on costs. And thoy torm °|ocat|on assossmont un|ts' to scout grocory
storos, stroot cornors and ma||s and |ook tor tho bost p|aco to sot up shop. 1o domonstrato tho|r
budd|ng nob|osso ob||go, tho k|ds donato a|| tho|r prot|ts to char|ty.
l||, tho othor b|g oducator, has so much domand tor |ts programs that |t's opon|ng ott|cos |n
0a||as, low York and southorn ||or|da to add to |ts Ca||torn|a hoadquartors. lt's b|ggost prob|om
|s t|nd|ng qua||t|od toachors tor a|| tho woa|thy k|ds who nood tra|n|ng. l|| chargos botwoon
$b,000 and $1b,000 tor |ts var|ous programs, wh|ch |nc|udo ono-day workshops tor a s|ng|o
tam||y to wookond coursos tor 1b or 20 k|ds at a t|mo.
lncroas|ng|y, paronts aro a|so sond|ng tho|r k|ds to l|| and othors tor charactor tra|n|ng. As
part ot |ts t|nanc|a| courso, l|| a|so tr|os to toach |oadorsh|p sk|||s, cont|donco bu||d|ng,
nogot|at|ng sk|||s and bas|c commun|cat|on.
3ays |rooman: °Wo'ro not try|ng to chango tho paront|ng. Wo'ro try|ng to toach tho coro va|uos
||ko rospons|b|||ty, accountab|||ty, |ntogr|ty that most tam|||os want to toach. 3ut not a|| ot thom do
|t wo||. 1hoy havon't ||vod that ||tosty|o and maybo tho modo||ng |sn't that good.'
lndood, a two-day l|| workshop shows that today's woa|th-oducat|on camps can go on|y so tar
to turn today's r|ch k|ds |nto stroot-smart |nvostors.

1ho 5uma ot Our Fathora

At 7:80 A.V. at tho Un|vors|ty ot Ca||torn|a-lrv|no campus, a stroam ot land lovors, 3VWs and
Vorcodos pu||s |nto a park|ng |ot. A co||oct|on ot t|rod-|ook|ng 20-somoth|ngs shutt|o out ot tho|r
cars, t||o |nto a c|assroom and |ntroduco thomso|vos ovor 0|ot Cokos and donuts.
Among tho t|rst to arr|vo |s Ky|o C|rc|o, a sp|ky-ha|rod ontropronour |n joans and a 1-sh|rt, who
mont|ons that h|s tathor |s Ca||torn|a's strawborry k|ng. 1|na and l|sa, p|at|num-b|ond s|stors, say
tho|r grandtathor mado a tortuno |n roa| ostato. A ta||, oarnost young man namod 1|m, woar|ng a
groon po|o sh|rt and khak|s, says h|s dad owns a tarm |n V|nnosota (°|t's a protty b|g tarm,' ho
adm|ts). A brothor and s|stor whoso dad mado a tortuno trom stat|onory, tako tho|r soats |n tho
back ot tho room and |ook |mpat|ont|y at tho|r watchos. 1h|s bo|ng Ca||torn|a, tho room t|||s w|th
sovora| roa|ostato sc|ons, |nc|ud|ng lyan. 3ovora| othor attondoos bo|ong to a tam||y that mado
|ts monoy trom an o|octr|ca| contract|ng bus|noss that was so|d. lound|ng out tho group aro
Ko|soy and Kara, w|||owy brunottos whoso tam||y runs a garbago-hau||ng omp|ro. A|| togothor tho
k|ds |n tho room roprosont tam||y woa|th ot moro than $8 b||||on.
1o start out, tho k|ds aro askod why thoy doc|dod to como to tho c|ass.
°Vy dad k|nd ot suggostod that l como,' sa|d a dovo|opor's daughtor. °Actua||y, ho moro than
suggostod. |o sa|d |t was k|nd ot a roqu|romont tor my |nhor|tanco.'
1|na says: °Vy grandmothor sa|d |t l d|d th|s, sho'd g|vo mo monoy to go to vogas.'
|ausnor gots th|ngs ro|||ng w|th a |osson on tam|||os and monoy. Attor spond|ng 10 yoars as
tho son|or psycho|og|st |n tho 3ovor|y ||||s schoo| systom, |ausnor |s an oxport on ta|k|ng to r|ch
k|ds, ospoc|a||y about tam||y prob|oms. W|th hor broad sm||o, trostod ha|r and pasto|co|orod
bus|noss su|ts, sho's tho modo| ot a choory, support|vo Wost Coast thorap|st.
1ho c|ass |s d|v|dod |nto groups and to|d to answor a sor|os ot quost|ons.
°|ow |mportant |s monoy to you today?'
Ono group answors: °loa||y |mportant.'
°lt's |mportant but |t's not who wo aro,' says anothor group.
°vory |mportant tor, ||ko, surv|va|,' says anothor.
°1o ||vo,' says anothor group. °You nood |t to ||vo.'
|ausnor asks a to||ow-up: °|ow was monoy usod |n your tam||y?'
°Educat|ons, vacat|ons, and a way to got contro|.'
°lowards.'
°lnvostmonts and char|ty.'
°1o buy |ovo,' says ono group. °l|ko 0|snoy|and dads, whoro thoy contuso monoy and |ovo.'
°vory good,' |ausnor says. °0|d you hoar that? 0|snoy|and dad. 1hat's a vory |mportant
concopt. l want you to got |n touch w|th that.'
3ho movos on to tho noxt quost|on. °What do you romombor your tathor say|ng about monoy?'
°loth|ng |s troo,' says ono studont.
°0on't bo comp|acont,' says anothor.
°Vonoy doosn't grow on troos,' says ono.
°1rash |s cash,' say tho wasto-managomont ho|rossos.
|ausnor asks about tho dangors ot monoy.
°0rugs,' says ono group.
°You bocomo |azy. You don't want to work bocauso you don't havo to.'
°Othor poop|o's porcopt|ons. lt thoy know you como trom monoy, thoy th|nk you'ro spo||od. 1ho
who|o s||vor spoon th|ng.'
°Or |t you'ro dat|ng, you'ro a|ways worr|od about somoono tak|ng advantago ot you. And on
datos you havo to, ||ko, pay tor th|ngs a|| tho t|mo. You'ro worr|od that thoy ||ko you tor your
monoy.'
°loop|o como out ot tho woodwork to bo your tr|ond,' Ky|o says.
|ausnor c|osos tho soss|on w|th ono t|na| quost|on: What wou|d tho studonts do |t thoy won tho
|ottory?
°|ow much |s tho pr|zo?' says Ky|o.
°lot's say $10 m||||on,' |ausnor says.
°ls that attor-tax or protax,' says lyan. °3ocauso that's not that much protax.'
°E|thor way, |t's not that much,' Ky|o says.
°lrobab|y just |nvost |t,' tho group says.
1|na muttors: °l'd go to vogas.'
|ausnor |oads to anothor |osson on pronups. Whon |t comos to ta|k|ng to a spouso-to-bo about
a pronup, |ausnor has somo bas|c ru|os. ||rst, sho says, don't wa|t unt|| tho month botoro tho
wodd|ng to br|ng |t up w|th your |ntondod.
°1a|k to thom about |t as soon as you know tho ro|at|onsh|p |s sor|ous,' sho says. °1ho c|osor
you got to tho wodd|ng, tho worso |t's go|ng to got. You shou|d tako thom as|do, maybo ovor
d|nnor or at homo, and say '1horo's somoth|ng |mportant l nood to sharo w|th you. ln my tam||y wo
do pronups.''
|or socond ru|o: 3|amo |t on tho tam||y. lt tho tuturo spouso pushos back, you can a|ways say
|t's a tam||y trad|t|on or 0ad's roqu|romont. And mako suro to ca|| |t a °mar|ta| agroomont,'
|nstoad ot °pronup.'
°1h|s |s ||ko a bus|noss contract,' |ausnor says. °1o|| tho porson that tho monoy that you br|ng
to tho marr|ago |s ||ko a g|tt, that you d|dn't mako |t, but that tho two ot you can onjoy |t dur|ng your
marr|ago. You can say that your paronts bo||ovo |t's |mportant to oxocuto a pronup so moro ot tho
monoy w||| stay |n tho b|ood||no.'
Whon a|| o|so ta||s |n so|||ng a pronup, |ausnor says, |t's bottor to ta|k about doath than d|vorco.
°You a|so say 'Wo||, what |t l got run ovor by a bus and you romarr|od? lt wou|dn't bo ta|r tor my
tam||y's monoy to pass to your now spouso.' Or you can turn |t around to ta|k about tho tuturo tor
your own k|ds. You can say, 'Wo||, |t wo had ch||dron, you wou|d want tho samo th|ng tor thom,
wou|dn't you? lt wo had a daughtor and sho got marr|od you wou|d want tho samo protoct|on tor
hor, wou|dn't you? You wou|d want to koop tho monoy |n tho tam||y.''
1ho c|ass nods attont|vo|y. 1wo studonts who woro just marr|od to oach othor ottor to sharo
tho|r story. 1ho husband, Ko|th, d|dn't como trom monoy and works as a schoo|toachor. |o datod
3arah, tho daughtor ot a Ca||torn|a roa|ostato dovo|opor, tor months botoro |oarn|ng that hor
tam||y had monoy.
°Wo woro s|tt|ng |n tho car, dr|v|ng to hor dad's houso,' Ko|th says. °And sho says °Oh, by tho
way, my tam||y |s protty wo||-ott.' And l sa|d 'Okay.' l was p|ctur|ng maybo a docont, two-story
houso. Wo got to Va||bu and wo pu|| up to thoso gatos and thoro's th|s hugo, t|vo-story houso w|th
a|| thoso w|ngs. Wo tako a tour ot tho houso, and l sa|d 'Okay, wo||, th|s |s moro than just wo||-ott.'
1horo aro st||| parts ot tho houso l'vo novor soon and l'vo dono sovora| tours.'
3otoro tho|r wodd|ng, h|s t|ancoo askod Ko|th to s|gn a mar|ta| agroomont.
°Whon l t|rst hoard about |t, |t soundod protty strango. 3ut l sat down w|th th|s attornoy and ho
bas|ca||y oxp|a|nod tho |doa ot commun|ty proporty. Evoryth|ng sho br|ngs to tho marr|ago |s
hors, ovoryth|ng l br|ng |n |s m|no, and anyth|ng wo mako togothor |s commun|ty proporty. lt
soundod protty ta|r to mo.'
As tho day goos on, tho k|ds |n tho l|| c|ass start to ta|k opon|y about tho|r ||vos and monoy.
3omo havo turnod |nto dr|ttors and spondors, othors aro hard-dr|von protoss|ona|s and
ontropronours. |ow want to to||ow tho|r paronts' tootstops-o|thor |n bus|noss or ||to.
1|m, tho tarmor's son, works |n l1 at a b|g company |n V|nnosota. 1wo ot tho studonts aro
art|sts, two aro toachors and ono woman |s a chot. 1|na and l|sa, who havo a|roady b|own tho
t|rst |nsta||mont ot tho|r |nhor|tonco, aro start|ng tho|r own boauty sa|ons.
Ko|soy and Kara, who ||vo |n Va||bu, aro st||| soarch|ng tor caroors. Ko|soy wr|tos songs part-
t|mo and |s |ook|ng to broak |nto tho mus|c bus|noss. Kara, who's st||| |n co||ogo, |s a top
compot|tor |n tho show-horso c|rcu|t. l|ko many l|ch|stan| ottspr|ng, tho s|stors havo an
amb|va|ont v|ow ot woa|th.
Grow|ng up |n 3outhorn Ca||torn|a, thoy had a|| tho comtorts ot a woa|thy tam||y. Kara drovo a
Vorcodos to h|gh schoo|. 1hoy had n|co c|othos. Whon sho was o|ght, sho got hor t|rst horso and
now sho has about 4b.
1ho s|stors don't °act' ||ko r|ch g|r|s and havo tho |a|d-back, down-to-oarth a|r ot rogu|ar co||ogo
k|ds. Yot hav|ng tr|onds ot |ossor woa|th has provon comp||catod. Ono rocont w|ntor, thoy |nv|tod
a tr|ond to jo|n thom |n |awa||, whoro tho s|stors had vacat|onod tor yoars. 1hoy a|ways got a
su|to at tho Grand Wa||oa, but to accommodato tho|r tr|ond, thoy got a sma||or room on tho
ground t|oor.
°lt was th|s t|ny room, |n th|s wo|rd part ot tho hoto| wo'd novor ovon soon botoro,' Kara says.
°Wo stayod thoro tor a n|ght, but tho room was so bad wo just cou|dn't doa|, so wo had to
upgrado. Wo pa|d tor ovoryth|ng |n tho ond bocauso wo d|dn't want our tr|ond to havo to pay. l'm
not suro wo'd do that aga|n. lt was awkward.'
Watch|ng tho|r paronts work 14-hour days-tho|r mom |s tho gonora| managor ot tho company
-tho s|stors ga|nod a strong approc|at|on tor hard work. Yot thoy a|so know thoy don't want tho|r
paronts' workaho||c ||vos-and thoy don't want to run tho tam||y bus|noss, at |oast not yot.
°l wou|d ||ko to do somoth|ng on my own and mako my own |mpact t|rst,' Kara says.
On tho othor hand, thoy'ro a|so grow|ng t|rod ot tho hodon|st|c cu|turo ot Va||bu, wh|ch thoy say
|s t|||od w|th young ho|rs and ho|rossos spond|ng monoy and pass|ng tho t|mo.
°lt's so mator|a||st|c,' Kara says. °lt's a|| thoso poop|o strung out on drugs and dr|tt|ng trom ono
th|ng to tho noxt. lt's not norma|. l want to ||vo |n a norma| p|aco and havo a norma| ||to.'
Ky|o C|rc|o marks tho othor oxtromo-tho r|ch k|d whoso s|ng|o obsoss|on |s to outdo h|s
tathor.
At 21, ho's |aunchod two compan|os and hatchod p|ans tor sovora| moro. |o works 10-hour
days, dr|vos tho samo usod |ord p|ckup ho bought |n h|gh schoo| and savos ha|t ot h|s moagor
|ncomo |n hopos ot buy|ng a houso w|th h|s w|to.
C|rc|o's tathor |s worth an ost|matod $800 m||||on to $b00 m||||on, attor bu||d|ng a strawborry-
grow|ng omp|ro and so|||ng out to a compot|tor. Ky|o's grandtathor a|so atta|nod a |ovo| ot tamo |n
Ca||torn|a produco c|rc|os: |o croatod tho baby carrot. Yot Ky|o hasn't askod h|s tam||y tor monoy
s|nco ho |ott homo at ago 10.
°1ho th|ng that koops mo go|ng |s want|ng to havo tho samo succoss as my dad,' ho says. °l
don't want h|m hand|ng |t to mo. l want to do |t comp|oto|y on my own. lt's somoth|ng l havo to
provo.'
|or now, ho's just mak|ng onds moot. ||s mus|c managomont company has yot to broak |nto
tho b|g t|mo. ||s othor company, wh|ch so||s w|ro|oss crod|t-card roadors, gonoratos |ncomo, but
not much.
3t|||, Ky|o knows trom watch|ng h|s dad that ta||uro |s a procond|t|on to succoss. And ho's not
count|ng on any |nhor|tanco, ovon though ho'|| probab|y got ono.
°l'm ||v|ng my ||to assum|ng l won't roco|vo a s|ng|o ponny. l don't know what typo ot monoy, |t
any, l'|| got. Whatovor l got, l havo to oarn.'
Grow|ng up, Ky|o's tam||y ||vod tho ||to ot str|v|ng m|dd|o c|assors. |o d|d choros, but got no
a||owanco. At ago 11, ho startod buy|ng strawborr|os trom h|s dad (no d|scount) and so|d thom
door-to-door |n h|s no|ghborhood. lator ho startod buy|ng mo|ons and corn and so|d thom trom a
stroot cornor ovory 3aturday. Ky|o's r|ch tr|onds got whatovor thoy wantod just tor tho ask|ng. Yot
whon ho askod h|s paronts tor a b|ko or baskotba|| hoop, thoy wou|d to|| h|m to savo and buy |t
h|mso|t.
°1hat k|nd ot p|ssod mo ott,' ho says. °l romombor bo|ng protty upsot at tho t|mo.'
ln h|gh schoo| ho t|na||y conv|ncod h|s dad to g|vo h|m a summor job at tho company. 3ut |t
wasn't tho cushy ott|co work ho hopod tor.
°|o droppod mo ott |n tho t|o|d at 4 A.V. and to|d mo to wa|t tor tho toroman to p|ck mo up. l
workod t|vo days a wook tor m|n|mum wago, p|ck|ng and dr|v|ng tho tractor. l was tho on|y wh|to
porson thoro and l d|dn't spoak 3pan|sh. lobody know l was tho ownor's k|d and l mado suro
thoy d|dn't t|nd out, bocauso thon thoy wou|d hato mo. l ato ott tho |unch truck w|th ovoryono o|so.
Van, |t was torr|b|o.'
Attor that, Ky|o sworo ho'd novor work |n produco.
Ky|o suttorod anothor dotoat attor h|gh schoo|, whon ho got rojoctod trom tho co||ogo ot h|s
cho|co, Chapman Un|vors|ty. ||s grados woro good, but h|s 3A1 scoros to|| short. lnstoad, ho
to||owod |n tho tootstops ot h|s tathor, who sk|ppod co||ogo to go |nto bus|noss.
As hard as ho works, and as ||tt|o as ho makos, Ky|o too|s ovon moro sorry tor h|s r|ch tr|onds
trom h|gh schoo|.
°l too| bad tor thom,' ho says. °1hoy'ro st||| ||v|ng at homo. Ono guy l know doos orrands tor h|s
tathor-||ko dry c|oan|ng and stutt-and gots $b0,000 a yoar and ho th|nks |t's a job. 1hoy just
assumo tho monoy w||| a|ways bo thoro. 1hoy'ro spond|ng |t and thoy don't know what thoy'ro
go|ng to do whon |t's a|| gono. 1hoy don't havo any sk|||s, but thoy havo roa||y h|gh standards ||ko
tor sports cars and hoto|s. l guoss l too| protty |ucky that my paronts mado |t tough tor mo.'

1rading PIacoa

Attor |unch, tho c|ass d|v|dos |nto groups and roco|vos a sot ot |aptop computors tor a stock-
trad|ng contost. Each group |s g|von $100 |n t|ct|t|ous cash to spond and a ||st ot stocks to
chooso trom. 1ho |aptops run a trad|ng program that s|mu|atos stock-markot act|v|ty ovor a t|vo-
yoar por|od. Whon tho c|ock starts, tho studonts scroam w|th oxc|tomont.
°3uy 1oys °l' Us, l ||ko that p|aco,' ono ot thom says.
°What do wo want th|s l-E th|ng to do?' says anothor.
°Oh, got 1oyota, my dad just got my s|stor ono.'
°App|o |s a good ono. W|th |lods and a|| that.'
At ono po|nt 1|na |ntorjocts: °1h|s |s just gamb||ng. You'ro bottor ott go|ng to vogas.'
1ho qu|otost group |s 1oam 1, |od by 1|m, tho tarmor's son. W|th tho rost ot tho group |ook|ng
|n, 1|m goos through tho stock ||st and mothod|ca||y p|cks stocks w|th tho h|ghost marg|n ot satoty
-a va|uo-|nvostor too| that moasuros tho d|ttoronco botwoon tho |ntr|ns|c va|uo ot a company and
|ts stock pr|co.
3y tho ond ot tho compot|t|on, 1|m's toam |s announcod as tho w|nnor.
°lt was protty s|mp|o,' ho says. °l just tocusod on |ow lE and h|gh marg|n ot satoty and |gnorod
ovoryth|ng o|so.'
1ho rost ot tho c|ass staros at h|m b|ank|y. lator ono ot thom asks 1|na a quost|on: °3o |s a
stock tho samo th|ng as a mutua| tund?'
Vost ot tho group |ooks stumpod.
1|A1 n|ght, tho studonts attond a spoc|a| d|nnor. 1hoy gathor at tho Un|vors|ty C|ub, ovor|ook|ng
tho campus |awns, and d|g |nto p|atos ot roastod ch|ckon and gr|||od vogotab|os.
1ho n|ght's spoakor |s Char|os °Chuck' Vart|n, a top vonturo cap|ta||st |n 3outhorn Ca||torn|a
and somoth|ng ot a cu|t horo among tho Orango County bus|noss sot. Vart|n, woar|ng an opon-
co||arod sh|rt, |s a ca|m, sott-spokon man w|th a woathorod taco and a br|ght sm||o. |o sponds
tho noxt hour to|||ng tho group h|s |nsp|r|ng rags-to-r|chos ||to story-tho poor tam||y |n rura| Oh|o,
tho dad who workod at tho post ott|co, tho t|rst papor routo.
°l novor to|t dopr|vod,' ho sa|d. °lt was ono ot tho groat advantagos. l novor had anyono ho|p mo
a|ong. lt was a|| up to mo.'
|o workod two jobs |n co||ogo and got throo dogroos.
°l had no soc|a| ||to,' ho says. °l wont on two datos tho ont|ro t|mo l was |n co||ogo. |or tho t|rst
dato, l took a g|r| out to havo cottoo. 1hank God |t was just cottoo bocauso l wou|dn't havo known
what to do |t |t was anyth|ng moro.'
Attor co||ogo, Vart|n wont to work tor |ughos E|octron|cs |n Ca||torn|a, work|ng on m|ss||o
systoms. |o |ator |ott w|th a son|or managor to start a vonturo-cap|ta| t|rm, dosp|to know|ng ||tt|o
about tho bus|noss.
°Ono ot tho tundamonta| roqu|romonts ot bo|ng an ontropronour |s bo|ng naïvo,' ho says.
Vart|n mado most ot h|s tortuno |nvost|ng |n start-ups and |ovoragod buyouts. |or 2b yoars, ho
co-ownod tho 1EC Organ|zat|on-a 3an 0|ogo-basod ch|ot oxocut|vos group that ho |ator so|d
to V|chao| V||kon and larry E|||son tor m||||ons.
At tho ond ot h|s ta|k, ono ot tho roa|ostato ho|rossos asks a quost|on.
°0o you havo k|ds?' sho asks.
°lo, wo don't,' ho says. °Wo aro surroundod by k|ds, w|th n|ocos and nophows and ovoryth|ng.
l havo sot as|do monoy tor scho|arsh|ps tor thom, but that's |t. Wo doc|dod thoro wou|d bo no
|nhor|tanco.'
1ho studonts |ook puzz|od. Ono wh|spors, °lo |nhor|tanco? lono?'
Attor thoy |oavo, l ask Chuck why ho doc|dod not to |oavo any monoy to h|s tam||y.
°1ho n|co th|ng about woa|th |s |t's vory ompowor|ng,' ho says. °3ut l th|nk |t can a|so havo
nogat|vo ottocts on poop|o, ospoc|a||y w|th k|ds. Ono th|ng l was go|ng to to|| thom, but l guoss l
doc|dod not to, was that |nhor|tod monoy can bo vory damag|ng.'
°1hoso k|ds aro at a roa| d|sadvantago |n somo ways.' Vart|n staros out tho w|ndow and
watchos tho l|| studonts c||mb |nto tho|r Vorcodos and land lovors. °l a|most too| sorry tor
thom.'


12

1EE WEAL1E CAP
AND 1EE Fu1uRE
OF R|CE|51AN
ln tho ta|| ot 200b, l t|ow to |t. laudorda|o tor tho 40th Annua| lntornat|ona| 3oat 3how-tho
wook|ong co|obrat|on ot boats, boachos and b||||ona|ros. 1ho boat show had bocomo ono ot my
yoar|y rout|nos as 7bo 1ooroo|'s woa|th roportor, |t was thoro, |n 2004, that l mot a 1oxas yachtor
who romarkod that tho Amor|can r|ch soomod to bo t|oat|ng ott to tho|r own country, g|v|ng r|so to
tho not|on ot l|ch|stan.
0ur|ng tho 200b show, howovor, l |oarnod a moro sobor|ng |osson.
0r|v|ng trom tho a|rport, l saw a c|ty cr|pp|od by storms. |urr|cano W||ma had poundod tho
rog|on 10 days oar||or, and |t. laudorda|o's stroots woro st||| covorod w|th brokon g|ass, troo
||mbs and garbago. Vost ot tho aroa's homos woro st||| w|thout powor. 3hops, rostaurants and
hoto|s woro boardod up and tho on|y poop|o who soomod to bo work|ng woro ut|||ty crows and
lod Cross toams.
W||ma roco|vod scant attont|on trom tho mod|a or govornmont, s|nco |t to||owod just a month
attor tho ovon groator tragody ot Katr|na |n low Or|oans. Yot ||ko Katr|na, W||ma d|dn't just |nt||ct
phys|ca| damago. lt a|so |a|d baro a vast soc|a| undorc|ass.
1housands ot ros|donts |n tho pooror soct|ons ot |t. laudorda|o (most ot thom b|ack or
||span|c) woro |ott homo|oss. Vany woro hordod |nto schoo| gyms and c|assrooms bocauso ot
tho |ack ot attordab|o ronta| apartmonts. A sma|| numbor ot vouchors handod out by tho |odora|
Emorgoncy Vanagomont Agoncy woro v|rtua||y uso|oss, s|nco thoy woro wo|| bo|ow |oca| ronta|
ratos. Wh||o 3outh ||or|da's ovor|nt|atod hous|ng markot had boon a boon to thowoa|thy, croat|ng
towors ot m||||on-do||ar boach condos, |t had w|pod out most ot tho attordab|o hous|ng.
°v|rtua||y nono ot tho (now) hous|ng |s tor |ow or modorato |ncomo poop|o,' wroto tho Vloml
loro|o.
lortron|a Cra|g, a mothor ot s|x, was sh|ppod w|th hor k|ds to two homo|oss sho|tors tho wook l
was thoro.
°l'm about to cry r|ght now,' sho to|d tho |oca| papor. °Am l supposod to s|t |n th|s sho|tor unt||
thoy k|ck mo out w|th my k|ds?'
1ust a tow m||os away, tho yacht show was k|ck|ng ott |ts opon|ng-day tost|v|t|os. 1ho 3ah|a
Var Var|na was packod w|th g|oam|ng, mu|t|m||||on-do||ar boats, tho|r chromo ra||s and
mahogany docks gott|ng a trosh now po||sh trom un|tormod crows. 3rokors woro |oad|ng r|ch
c||onts through tho hushod statorooms and crysta|-t|||od d|n|ng aroas ot tho mogayachts tor sa|o,
many pr|cod at $20 m||||on and up.
Vany ros|donts |n |t. laudorda|o woro swoat|ng through tho trop|ca| hoat, w|thout o|octr|c|ty.
1ho yachts and vondor pav|||ons woro portoct|y ch|||od. At |uncht|mo, l wa|kod |nto an a|r-
cond|t|onod hosp|ta||ty tont prov|dod by Yocbt Vogozloo, whoro u|trawoa|thy buyors cou|d como
|n trom tho hoat. 1ho guosts s|ppod champagno, ato crab cakos and d|ppod strawborr|os |nto a
g|ant choco|ato tounta|n stattod by two |oggy, b|ond wa|trossos. On tho |awn outs|do, a |oca|
lo||s-loyco doa|or was domonstrat|ng tho v|rtuos ot tho now $840,000 lo||s-loyco lhantom.
°l just bought a 3ont|oy |ast wook,' sa|d a yacht ownor trom low Or|oans who had r|ddon out
tho hurr|cano on h|s boat. °1orr|t|c car. l can't wa|t tor do||vory.'
Grantod, a tow yacht bu||dors boycottod tho show, say|ng |t was |nappropr|ato.
°Wo to|t bad|y to go |n thoro and havo th|s show that co|obratos |uxury yacht|ng, whon ros|donts
ot 3outh ||or|da aro st||| w|thout a |ot ot bas|c nocoss|t|os,' sa|d 0av|d loss, tho CEO ot 3urgor
3oat Co.
Yot tho |oca| mayor and tho show's promotor, Kayo loarson, |ns|stod that tho spond|ng by tho
r|ch wou|d ho|p ||tt tho town's sp|r|ts and oconomy. 1hoy don|od that any |oca| rosourcos-po||co,
o|octr|ca| crows, phono ropa|r mon-had boon d|vortod to tho show. 3t|||, loarson prom|sod that
guosts com|ng to buy a yacht wou|d hard|y know thoro had boon a hurr|cano.
°You cou|d como horo and not not|co any d|ttoronco,' sa|d loarson, proud|y.
1ho dua| roa||t|os |n |t. laudorda|o on that lovombor day-tho yachts, champagno bubb|os
and lo||s-loycos on ono s|do ot tho c|ty, and tho homo|oss, dost|tuto moms on tho othor-
rovoa|od an uncomtortab|o truth about l|ch|stan. Evon as l|ch|stan|s havo oxp|odod |n numbor
and woa|th ovor tho past docado, much ot Amor|ca |s bo|ng |ott boh|nd.
Vod|an |ncomos tor Amor|can housoho|ds to|| |n 200b tor tho t|tth yoar |n a row, and tho
mod|an tam|||os aro now mak|ng $8,000 |oss than thoy d|d |n 2000, adjustod tor |nt|at|on.
Voant|mo, |ncomos tor tho r|chost aro grow|ng |n tho doub|o d|g|ts.
3y a|most any moasuro, Amor|ca |s bocom|ng a moro unoqua| soc|oty. 1ho r|chost 1 porcont
ot Amor|cans contro| moro than 88 porcont ot tho tota| woa|th, and tho|r woa|th |s now groator
than tho bottom 00 porcont ot Amor|cans. 1ho sharo ot nat|ona| |ncomo ho|d by tho top 1 porcont
ot oarnors |s now tho h|ghost s|nco Wor|d War ll.
Vany ot tho coro |nst|tut|ons |n our soc|oty-oducat|on, po||t|cs, tho hoa|thcaro systom-aro
bocom|ng |ncroas|ng|y sogrogatod by woa|th. 1u|t|on tor top co||ogos |s soar|ng, ovon as somo ot
tho grants tor pooror studonts and stato support tor pub||c un|vors|t|os havo ta||od to koop paco.
1ho r|ch, trustratod by tho |nottoct|vonoss ot tho hoa|thcaro systom, aro |ncroas|ng|y turn|ng to
°conc|orgo doctors' (tho top spoc|a||sts pa|d pr|nco|y sums to sorvo a ||m|tod numbor ot tam|||os)
and abandon|ng tho nat|ona| hoa|th-caro systom. As po||t|ca| campa|gns bocomo moro
oxpons|vo, tho r|ch havo bocomo |ncroas|ng|y |mportant as sourcos ot tund|ng, thoroby gott|ng an
outs|zod vo|co |n po||cy.
votor apathy, says 1amos lardnor, toundor ot lnoqua||ty .Org, °t|ows trom tho susp|c|on ot
many Amor|cans that moan|ngtu| po||t|ca| roprosontat|on, ||ko rogu|ar doctor's v|s|ts and tour-yoar
co||ogo, has boon pr|cod out ot roach.'
1ho gap botwoon tho r|ch and ovoryono o|so has |mposod othor costs. As wo saw |n tho °3|zo
Vattors' chaptor, tho rocord consumpt|on by tho r|ch has sot a now standard tor tho rost ot tho
country to try to to||ow and |ott tho m|dd|o c|ass work|ng hardor and tak|ng |n moro dobt to koop
up.
lt has a|so, accord|ng to oconom|st lobort |. |rank, mado tho rost ot Amor|ca |oss happy,
s|nco happ|noss |s dot|nod |n |argo part by how wo|| you'ro do|ng comparod to thoso around you.
W|th so many poop|o gott|ng so r|ch-and parad|ng tho|r r|chos on 1v and |n pub||c-tho nonr|ch
too| |ncroas|ng|y onv|ous, |nadoquato or a comb|nat|on ot tho two. As a rosu|t, Amor|cans aro
spond|ng moro ot tho|r |ncomos on unnocossary |uxur|os to provo tho|r status, ovon as tho country
undortunds pross|ng prob|oms ||ko tho pub||c-schoo| systom, roads, br|dgos, hoa|th caro or tho
onv|ronmont. |rank wr|tos, °As |ncomos cont|nuo to grow at tho top and stagnato o|sowhoro, wo
w||| soo ovon moro ot our nat|ona| |ncomo dovotod to |uxury goods, tho ma|n ottoct ot wh|ch w|||
bo to ra|so tho bar that counts as |uxury.'
As l |ott tho |t. laudorda|o boat show |n lovombor, l startod to wondor about thoso |noqu|t|os.
|ow much was too much? |ow |ong cou|d l|ch|stan |ast? Wou|d tho gap botwoon l|ch|stan|s
and tho rost ot Amor|ca croato a now wavo ot soc|a| and po||t|ca| unrost, as |n tho G||dod Ago
and loar|ng 1wont|os? Or wou|d thoso gaps bo to|oratod as tho |nov|tab|o consoquonco ot
g|oba|, h|gh-toch cap|ta||sm?
1ho G||dod Ago and loar|ng 1wont|os both spawnod votor back|ashos, w|th 1hoodoro
loosovo|t bust|ng tho corporato trusts |n tho oar|y 1000s and |rank||n 0o|ano loosovo|t ushor|ng
|n tho low 0oa| |n tho 1080s. 1oday, thoro's grow|ng ov|donco that tho 1h|rd Wavo |s a|so
spawn|ng votor trustrat|on. W|th tho m|dd|o and |owor c|assos soo|ng |oss and |oss ot tho
oconom|c ga|ns ovor tho past docado, tho rosurgont 0omocrats aro turn|ng tho|r attont|on to
|ncroas|ng tho m|n|mum wago, ||m|t|ng g|oba| trado and try|ng to boost govornmont tund|ng tor
oducat|on.
Othors aro targot|ng tho r|ch, ma|n|y by ra|s|ng tho|r taxos. Wh||o consorvat|vos arguo that
°lob|n |ood' po||c|os w||| choko ott oconom|c growth and roduco ontropronour|a| |ncont|vos,
somo acadom|cs and po||cy oxports say roba|anc|ng tho tax systom |s cr|t|ca| to a broad-basod
oconomy. Edward Wo|tt, tho woa|th oxport at low York Un|vors|ty, has proposod a spoc|a|
°woa|th tax' on tho r|chost housoho|ds (tho ratos wou|d vary by woa|th |ovo|s).
°1ho on|y way to got moro monoy to tho m|dd|o c|ass |s to rod|str|buto moro monoy trom tho
woa|thy,' Wo|tt says. °l th|nk tho tax systom noods to bo rovampod, wh|ch w||| s|ow tho growth
among thoso at tho vory top.'
1ho 0omocrat|c swoop ot Congross |n 2000 hora|ds a now wavo ot popu||st sont|mont, dr|von
|n |argo part by m|dd|o-c|ass d|scontont. Yot Amor|cans aron't ||ko|y to roach tor tho p|tchtorks
anyt|mo soon. As mora||y troub||ng and po||t|ca||y chargod as tho |ssuo ot |noqua||ty has bocomo,
|t's not ||ko|y to causo a popu||st rovo|t. Vost Amor|cans st||| havo a gonora||y pos|t|vo v|ow ot tho
woa|thy and, r|ght|y or wrong|y, bo||ovo thoy too can mako |t to l|ch|stan somoday. 1ho|r
protorrod so|ut|on to |noqua||ty, accord|ng to po||s, |s to bottor nour|sh tho m|dd|o c|ass, rathor
than oat|ng tho r|ch.
°1ho tocus tor votors |s on ra|s|ng tho ||v|ng standards ot tho m|dd|o c|ass, not on pona||z|ng tho
top 1 porcont,' says 3tan Groonborg, a 0omocrat|c po||stor. °1ho|r pr|or|ty |sn't to stop tho top 1
porcont trom do|ng wo||.'
lnoqua||ty, |n short, |sn't ||ko|y to shut down l|ch|stan. lt anyth|ng, tho torcos that havo tuo|od
l|ch|stan's growth-tho r|s|ng r|vor ot monoy trom around tho wor|d, |ncroas|ng|y g|oba| markots
and now tochno|og|os-roma|n strong. Exports prod|ct that tho numbor ot m||||ona|ros and
b||||ona|ros |s ||ko|y to grow at |oast 0 porcont a yoar |n tho com|ng yoars. ln tact, as l|ch|stan
grows, |noqua||ty |s ||ko|y to w|don-not on|y botwoon l|ch|stan and Amor|ca, but a|so botwoon
lowor and Uppor l|ch|stan|s.

1ho NovabIo Foaat

As wo |oarnod |n tho 1h|rd Wavo chaptor, l|ch|stan owos |ts succoss |argo|y to tho g|ant r|vor ot
monoy t|ow|ng around tho wor|d soarch|ng tor good |nvostmonts. 1ho r|vor has carr|od m||||ons ot
Amor|cans to l|ch|stan, as |t coursod |nto tho stock markot and othor t|nanc|a| markots and ||ttod
tho tortunos ot lnstapronours, oxocut|vos and stockho|dors. Amor|cans cou|d movo moro oas||y to
l|ch|stan |n |argo part bocauso monoy cou|d movo moro oas||y around tho wor|d.
1hroughout tho 1000s, tho r|vor movod ma|n|y to tho Un|tod 3tatos. Our rap|d oconom|c
growth, tochno|og|ca| |nnovat|on, g|ant stock markot, ott|c|ont t|nanc|a| systom and ro|at|vo|y
transparont bus|noss c||mato mado |t a |og|ca| p|aco tor both Amor|can and toro|gn |nvostors to
put tho|r monoy.
low, tho r|vor |s oxpand|ng and sp||||ng |nto othor countr|os whoro tho growth |s strongor-
ma|n|y Ch|na, lnd|a and parts ot 3outhoast As|a, oastorn Europo and lat|n Amor|ca. As a rosu|t,
l|ch|stan |s bocom|ng moro |ntornat|ona|. Amor|ca w||| st||| bo a hugo ong|no ot woa|th croat|on,
porhaps ovon moro so as Amor|can compan|os and |nvostors bonot|t trom growth ovorsoas. Yot
ovor tho noxt b to 10 yoars, product|on ot m||||ona|ros w||| dr|tt away trom tho Un|tod 3tatos.
3tophon Vart|ros, tho manag|ng d|roctor ot CCC A|||anco, tho 3oston-basod poor group tor
tho r|ch, ||kons l|ch|stan to a °movab|o toast.'
°What's croatod so much woa|th |n tho Un|tod 3tatos |s tho rap|d movomont ot cap|ta| trom ono
part ot tho markot and tho wor|d to anothor,' ho sa|d. °|or tho |ast 10 yoars, tho Un|tod 3tatos has
boon tho sato havon tor cap|ta|. Wo woro tho h|gh ground. 1hat w||| st||| bo tho caso tor somo
t|mo. 3ut tho cap|ta| |s a|so mov|ng o|sowhoro, to |ong Kong, london, 3|ngaporo, 0uba|.'
1hoso g|oba| sh|tts w||| ottoct l|ch|stan |n two b|g ways: lt w||| bocomo moro g|oba||y d|vorso,
and |t w||| bocomo moro unoqua|.
As thoy bocomo |ncroas|ng|y woa|thy, tho wor|d's r|ch w||| torm a °th|rd' cu|turo-not trom tho|r
own country, or trom Amor|ca, but trom a d|ttoront, sharod wor|d ot woa|th. 1hoy'|| stay at tho
samo hoto|s (|our 3oasons, l|tz Car|tons) dr|vo tho samo cars (3ont|oys, lo||s), oat many ot tho
samo toods (sush| tus|on), woar tho samo c|othos and accossor|os (Gucc|, vu|tton, |ranck
Vu||or) and go to tho samo vacat|on spots (3t. 3art's, Vonaco, Va|d|vos).
1ho r|ch w||| bocomo |oss and |oss attachod to tho|r own countr|os and moro ||ko g|oba| c|t|zons
ot l|ch|stan. 1hoy w||| |nvost around tho wor|d, rathor than putt|ng a|| tho|r monoy back |nto tho|r
own commun|t|os or countr|os. 1hoy w||| th|nk, ||vo and buy as l|ch|stan|s, not as Amor|cans,
lnd|ans or luss|ans.
Cons|dor tho 3anto 0om|ngo tam||y trom Co|omb|a. As tho boor k|ngs ot Andoan lat|n
Amor|ca, tho tam||y spont docados p|ow|ng tho|r prot|ts back |nto tho|r bus|noss and bu||d|ng up
browor|os |n Co|omb|a, loru, Ecuador and lanama. ln 200b, tho brow|ng g|ant morgod w|th
3A3 V|||or |n roturn tor $7.8 b||||on |n stock, g|v|ng tho 3anto 0om|ngo tam||y |ts |ong-awa|tod
°||qu|d|ty ovont.'
1ho tam||y's woa|th st||| ro||os hoav||y on tho boor bus|noss, s|nco thoy ho|d tho 3A3 stock. And
thoy st||| havo major bus|nossos |n Co|omb|a. 3ut rathor than bo|ng oxposod to tho oconom|os ot
lat|n Amor|ca, tho tam||y's boor oarn|ngs aro now sproad throughout lorth Amor|ca, Europo and
As|a. 1ho 3anto 0om|ngos aro a|so |nvost|ng |n U.3. hodgo tunds, Europoan stocks and As|an
tunds.
1wo tam||y mombors now ||vo |n tho Un|tod 3tatos and aro Amor|can c|t|zons, and anothor
s|b||ng ||vos |n Europo.
°1ho tam||y too|s that, ||ko any |nvostor, thoy shou|d bo g|oba| |n tho|r porspoct|vo,' says 3ob
|amshaw, who runs tho tam||y's |nvostmonts trom low York. °1ho 3A3 V|||or morgor mado thom
g|oba| |nvostors ovorn|ght, thorotoro thoy havo to cons|dor tho g|oba| oconomy, not just tho |oca|
oconomy or tho boor oconomy. l th|nk you'|| soo moro and moro tam|||os tako th|s approach
around tho wor|d.'
1ust as g|oba||zat|on, cap|ta| and tochno|ogy havo mado ||to moro compot|t|vo tor avorago
Amor|cans, thoy w||| a|so mako ||to toughor tor l|ch|stan|s. 1ho r|chost l|ch|stan|s w||| bo |n tho
bost pos|t|on to tako advantago ot tho g|oba| oconomy, a b||||ona|ro, tor |nstanco, has tho
contacts and cash ava||ab|o to, say, buy a hoto| |n lnd|a or |nvost |n a hodgo tund |n |ong Kong.
Wh||o ovoryday |nvostors can a|so |nvost ovorsoas, most ot tho|r assots w||| st||| bo |n tho|r homo
countr|os.
°lt l'm worth $8 m||||on, and you'ro worth $1 b||||on, |t's a |ot oas|or tor you to put a tow m||||on
|nto a vonturo-cap|ta| tund |n lnd|a, and that w||| do||vor tho bottor roturns,' Vart|ros says. °1hoso
w|th |owor woa|th w||| ovontua||y got dono |n by consumpt|on. 1hoy'ro s|mp|y spond|ng too much to
bo ab|o to |nvost s|gn|t|cant amounts ovorsoas.'
Uppor l|ch|stan|s w||| havo a b|ggor ||toboat |n tho |ncroas|ng|y ro|||ng g|oba| oconomy, wh||o
tho lowor l|ch|stan|s w||| bo |oss protoctod.
°1ho poop|o w|th vory |argo woa|th w||| bocomo turthor soparatod trom ovoryono o|so,' Vart|ros
says.

A 5Iivor ot Eoµo

1ho downs|do ot l|ch|stan's tuturo |s that |noqua||ty w||| on|y grow. 1horo w||| bo moro l|ch|stan|s
w|th ovor-b|ggor yachts, and moro poop|o ||ko homo|oss mothor lortron|a Cra|g, |ott adr|tt |n tho
wor|d's oconom|c storms.
1horo |s, howovor, ono g||mmor ot hopo. Evon as tho oconomy and g|oba| markots dump moro
and moro monoy |nto tho hands ot a tow (or tow m||||on), tho l|ch|stan|s w||| havo ovon moro
woa|th and powor to t|x soc|oty's most pross|ng prob|oms. lt wo accopt that tho r|ch aron't tho
causo ot tho curront |noqu|t|os, but moro|y tho |ucky bonot|c|ar|os, wo can a|so hopo that thoy w|||
uso tho|r woa|th to ho|p targot soc|oty's doopost prob|oms.
0ur|ng tho G||dod Ago and loar|ng 1wont|os, |t was tho r|ch, progross|vo po||t|c|ans, ||ko tho
loosovo|ts, who took tho strongost |n|t|at|vo to shr|nk tho woa|th gap |n Amor|ca. 1ho samo may
provo truo dur|ng tho 1h|rd Wavo, as l|ch|stan| po||t|c|ans ||ko 1arod lo||s and V|chao|
3|oomborg uso tho|r monoy to rotorm tho oducat|on and hoa|thcaro systoms to bottor support tho
m|dd|o and |owor c|assos.
And just as woa|th w||| bocomo moro g|oba|, so w||| ph||anthropy. l|ch|stan|s w||| turn tho|r
attont|on not just to t|x|ng low York's |nnorc|ty schoo|s and bu||d|ng homos |n low Or|oans, but
a|so to tood|ng tho hungry |n Atr|ca, Cambod|a and 3raz||. Voro and moro l|ch|stan|s can to||ow
tho oxamp|o ot lh|||p 3orbor, tho lr|sh 1ow|sh 1oxan who's try|ng to oaso povorty |n Eth|op|a.
°Vy hopo |s that as wo bocomo woa|th|or, and moro g|oba| |n our m|nds, our hoarts w||| to||ow,'
says 3orbor.
1hus, l|ch|stan|s can t|na||y roa||zo Androw Carnog|o's droam tor tho r|ch. 3omoday, tho r|ch
w||| movo boyond tho oxcossos ot b00-toot yachts, $8b0,000 lo||s-loycos and a|||gator-sk|n jot
pott|os. 1hoy w||| soo that tho|r monoy |s not a g|tt but a rospons|b|||ty. 1hrough smartor
ph||anthropy ||ko 3orbor's, l|ch|stan|s can ovontua||y tu|t||| Carnog|o's 100-yoar-o|d droam ot a
°roconc|||at|on botwoon r|ch and poor, a ro|gn ot harmony.'
°Wo sha|| havo an |doa| stato,' ho sa|d, °|n wh|ch tho surp|us woa|th ot tho tow can bo mado a
much moro potont torco tor tho o|ovat|on ot our raco.'
Wo can on|y hopo.


Notes

Ouotos or tacts not attr|butod to outs|do sourcos camo trom |ntorv|ows by tho author.

|N1RODuC1|ON

3Y 2004 °lncomo lnoqua||ty |n tho Un|tod 3tatos, 1018-1008' Emmanuo| 3aoz and 1homas l|kotty, Ooortor|y 1ooroo| oí
Ecooomlcs, 118(1), 2008, 1-80. Updatod w|th 2004 stat|st|cs.
W|El 1|E |ll31 |Ol3E3 400 °1ho Varch ot tho |orbos 400,' W||||am l. 3arrott, lorbos, 3opt. 80, 2002.
1|E lUV3El O| 3llllOlAllE3 °1wo 0ocados ot Woa|th,' lorbos Wob s|to.
3Y 2000 °Curronts and Undorcurronts: Changos |n tho 0|str|but|on ot Woa|th, 1080-2004,' Arthur 3. Konn|cko||, 3on|or
Econom|st |odora| losorvo 3urvoys.
lAll3 |ll1Ol 3ourcos ot Woa|th 3urvoy, lr|nco 8 Assoc.
lOWEl llC|l31Al l3 1|E |odora| losorvo 3urvoys ot Consumor ||nanco, 2004.
VOlE 1|Al |Al| U|tra ||gh lot Worth 3ourcos ot Woa|th, 3poctrom Group, 200b.
A VA1Oll1Y E|oct|on 3urvoy, lr|nco 8 Assoc., 2004.
1|E ECOlOVlC 0l31AlCE °Curronts and Undorcurronts,' Konn|cko||.
1|E AvElAGE llCOVE °lncomo lnoqua||ty |n tho Un|tod 3tatos, 1018-1008,' Emmanuo| 3aoz and 1homas l|kotty,
Ooortor|y 1ooroo| oí Ecooomlcs 118(1), 2008, 1-80, |ongor updatod vors|on, lovombor 2004, torthcom|ng |n A. 3.
Atk|nson and 1. l|kotty, ods., Oxtord Un|vors|ty lross.
ll 2004 200b Wor|d Woa|th loport, Capgom|n|, Vorr||| lynch, p. 10.
lOWEl llC|l31All3 |AvE 2004 |odora| losorvo 3urvoys ot Consumor ||nanco.
A3OU1 20 lElCEl1 O| lOWEl °Curronts and Undorcurronts,' Konn|cko||.
ll 1|E WOl03 7bo Oospo| oí ¼oo|tb, Androw Carnog|o, Commomorat|vo Ed|t|on, Carnog|o Corporat|on ot low York,
2001, p. 18.
Vl00lE llC|l31Al |A3 U|tra ||gh lot Worth 3ourcos ot Woa|th, 3poctrom.
VO31 Vl00lE E|oct|on 3urvoy, lr|nco 8 Assoc., 2004.
1|E ll|lA1lOl lA1E 200b Wor|d Woa|th loport, p. 10.
VO31 VA0E 3ourcos ot Woa|th 3urvoy, 3poctrom, 200b.
1|E 1O1Al WEAl1| °Curronts and Undorcurronts,' Konn|cko||.

2

°ll Al AGE' ¼oo|tb ooo Lomocrocy. A Po|ltlco| llstory oí tbo Amorlcoo Rlcb, Kov|n lh||||ps, 3roadway 3ooks, 2002, p.
1b0.
GOvEllVEl1 ElCOUlAGE0 lh||||ps, p. 800.
1|E lUV3El O| VllllOlAllE3 lh||||ps, p. 80.
3Y 1800 lh||||ps, p. 48.
1|E lUV3El O| VllllOlAllE3 lh||||ps, p. 08.
1|E 3|AlE lh||||ps, p. 70.
1|E Vl00lE ClA33 E1|O3 . . . lh||||ps, p. 70.
1|E 3|AlE O| WEAl1| °Curronts and Undorcurronts,' 1ab|os 11A and 113.
|Al| O| AVEllCA'3 |odora| losorvo 3urvoys ot Consumor ||nancos.
|Ol 1|E |ll31 1lVE 200b Wor|d Woa|th loport.
ll 200b 2000 Wor|d Woa|th loport.
YEAl3 O| lOW ll1ElE31 lA1E3 °3o|j|ng Vust |orco lad|ca| lotorm ot 3tato-Ownod ||rms' ||nancos,' 1om |o||and,
5ootb Cbloo Vorolog Post, 1u|y 24, 2000, p. 2.
ll 1|E 3AVE lEllO0 °Awash |n Cash: Choap Vonoy, Grow|ng l|sks,' Grog lp and Vark Wh|tohouso, 7bo ¼o|| 5troot
1ooroo|, lov. 8, 200b, p. 1.
1|ElE AlE lOW °0osp|to 3|uo-Ch|p Ga|ns, |odgo |unds lncroas|ng|y Aro |a|tor|ng and C|os|ng,' An|ta laghavan,
lantho 1oanno 0ugan, and Grogory Zuckorman, 7bo ¼o|| 5troot 1ooroo|, Octobor 4, 2000, p. C1.
VOlE 1|Al 4,000 0ata trom 1homson ||nanc|a|.
°l 31Al1E0 AGGlE33lvElY . . .' °3oarch|ng tor a |omo |n Athorton,' lu| W|ng 1am and Vy|ono Vanga||ndan, 7bo ¼o||
5troot 1ooroo|, 1u|y 12, 200b, p. 1.
0llvEl 3Y 0ata trom 1homson ||nanc|a|.
WAll 31lEE1 3AlK3 0ata trom 1ho 3ocur|t|os lndustry Assoc|at|on.
ll 1|E 3Al |lAlCl3CO °1op 100 3ay Aroa Exocut|vos by Componsat|on,' 1odd Wa||ack, 5oo lrooclsco Cbroolc|o, Vay
21, 2000, p. |1.
1|E lAlK3 3ourcos ot Woa|th 3urvoy, lr|nco 8 Assoc.
ll|Ell1E0 WEAl1| Al3O 31Al13 3ourcos ot Woa|th 3urvoy, lr|nco 8 Assoc.
1|E 1Ol |E0ElAl ll3, U.3. lnd|v|dua| lncomo 1ax latos 1018 to 200b.
1O GE1 ll1O 3urvoys ot Consumor ||nanco, 2004.

8

lAUl lAU|El °Coram|cs 0ynam|cs,' 3a||y Apgar, 5tor-7rlbooo Nowspopor oí tbo 7wlo Cltlos, 0ocombor 22, 100b.

5

AVEllCAl VllllOlAllE3 2002 Wor|d Woa|th loport.
O| 1|E 400 °Alo|||ng 1|do: Changos |n tho 0|str|but|on ot Woa|th |n tho U.3. 1080-2001,' Arthur Konn|cko||, |odora|
losorvo 3oard, 0opartmont ot losoarch and 3tat|st|cs, lov. 2008, p. 8.
1|E 200b |Ol3E3 °0ropouts,' lorbos, 3opt 20, 200b.
3lll GA1E3 lO31 °V|crosott Gu||ty ot v|o|at|ng Ant|-1rust lu|os,' C33 lows, Apr|| 4, 2000.
°W|llE AlAlGE . . .' ls 1h|s a Groat Country? Upward Vob|||ty and tho Chanco tor l|chos |n Amor|ca,' 1homas 0|lroto,
Co|umb|a Un|vors|ty, 2004, p. 11.

0

|llEVAl VAll1All3 ºl|ch vs. l|chor: ln la|m 3oach, tho O|d Vonoy lsn't |av|ng a 3a||,' lobort |rank, ¼o|| 5troot
1ooroo|, Vay 20, 200b.
ll AlClEl1 GlEECE Ouotos and c|tat|ons ro|atod to anc|ont Grooco woro t|rst brought to my attont|on by lrotossor
1os|ah Obor ot 3tantord Un|vors|ty.
|E Wll1E3 7bo Ecooomlc ooo 5oclo| Orowtb oí Eor|y Orooco, Chostor G. 3tarr, Oxtord Un|vors|ty lross, 1077, pp. 127-
28.
°1|ElE l3 A0l||ElElCE . . .' Arlstot|o oo Rbotorlc, 3ook 2, chaptor 10, trans|at|on by Goorgo A. Konnody, Oxtord
Un|vors|ty lross, 1001.
COllEllU3 °COVVO0OlE' vAl0El3ll1 lh||||ps, p. 20.
lOlG1lVE GlEElWlC|El3 °land ot tho 3|g luts '1oo 3|g' to tho 1ost,' A||son lo|gh Cowan, 7bo Now York 7lmos,
Varch 18, 2000.
AVOlG 1|E lA1lOl'3 0ata trom Edward Wo|tt.
OllY A 1|ll0 °Curronts and Undorcurronts,' Konn|cko||, p. 28.
l1'3 Al3O KlOWl 7bo 5oosoo. losloo Po|m Boocb ooo Amorlco's Rlcbost 5ocloty, lona|d Koss|or, |arporCo|||ns, 1000,
p. 4b.
lU|| 0A00Y °Anchor Away: 1vb's 0unn to 3top 0own,' 1hom 3m|th, Po|m Boocb Post, Apr|| 27, 1008.

7

ACCOl0llG 1O OlE 31U0Y |arr|son Group 3tudy c|tod |n °1ho 1rust Equat|on,' Argoot. lta|y t|guro trom 7bo
Ecooomlst's Wor|d |n ||guros 200b.
1|E ll|lA1lOl lA1E 200b Wor|d Woa|th loport.
°1|E 3A3l3 . . .' 7bo 7boory oí tbo Lolsoro C|oss, 1horsto|n vob|on, 0ovor lub||cat|ons, 0ovor 1hr|tt Ed|t|ons, 1004, p. b2.
YE1 3O1| 3OA13 °1op 100 Wor|d's largost Votoryachts,' Yocbt Vogozloo, 1u|y 2000.
Ol0El3 |Ol 5bowboot Vogozloo, 2000 G|oba| Ordor 3ook.
°3All l3 31lll |Al . . .' C|oss. A Ooloo 7broogb tbo Amorlcoo 5totos 5ystom, lau| |usso||, 3|mon 8 3chustor, 1088, pp.
112-18.
GUE313 A3OAl0 °1ho Wor|d's |undrod largost Yachts, 200b,' lowor 8 Votoryacht Wob s|to.
1|E 20b-|OO1 lowor and Votoryacht.
1|E 3|ll 3ourcod trom yacht bu||dors and a brokor.
A 3|Ol1 1lVE lA1El 3ourcod trom yacht bu||dors.
A llO|llE O| Elll3Ol °Abso|uto|y Excoss|vo,' Vatthow 3ymonds, Voolty lolr, Oct. 200b, p. 818.
°WEll, l 0O . . .' 3ymonds.
1|E GlAl0E31 3||tmoro Estato Wob s|to.
1|E3E |OVE3 lat|ona| Assoc|at|on ot |omo 3u||dors.
lEOllE3O|1 °AVan's |omo Vay 3o ||s Cast|o, but On|y to a lo|nt,' latr|c|a lo|gh 3rown, 7bo Now York 7lmos, 0oc.
28, 200b.
EvEl 1|E ZAV3Oll °Groonw|ch's Outragoous |ortuno,' l|na Vunk, Voolty lolr, 1u|y 2000, p. 18b.
A |OVE 3Ull1 °$0b V||||on lr|cod to 3o||,' Am|r Atrat|,7bo ¼o|| 5troot 1ooroo|, 1an. 18, 2000.
A 00,000-3OUAlE-|OO1 Atrat|, 7bo ¼o|| 5troot 1ooroo|.
Ol 1|E WE31 3l0E Atrat|, 7bo ¼o|| 5troot 1ooroo|.
1|E |OVE'3 31AllCA3E °|omo ot 1ommy |||t|gor Cotoundor on Varkot,' lomoo Roo| Estoto Nows, Aug. 7, 2000.
1|E lEW lECOl0 3lEAKEl °|or 3a|o: lr|nco's la|aco, Aspon Zll-$18b V||||on,' 1roy |oopor, Rocky Voootolo Nows,
1u|y 12, 2000.
GOOGlE |OUl0El3 °W|do ||y|ng Vogu|s,' Kov|n 0o|anoy, 1. lynn lunstord, and Vark Varomont, 7bo ¼o|| 5troot
1ooroo|, lov. 4, 200b.
AVOlG O1|El AVEll1lE3 °W|do ||y|ng Vogu|s,' 7bo ¼o|| 5troot 1ooroo|.
°lAl1 O| 1|E EOUA1lOl . . .' °W|do ||y|ng Vogu|s,' 7bo ¼o|| 5troot 1ooroo|.
Ol OlE 0AY ll 1AlUAlY °Vy Othor voh|c|o ls a Gu|tstroam,' Guy 1robay, 7bo Now York 7lmos, Aug. 0, 2000.
1|E 3lG AUC1lOl3 °lortra|t ot a 3u|| Varkot,' 1oanno Vc0owo||, 7lmo, lov. 20, 2000, p. 04.
31EvEl CO|El |A3 °1ho |odgo-|und K|ng ls Gott|ng lorvous,' 3usan lu|||am, 7bo ¼o|| 5troot 1ooroo|, 3opt. 10, 2000.
3Wl33 WA1C| EXlOl13 |odorat|on ot tho 3w|ss Watch lndustry.
Ol, A3 A3U3llE33WEEK °Exocut|vo l|to: Watchos Who Caros What 1|mo lt ls?' 3ruco lussbaum, Boslooss¼ook, Vay
22, 2000.
1|E |llAlClAl COlUVll31 °0on't |ato 1hom 3ocauso 1hoy'ro l|ch,' 0an|o| Gross, Now York Vogozloo, 0oc. b, 200b.
ll llU1OlOVlE3 °1ho G|oba| lnvost|gator: l|utonomy: 3uy|ng luxury, Exp|a|n|ng G|oba| lmba|ancos,' Ajay Kapur ot a|.,
C|t|group Equ|ty losoarch, Oct. 14, 200b, p. 11.
1|E lA1lOl'3 llC|E31 3urvoys ot Consumor ||nanco 2004.
ll A3EllE3 O| E-VAll3 °lns|do look at a 3||||ona|ro's 3udgot / larry E|||son's 3pond|ng Worr|os ||s Accountant,' Carr|o
K|rby, 7bo 5oo lrooclsco Cbroolc|o, 1an. 81, 2000.
°1|E lEAl 3lGll|lCAlCE . . .' Loxory lovor. Voooy ooo lopplooss lo oo Ago oí Excoss, by lobort |. |rank, lr|ncoton
Un|vors|ty lross, 1000, p. 11.
°1|E3E lEW |lG|El . . .' Loxory lovor, |rank, p. 270.

8

1O1Al C|All1A3lE GlvllG G|v|ng U3A 3urvoy, 200b.
1|E lUV3El G|v|ng U3A.
3lll GA1E3'3 °3urvoy ot Woa|th and lh||anthropy,' 7bo Ecooomlst, |ob. 2b, 200b.
ll 2008 °lonprot|t Ett|c|oncy-||x|ng tho loak: Amor|ca's Char|t|os Cou|d 3avo 3||||ons-and 0onors Aro 0omand|ng lt,'
A||no 3u|||van, Borroo's, 0oc. 8, 2008.
ll A 200b 3oston Co||ogo Contor on Woa|th and lh||anthropy.
°lEOllE lEAllZE . . .' °1ho Groat G|voaway-l|ko Warron 3uttott, a low Wavo ot lh||anthrop|sts Aro lush|ng to 3pond
1ho|r Vonoy 3otoro 1hoy 0|o,' 1ohn |och|ngor and 0an|o| Go|don, 7bo ¼o|| 5troot 1ooroo|, 1u|y 8, 2000.
°1|E 1O3 . . .' Ashoka Wob s|to.
1|E $1 3llllOl |OUl0A1lOl °lh||anthropy Goog|o's Way: lot tho Usua|,' Kat|o |atnor, 7bo Now York 7lmos, 3opt. 14,
2000.
°A|1El A |EW YEAl3 . . .' °1ho 3|rth ot lh||anthrocap|ta||sm,' 7bo Ecooomlst, |ob. 2b, 2000.
°Ul1ll YOU 31Al1 . . .' °1ho low |aco ot lh||anthropy,' 1ohn A. 3yrno w|th 1u||a Cosgrovo, 3r|an ||ndo, and Adam
0ayan, Boslooss¼ook, 0oc. 2, 2002.

0

VOlE 3Ullll3llGlY 0ata trom 1ho Co|orado log|s|at|vo Counc||.
lOUl0llG OU1 1|E GlOUl °Gang ot |our,' 3tuart 3toors, 5280, Vay 200b.
A3 3ll0GE3 1Ol0 °Gang ot |our,' 3toors.
1|E3E °lEAl1E1 ll3ElAl3' °Aro You a loarjot l|bora|?,' 1onathan lauch, Notlooo| 1ooroo|, |ob. 10, 2001.
1|E lUV3El O| CAl0l0A1E3 1onn|tor A. 3toon, Assoc|ato lrotossor, 3oston Co||ogo.
VlC|AEl 3lOOV3ElG °|or 3|oomborg, 'lt's Good to 3o a 3||||ona|ro,'' V|chao| lowo|| and Chr|s C||||zza, ¼osblogtoo
Post, 0oc. 0, 200b.
VOlE 1|Al A0OZEl °Eros|on ot Estato 1ax ls a losson |n lo||t|cs,' 1onathan Wo|sman, ¼osblogtoo Post, Apr|| 18,
200b.
°1|E E33ElCE . . .' ¼oo|tb ooo Lomocrocy, lh||||ps, p. xv.
lOll3 3AY3 °3tato Ed 3oard Vombor lo||s Announcos
|o's Gay,' 3ara 3urnott and 3tuart 3oors, Rocky Voootolo Nows, 1u|y 0, 2000.
|E 3|lllE0 08 °low lamo, ||owors lavo Way tor lo||s,' lotor 3|ako, Rocky Voootolo Nows, Vay 17, 2000.
Al3O Ol3OAl0 |orbos 2000 400 l|chost Amor|cans.
0YEl WA3 lA1El °||ap ovor $10 |ouso,' loggy lowo, Rocky Voootolo Nows, 3opt. 10, 2004.
°1|EY All CAVE 1OGE1|El . . .' °1ho|r Contr|but|ons |o|pod 3uy a Cad|||ac Campa|gn |n Co|o.,' 1osh Kurtz, Ro|| Co||,
|ob. 2, 200b.

10

A3 WE 3AW ll 1|E |ll31 llC Adv|sors, Woa|th and va|uos 3urvoy, 1an. 20, 200b.
ll |l3 3OOK 7bo Vlrtoo oí Prosporlty. lloolog Vo|oos lo oo Ago oí 7ocboo-Aíí|oooco, 0|nosh 0'3ouza, 3|mon 8 3chustor,
2000, p. 107.

11

3A3E0 Ol AvElAGE |AVllY 3urvoy ot Consumor ||nanco 2004.
Ul 1O $1b 1lllllOl °Ovor tho loxt b0 Yoars 1r||||ons W||| 3o lassod On,' 1ott Gammago, Pbl|ooo|pblo loqolror, Varch 0,
2004.
A 3UlvEY 3Y llllCE °Who Gots tho Vonoy,' lr|nco 8 Assoc., 2000.
1O0AY'3 llC| °1ho 3tatus ot Woa|th |n Amor|ca,' Worth-|arr|son 1ay|or 3tudy, ¼ortb Vogozloo, lov. 200b, p. 81.
lllvA1E 3C|OOl3 °Gott|ng ovor tho Wa||,' Wondy 3o|zborg, Now York 5oo, |ob. 18, 2008.
ll OlE 31U0Y llC Adv|sors, Woa|th and va|uos 3urvoy, 200b.

12

°vll1UAllY lOlE . . .' °0|sp|acod |n 'Cr|s|s' ot Attordab|o |ous|ng,' Vatthow |aggman, 7bo Vloml loro|o, lov. 8, 200b.
°l'V A3OU1 1O ClY . . .' °|o|p|oss and |omo|oss,' 1onya A|anoz, l|sa 1. |ur|ash, and 1am|o Va|ronoo, 5ootb l|orloo
5oo-5ootloo|, lov. 4, 200b.
°WE |El1 3A0lY . . .' °|u|| 3pood Ahoad,' Amy Vart|noz, 7bo Vloml loro|o, lov. 8, 200b.
°YOU COUl0 COVE . . .' °|u|| 3pood Ahoad.'
VE0lAl llCOVE3 Econom|c lo||cy lnst|tuto.
1|E llC|E31 1 lElCEl1 |odora| losorvo 3urvoys ot Consumor ||nanco.
1|E 3|AlE O| lA1lOlAl llCOVE °lncomo lnoqua||ty |n tho Un|tod 3tatos, 1018-1008,' w|th 1homas l|kotty, Ooortor|y
1ooroo| oí Ecooomlcs, 118(1), 2008, 1-80 (tab|os and t|guros updatod to 2004).
vO1El AlA1|Y looqoo|lty Vottors. 7bo Orowlog Llvloo lo Amorlco ooo lts Polsoooos Coosoqooocos, 1amos lardnor and
0av|d A. 3m|th, ods., 1ho low lross, 200b, p. 22.
°A3 llCOVE3 COl1llUE . . .' lo||log Bobloo. low Rlslog looqoo|lty lorms tbo Vloo|o C|oss, lobort |. |rank, Un|vors|ty
ot Ca||torn|a lross, 2007.
EXlEl13 llE0lC1 Wor|d Woa|th loport 2000.
1|lOUG| 3VAl1El 7bo Oospo| oí ¼oo|tb, Carnog|o, p. 21.
°WE 3|All |AvE Al l0EAl . . .' 7bo Oospo| oí ¼oo|tb, p. 21.


Acknowledgments

1h|s book wou|d not havo boon poss|b|o w|thout tho support ot count|oss od|tors, co||oaguos,
tr|onds, tam||y and woa|th oxports.
l am gratotu| to lau| 3to|gor and 0an |ortzborg ot 7bo ¼o|| 5troot 1ooroo| tor g|v|ng mo tho
t|mo and rosourcos to croato tho woa|th boat and oxpand my roport|ng |nto a book. 1hoy aro two
ot tho most car|ng, mot|cu|ous and dod|catod od|tors |n journa||sm and l'm proud to havo workod
tor thom tor tho past 18 yoars.
1hanks a|so to 1ooroo| od|tors 0avo Kansas, E||on lo||ock and V|ko V|||or tor tho|r od|t|ng
oxport|so and tho|r dod|cat|on to |ong-torm, narrat|vo journa||sm.
Kon Wo||s, author, boor oxport and od|tor oxtraord|na|ro, ho|pod concoptua||zo l|ch|stan ovor
a tow co|d onos at |oxhounds. |o workod t|ro|oss|y as my agont, adv|sor and proposa| od|tor to
mako tho book happon. 1ohn Vahanoy and Ann|k la|argo (now at 3|oomsbury) ho|pod rot|no
my |doas |nto a cohos|vo book and kopt mo on doad||no (a|most).
Voro than 100 woa|thy |nd|v|dua|s gavo mo tho ono th|ng tho|r monoy can't buy: tho|r t|mo. Ed
3az|not, 1|m and Edra 3||xsoth, loto and |||ary Vussor, Goorgo C|out|or and 1|ttany 3padatora,
|rank 3ut|or, lon loro|man, Chr|s 1ay|or, lh|||p and 0onna 3orbor, 1arod lo||s, 1|m G|||, Ky|o
C|rc|o and tho °k|ds' trom l|| woro among thoso k|nd onough to ontrust mo w|th tho|r stor|os. l
hopo l havo roprosontod thom ta|r|y and accurato|y.
1hanks a|so to Vary 3tarkoy tor |ott|ng mo |nto 3ut|or 3oot Camp tor two wooks, V|chao|
3onnonto|dt tor a||ow|ng mo to attond a 1|gor 21 moot|ng, and 0oug |rooman and loo |ausnor
tor |ott|ng mo como to ono ot tho|r woa|th-oducat|on som|nars.
Arthur Konn|cko|| and Gorhard |r|os ot tho |odora| losorvo ho|pod mo crunch tho numbors on
tho m||||ona|ro popu|at|ons, and luss A|an lr|nco and 3poctrom prov|dod mo w|th tho|r cop|ous
rosoarch.
larry lngrass|a and Adam 3ryant havo boon |oya| tr|onds, montors and adv|sors throughout my
caroor, ovon attor thoy wont to work tor °tho compot|t|on.' 1hoy |nsp|ro mo ovory day to bo a
bottor roportor and storyto||or. 1amos |. Ottaway 1r. has ho|pod toach mo tho va|uo ot
pors|stonco and porspoct|vo |n journa||sm, and l w||| m|ss h|s prosonco at 0ow 1onos.
Er|c Andorson, a truo journa||st at hoart, was my gu|do to a|| th|ngs Co|orado and mado sovora|
|mprovomonts to tho manuscr|pt. Kon 3rown a|so spont hours por|ng ovor my t|rst dratt and
g|v|ng mo h|s oxport od|t.
3tophon Vart|ros taught mo about tho oconom|cs ot woa|th and g|oba| cap|ta| t|ows |n a way
that ovon l cou|d undorstand (and |t l d|dn't, |t's not h|s tau|t). 1hanks a|so to la|rd lond|oton tor
h|s |ns|ghts |nto woa|th-poor|ng and tho h|story ot woa|th.
1o a|| my tr|onds who havo to|oratod my absonco tor tho past yoar, l hopo l can mako |t up to
you. l am ospoc|a||y gratotu| to lork and Varguor|to ||xon tor tho|r gonoros|ty, w|sdom and koon
|ns|ghts |nto tho chang|ng charactor ot woa|th. 1hoy havo shown mo tho truo moan|ng ot what
Edmund 3urko ca||od °tho unbought graco ot ||to.'
Vost ot a||, l'd ||ko to thank my tam||y-Vom, 0ad, Kath|, lat|a, 3otty, and a|| tho oxtondod
c|an, tor tho|r support ovor tho yoars.
1ho porson who workod hardost on th|s book (othor than mo) |s my w|to, lobocca. Ovor tho
past yoar, sho has kopt our ||vos togothor, sacr|t|cod count|oss wookonds and tam||y vacat|ons
and takon caro ot our daughtor-a|| wh||o ho|d|ng down ono ot tho most domand|ng jobs |n tho
wor|d. 1h|s book |s tru|y tor hor.
||na||y, thanks to ||tt|o Amo||a, whoso sm||os at tho ond ot ovory day mado mo too| ||ko tho
r|chost man on oarth.


About the Author

lO3El1 |lAlK |s a son|or spoc|a| wr|tor at 7bo ¼o|| 5troot 1ooroo|, whoro ho wr|tos a wook|y
co|umn and da||y b|og ca||od 1ho Woa|th loport. |o has boon w|th 7bo 1ooroo| tor 18 yoars, w|th
post|ngs |n At|anta, london, 3|ngaporo and low York. |o was part ot a toam ot roportors that
won an Ovorsoas lross C|ub award |n 1008 tor |ts covorago ot dovo|op|ng oconom|os.
|o ||vos |n low York w|th h|s w|to and daughtor.


Footnotes

1o roturn to tho corroaµonding toxt, cIick on tho rotoronco numbor or "Roturn to toxt."

11
¯
3omo ot tho to||ow|ng namos havo boon changod to protoct tho |dont|t|os ot tho k|ds and tho|r
tam|||os.
loturn to toxt.

Copyr|ght t 2007 by lobort l. |rank

A|| r|ghts rosorvod.
lub||shod |n tho Un|tod 3tatos by Crown lub||shors,
an |mpr|nt ot tho Crown lub||sh|ng Group,
a d|v|s|on ot landom |ouso, lnc., low York.
www.crownpub||sh|ng.com

Crown |s a tradomark and tho Crown co|ophon |s a rog|storod tradomark ot landom |ouso, lnc.

l|brary ot Congross Cata|og|ng-|n-lub||cat|on 0ata
|rank, lobort l.
l|ch|stan : a journoy through tho Amor|can woa|th boom and tho ||vos ot tho now r|ch / lobort l. |rank.-1st od.
lnc|udos b|b||ograph|ca| rotoroncos and |ndox.
1. Woa|th-Un|tod 3tatos. 2. l|ch poop|o-Un|tod 3tatos.8. V||||ona|ros-Un|tod 3tatos. l. 1|t|o.
|C110.W4|78 2007
80b.b'2840078-dc22 2000101042

ol33l: 078-0-807-40020-8

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