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Wed, 20 Nov 2013, 0:17 SGT - Singapore Markets open in 8 hrs and 43 mins
10 things billionaires won’t tell you
By Quentin Fottrell | MarketWatch – Mon, Nov 18, 2013 8:40 PM SGT
Bloomberg 1.“We just get richer and richer.” In 2013, the wealth of the world’s billionaires reached a record high — helped by 200 newcomers like Facebook founder Mark Zuckerberg. The 2013 Forbes Billionaires List names 1,426 billionaires with an aggregate net worth of $5.4 trillion, up a whopping 17% from $4.6 trillion last year. And that doesn’t include royalty or, um, dictators. Of those, some 442 make their home in the U.S. (there are 386 in the Asia-Pacific region, 366 in Europe, 129 in the rest of the Americas and 103 in the Middle East and Africa combined, according to Forbes). The average net worth of each U.S. billionaire: $10.8 billion, up from $9.1 billion last year, according to a separate survey released this month by private wealth consultancy Wealth-X and UBS. Meanwhile, the rest of the country’s net worth has actually fallen since the Great Recession — and has yet to recover. Adjusting for inflation, real net worth per U.S. household hovered at $652,449 by the end of June 2013, according to the Federal Reserve, or about 95% of its 2007 level of $684,662. If that seems inordinately high, that’s because the majority of U.S. households carry their net worth in their home. That average also is inflated by, well, millionaires and billionaires: In fact, around half of U.S. households have a net worth of no more than $83,000, a Pew Research Center’s analysis of 2010 Federal Reserve survey found.) And while ordinary Americans have seen their net worth fall since the recession, billionaires saw their net worth rise by over 50% from $3.5 trillion in 2007. Why are billionaires on the rise? “Daily record highs in the financial markets have caused surging net worth for the richest 1%,” says Mark Martiak, a wealth strategist at Premier Financial Advisors in New York. Commercial and residential real estate values have also been rebounding, he says. “Combined with low inflation and low interest rates for borrowing, this big picture presents a favorable backdrop for the wealthy, in spite of higher taxes, stubbornly high unemployment, the potential Fed tapering and wrangling in Washington,” Martiak says. 2.“One million — or 10 — ain’t what it used to be.” In a time when the median price of a home in Manhattan is just over $1 million, according to real-estate website Trulia, experts say that being a millionaire no longer means that you’re rich. It could just as easily mean you own your own a home in New York or San Francisco, or have a vacation home on the Jersey Shore. “The word now doesn’t have as much power,” says Charles Merlot, author of “The Billionaire’s Apprentice: How 21 Billionaires Used Drive, Luck and Risk to Achieve Colossal Success.” “In the eyes of the public, even $10 million is considered at the low end of high-net-worth.” For the global elite, keeping up with the Joneses, Gateses and Buffetts can require, at bare minimum, an eight-figure annual income. The online listing site Jameslist.com, a Craigslist for the super-rich, lists helicopters for a snip at $7 million-plus. (Failing that, one could always quietly take a share in one through a site like FlexJet.) For those who believe a Bentley is too — well, obvious — the fastest and most expensive production car in the world is the $2.4 million Bugatti Veyron Super Sport car. Billionaires who don’t want (or like) their neighbors can check out PrivateIslandsOnline.com,
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to be considered rich among their elite.yahoo. Robson Walton. founder of private equity firm Patriarch Partners. up from 104 last year. tells the Mark Zuckerberg character. Russian oligarch Roman Abramovich purchased his latest yacht — the 536-foot-long “Eclipse”— for a reported price of about $1 billion. but that’s nothing compared with what some of the mega-rich have actually spent without blinking. And the late Rosalia Mera. but handshakes and smiles aside. CEO of the Las Vegas Sands casino and resort. Billionaires and millionaires may sit side-by-side on boards. in interviews. and was a single mother working 100 hours on Wall Street in her 20s. in the role of Napster founder and early Facebook backer Sean Parker. judges. one of the 20 richest women in the world. Martiak says. 54. Justin Timberlake. 3. which has a collection of hideaways around the world to choose from. chairman of Wal-Mart. rising through the corporate ranks isn’t the only or even the most common way to become a billionaire. “A million dollars isn’t cool.finance.“It’s like Monopoly money. but I got a head start. she co-founded the global clothing chain Zara (she died in August). grew up in the Bronx. 80. America’s richest man. You know what’s cool? A billion dollars. “they were so dark..Yahoo Singapore Finance http://sg. “The coolest thing about Mark Zuckerberg and Eduardo Saverin is that they never did it for the money.. plenty of billionaires were not born with financial advantages.” America’s billionaires tend to also be among its most well-educated. Sheldon Adelson. The richest woman in the world — Liliane Bettencourt. In “Investigating America’s Elite. is the son of Sam Walton.S. A more novel theory for the boys’ club: For some young male billionaires.” which became the sources for “The Social Network. granted. Koch.” Women are making some progress: There are 138 women among the 1. It turned into a billion dollars.000 companies are held by women — a strikingly small proportion considering that 18% of members of Congress and 30% of U.) Indeed.” she says. 91. or born lucky? Wai says it’s a bit of both. a million doesn’t cut it. he says.426 people on Forbes’s Billionaires List this year. billionaires don’t see millionaires as their equals. Luckily.” (Parker has. Still. the majority shareholder of the Baltimore Ravens. the founder of Wal-Mart. his father was a cab driver.” 4. more than 90% of billionaires are men. the founder of Wood River Oil and Refining Company.” a semi-fictionalized account of the founding of Facebook (FB). author of “The Accidental Billionaires” and “Bringing Down the House. considering that just 4% of CEO positions at Fortune 1. worked his way through school. In 2009. District Court Judges are female. testosterone may have given them their start. Most billionaires — including Bill Gates.10 things billionaires won’t tell you . The 225-acre Katafanga Island in Fiji in the South Pacific is currently on the market with a price tag of $20 million. “The first trick to becoming a billionaire is being born a millionaire.” “The main impetus for them at the very beginning was to meet girls.“I may be smart. In the movie “The Social Network. today known as Koch Industries. Duke University psychologist Jonathan Wai found that billionaires are more likely than CEOs. 2 of 5 20/11/2013 12:18 AM . recent research suggests. Perhaps that should come as no surprise. was self-made: Although she dropped out of school at age 11.com/news/10-things-billionaires-won-t-124. was born in a working-class neighborhood in Boston. and son of a successful lawyer — were born into a upper middle-class backgrounds. senators or House members to have attended colleges with the most rigorous admission standards But were they born smart. S. the Koch brothers turned the company into the multi-billion dollar conglomerate it is today. “I can’t even remember my 20s. his father died when he was eight.” says author Mezrich. who founded the cosmetics giant L’Oréal. Stephen Bisciotti.” says Ben Mezrich. In 2010. who has $30 billion — inherited her fortune from her father. denied he ever said that in real life. In fact. Lynn Tilton. those who have worked with billionaires say that. “This is basically a boys’ club.” published in the journal Intelligence. The father of billionaires David and Charles Koch was Fred C.” Billionaire Donald Trump offered to build a $100 million ballroom for the White House in 2011.” 5. 53.
according to Forbes. says Janet Lowe. it’ll be a long time before the average investor becomes a billionaire. In general. says wealth strategist Martiak.” Welch wrote in a column for The Wall Street Journal at the time. valued at $2.” 6. Bill Gates. Saudi prince Alwaleed bin Talal bin Abdul Aziz al-Saud bought an Airbus A380 for $400 million.” If you want to be a billionaire and you’re starting from scratch. but incidents involving billionaires certainly garner more media attention — presumably because of the vast sums involved. according to Forbes — so the handbag would cost just 0. CEO of Ty. In 2006. some advisers say. “You’re far more likely to become a billionaire in Silicon Valley than on Wall Street”. Billionaire divorces can cost hundreds of millions of dollars and exact a heavy toll on the couple’s privacy. divorce is relatively rare among the moneyed set. Here’s another way to look at it: If you earned 15% a year on your investments — an astronomical benchmark that almost nobody has consistently hit — you’d still have to start with about $65 million in order to wind up with $1 billion after 20 years. The 2003 divorce between former General Electric head Jack Welch and his second wife Jane Welch. “I apologize for my conduct.000 Tom Ford handbag.Yahoo Singapore Finance http://sg.“We didn’t get rich investing in stocks. That’s far lower than the U.” says Martin Fridson.10 things billionaires won’t tell you . a retirement and income planning firm in Newport Beach. real estate mogul Stan Kroenke bought a 240. 69.” Warner told a U. “most billionaires can actually be very cheap.001% of her wealth. “I made a 3 of 5 20/11/2013 12:18 AM . But in some cases.. divorce rate: Some 40% to 50% of marriages overall end in divorce.” There’s no data on whether the ultrawealthy shirk their responsibility to pay taxes more often than the average citizen. but she’s worth an estimated $2. you’re a massive superstar. “if you beat stock indexes by 1% consistently over 20 years. 59.finance. was reportedly recently in the market for a $38. publicized the details. 7. Of the 84% of billionaires who are married. “They’ll ask for the receipt in a restaurant and argue over 50 cents..S.S. author of books about biographies of several billionaires. and major newspapers throughout the U.9 billion. Many billionaires — Steve Jobs.” But at that rate. we say avoiding. says Robert Klein. “A lot of billionaires try to avoid paying taxes.S. District Court in Chicago in October. I don’t want a great company with the highest integrity dragged into a public fight because of my divorce proceedings. the maker of stuffed Beanie Babies and worth an estimated $2. founder and president of Retirement Income Center. “But then they’ll go buy a jet for $50 million. Mark Zuckerberg — instead made their fortunes in start-ups. Mexican businessman David Martinez bought a Jackson Pollock classic drip painting from music producer David Geffen for $140 million. (Klein is also a MarketWatch RetireMentor) The founders of Twitter likewise became billionaires with their IPO earlier this month. Many have spent their lives trying to make a profit and doing accounting in their heads. according to the National Marriage Project at the University of Virginia. and Welch voluntarily gave up his GE retirement package.“You say evading.” says Friedman of Wealth-X.” 8. she says. The latest to be named and shamed — and face jail time: Ty Warner.000-acre Montana ranch for more than $132 million. the lavish spending is all relative. Sure. Indeed.6 billion. Calif.5 million a year. “What scares us? Divorce lawyers. Oprah Winfrey. “Wall Street becomes far more important later on when you’re preserving their wealth. And in 2012. focusing on the generous benefits Welch received as a retired GE exec. an individual who happens to invest at the bottom of the market and sell at the top can do quite well. including Berkshire Hathaway’s (BRK-A) Charlie Munger and Google co-founders Larry Page and Sergey Brin. “In this environment. only 8% are divorced. author of “How to Be a Billionaire: Proven Strategies From the Titans of Wealth.com/news/10-things-billionaires-won-t-124. explaining his decision.yahoo. don’t bet on the stock market. according to a survey of the world’s billionaires published by Wealth-X earlier this month. is a prime example: Divorce paperwork filed in Connecticut revealed the couple’s high (and previously undisclosed) standard of living.” Luckily. and perhaps not coincidentally.” he says. The Securities and Exchange Commission then launched a formal inquiry into Welch’s compensation agreement.” says David Friedman of Wealth-X.
“King Lear taught me everything I know.Yahoo Singapore Finance http://sg. (Gina Rinehart’s law firm. libel. 69. private-equity financier David Rubenstein and “Star Wars” creator George Lucas. a government agency that analyzes public policy data.” Although they obviously didn’t become billionaires by accident. but not so much that they would feel like doing nothing. 10.” Spare a thought for Gina Rinehart.500 taxpayers — pay a lower tax rate than 10. which some experts say will prevent a power struggle among his three adopted children after he’s gone.6 million for failing to file a report on foreign financial accounts.) Not all family disputes are about money.” an initiative started in 2009 to encourage the ultrawealthy to give away half their wealth.” Collin Porterfield. 9. Boone Pickens sued his son Michael in February for alleged defamation. For the most part. intentional infliction of distress and harmful access by computer.. Lucas. however. He once told a television interviewer: “I want to give my kids just enough so that they would feel that they could do anything. mistake. 59.” These days. blessing. For many billionaires. They allege that she engaged in serious misconduct as trustee of the family’s multibilliondollar trust by trying to delay the date when the trust’s beneficiaries — her four children — could access their money. their legacy becomes more important than their money. an attorney representing Michael Pickens. I’m fully responsible. according to a 2012 report by the Congressional Research Service. taxed at lower rates than wages and salary. “The Apprentice. in a statement released to the press. therefore. one of the largest offshore-account penalties ever. says Martin Fridson. banker David Rockefeller.yahoo. 37.com/news/10-things-billionaires-won-t-124. 36. (Warren Buffett has pledged to give away 99% of his wealth.” The very wealthy — billionaires included — also have the opportunity to pay a far smaller percentage of their income in taxes. more billionaires are taking a slightly different tack. however. also sold off the bulk of his business empire last year. Martiak says. author of “How to be a Billionaire: Proven Strategies from the Titans of Wealth. invasion of privacy.10 things billionaires won’t tell you . Nor is it always the kids suing the parents: Financier T. Case in point: Three of Donald Trump’s children work in the family business and even appear on his reality TV show. “My family hates me. since most of their income is from investments and. Australia’s richest woman — whose children. after Michael began writing about the family in a blog called “5 Days In Connecticut. and Jim Simons. he says many billionaires mellow with age: “They’ll usually tell you. says the case is being considered by Dallas County Court and no decision had been reached. Joan.4 million moderate income tax payers.” Most billionaires have traditionally left their fortune to their offspring or brought them into the family business.C.. says she denies all wrongdoing and. and Bianca Rinehart.finance. In fact.”) Others who have made the pledge thus far include hotelier Barron Hilton. The line certainly gets blurred between illegal tax evasion and lawful tax avoidance.” He owes the government $53. ‘I never set out to be a billionaire. At least 30 billionaires have chosen to sign the “Giving Pledge.’” More From MarketWatch Bitcoin flies above $600 on hopes of D. you're on your own 4 of 5 20/11/2013 12:18 AM . “no-one is deliberately or intentionally avoiding paying tax. are suing her. Citigroup founder Sandy Weill and his wife. loves my money. John Hancock. China buzz For long-term care. Around 25% of all millionaires — 94. I set out to do good. hedge-fund managers Julian Robertson Jr. financier Ronald Perelman. said she’s offering to give up her role as trustee to end the litigation. Corrs Chambers Westgarth.
10 things billionaires won’t tell you .Yahoo Singapore Finance http://sg. though doubts remain 5 of 5 20/11/2013 12:18 AM .finance.yahoo. China reforms get market cheers.com/news/10-things-billionaires-won-t-124...
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