10 things billionaires won’t tell you - Yahoo Singapore Finance


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10 things billionaires won’t tell you
By Quentin Fottrell | MarketWatch – Mon, Nov 18, 2013 8:40 PM SGT

Quentin Fottrell"/>

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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” says Ben Mezrich.426 people on Forbes’s Billionaires List this year. granted. Robson Walton. The richest woman in the world — Liliane Bettencourt. 53. And the late Rosalia Mera. District Court Judges are female. “The coolest thing about Mark Zuckerberg and Eduardo Saverin is that they never did it for the money. in the role of Napster founder and early Facebook backer Sean Parker.Yahoo Singapore Finance http://sg. he says. senators or House members to have attended colleges with the most rigorous admission standards But were they born smart. 80. the majority shareholder of the Baltimore Ravens. In the movie “The Social Network. A more novel theory for the boys’ club: For some young male billionaires.” America’s billionaires tend to also be among its most well-educated.10 things billionaires won’t tell you .” (Parker has.” “The main impetus for them at the very beginning was to meet girls. denied he ever said that in real life.S. tells the Mark Zuckerberg character. 91. founder of private equity firm Patriarch Partners. Russian oligarch Roman Abramovich purchased his latest yacht — the 536-foot-long “Eclipse”— for a reported price of about $1 billion. the founder of Wood River Oil and Refining Company. 54. a million doesn’t cut it. “The first trick to becoming a billionaire is being born a millionaire. Still. is the son of Sam Walton. recent research suggests. his father died when he was eight. Luckily.” published in the journal Intelligence. “A million dollars isn’t cool. was born in a working-class neighborhood in Boston. Sheldon Adelson. grew up in the Bronx.000 companies are held by women — a strikingly small proportion considering that 18% of members of Congress and 30% of U. “This is basically a boys’ club. Billionaires and millionaires may sit side-by-side on boards.com/news/10-things-billionaires-won-t-124. billionaires don’t see millionaires as their equals.” which became the sources for “The Social Network. plenty of billionaires were not born with financial advantages.” 4. In 2009.” says author Mezrich.” Billionaire Donald Trump offered to build a $100 million ballroom for the White House in 2011. Stephen Bisciotti. “they were so dark. which has a collection of hideaways around the world to choose from. Perhaps that should come as no surprise. his father was a cab driver.” 5. Most billionaires — including Bill Gates.” Women are making some progress: There are 138 women among the 1. S. 3. The 225-acre Katafanga Island in Fiji in the South Pacific is currently on the market with a price tag of $20 million. or born lucky? Wai says it’s a bit of both. author of “The Accidental Billionaires” and “Bringing Down the House. judges.. It turned into a billion dollars. was self-made: Although she dropped out of school at age 11. who has $30 billion — inherited her fortune from her father. but that’s nothing compared with what some of the mega-rich have actually spent without blinking. rising through the corporate ranks isn’t the only or even the most common way to become a billionaire. 2 of 5 20/11/2013 12:18 AM . In 2010. “I can’t even remember my 20s. the Koch brothers turned the company into the multi-billion dollar conglomerate it is today. up from 104 last year. The father of billionaires David and Charles Koch was Fred C. one of the 20 richest women in the world.finance. and was a single mother working 100 hours on Wall Street in her 20s. the founder of Wal-Mart.. today known as Koch Industries.” a semi-fictionalized account of the founding of Facebook (FB). You know what’s cool? A billion dollars. she co-founded the global clothing chain Zara (she died in August). Duke University psychologist Jonathan Wai found that billionaires are more likely than CEOs. In “Investigating America’s Elite. to be considered rich among their elite. In fact. America’s richest man. considering that just 4% of CEO positions at Fortune 1.” she says.yahoo. CEO of the Las Vegas Sands casino and resort. in interviews.“It’s like Monopoly money. more than 90% of billionaires are men. who founded the cosmetics giant L’Oréal. worked his way through school. Martiak says. but handshakes and smiles aside.) Indeed. those who have worked with billionaires say that. but I got a head start. Lynn Tilton. Justin Timberlake. chairman of Wal-Mart. testosterone may have given them their start. and son of a successful lawyer — were born into a upper middle-class backgrounds. Koch.“I may be smart.

yahoo.finance. publicized the details. The latest to be named and shamed — and face jail time: Ty Warner. “What scares us? Divorce lawyers. (Klein is also a MarketWatch RetireMentor) The founders of Twitter likewise became billionaires with their IPO earlier this month.” 6. District Court in Chicago in October. and Welch voluntarily gave up his GE retirement package. the maker of stuffed Beanie Babies and worth an estimated $2. and major newspapers throughout the U. is a prime example: Divorce paperwork filed in Connecticut revealed the couple’s high (and previously undisclosed) standard of living. “A lot of billionaires try to avoid paying taxes. Oprah Winfrey. But in some cases. “Wall Street becomes far more important later on when you’re preserving their wealth. “You’re far more likely to become a billionaire in Silicon Valley than on Wall Street”. I don’t want a great company with the highest integrity dragged into a public fight because of my divorce proceedings.” he says.” says David Friedman of Wealth-X. In general. Many billionaires — Steve Jobs. says Robert Klein. a retirement and income planning firm in Newport Beach. according to the National Marriage Project at the University of Virginia.. 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. only 8% are divorced. divorce is relatively rare among the moneyed set. real estate mogul Stan Kroenke bought a 240.10 things billionaires won’t tell you . “They’ll ask for the receipt in a restaurant and argue over 50 cents.” Luckily. Many have spent their lives trying to make a profit and doing accounting in their heads. “In this environment. And in 2012. 59. according to Forbes — so the handbag would cost just 0. In 2006. the lavish spending is all relative.9 billion. says Janet Lowe. according to Forbes.000-acre Montana ranch for more than $132 million. The Securities and Exchange Commission then launched a formal inquiry into Welch’s compensation agreement. 69.” Warner told a U. Calif. don’t bet on the stock market. divorce rate: Some 40% to 50% of marriages overall end in divorce. 7. author of books about biographies of several billionaires. founder and president of Retirement Income Center. but she’s worth an estimated $2. explaining his decision.S. but incidents involving billionaires certainly garner more media attention — presumably because of the vast sums involved. some advisers say. including Berkshire Hathaway’s (BRK-A) Charlie Munger and Google co-founders Larry Page and Sergey Brin. Of the 84% of billionaires who are married. it’ll be a long time before the average investor becomes a billionaire.” Welch wrote in a column for The Wall Street Journal at the time.” There’s no data on whether the ultrawealthy shirk their responsibility to pay taxes more often than the average citizen.001% of her wealth. CEO of Ty.S. was reportedly recently in the market for a $38. “I made a 3 of 5 20/11/2013 12:18 AM . an individual who happens to invest at the bottom of the market and sell at the top can do quite well.” says Friedman of Wealth-X. we say avoiding.000 Tom Ford handbag.com/news/10-things-billionaires-won-t-124. Bill Gates.S.” says Martin Fridson. Saudi prince Alwaleed bin Talal bin Abdul Aziz al-Saud bought an Airbus A380 for $400 million.6 billion.” If you want to be a billionaire and you’re starting from scratch. Mark Zuckerberg — instead made their fortunes in start-ups. author of “How to Be a Billionaire: Proven Strategies From the Titans of Wealth. and perhaps not coincidentally.5 million a year.Yahoo Singapore Finance http://sg. The 2003 divorce between former General Electric head Jack Welch and his second wife Jane Welch. “if you beat stock indexes by 1% consistently over 20 years. according to a survey of the world’s billionaires published by Wealth-X earlier this month.“You say evading.” 8. Sure. Mexican businessman David Martinez bought a Jackson Pollock classic drip painting from music producer David Geffen for $140 million.. you’re a massive superstar. says wealth strategist Martiak. Indeed. valued at $2. focusing on the generous benefits Welch received as a retired GE exec. “most billionaires can actually be very cheap. Billionaire divorces can cost hundreds of millions of dollars and exact a heavy toll on the couple’s privacy. “I apologize for my conduct. “But then they’ll go buy a jet for $50 million.“We didn’t get rich investing in stocks.” But at that rate. That’s far lower than the U. she says.

which some experts say will prevent a power struggle among his three adopted children after he’s gone. however. 37. intentional infliction of distress and harmful access by computer. in a statement released to the press. 59. also sold off the bulk of his business empire last year. (Warren Buffett has pledged to give away 99% of his wealth. libel. says Martin Fridson. Boone Pickens sued his son Michael in February for alleged defamation. mistake.” an initiative started in 2009 to encourage the ultrawealthy to give away half their wealth. he says many billionaires mellow with age: “They’ll usually tell you. Australia’s richest woman — whose children. 69.” Although they obviously didn’t become billionaires by accident.6 million for failing to file a report on foreign financial accounts. “King Lear taught me everything I know.10 things billionaires won’t tell you . Citigroup founder Sandy Weill and his wife. you're on your own 4 of 5 20/11/2013 12:18 AM . author of “How to be a Billionaire: Proven Strategies from the Titans of Wealth. John Hancock. according to a 2012 report by the Congressional Research Service. an attorney representing Michael Pickens. The line certainly gets blurred between illegal tax evasion and lawful tax avoidance.. since most of their income is from investments and. after Michael began writing about the family in a blog called “5 Days In Connecticut. blessing. and Bianca Rinehart. Case in point: Three of Donald Trump’s children work in the family business and even appear on his reality TV show. I’m fully responsible. Nor is it always the kids suing the parents: Financier T. 10. Martiak says.4 million moderate income tax payers. says she denies all wrongdoing and.” Most billionaires have traditionally left their fortune to their offspring or brought them into the family business. ‘I never set out to be a billionaire. banker David Rockefeller. invasion of privacy. private-equity financier David Rubenstein and “Star Wars” creator George Lucas. For many billionaires. (Gina Rinehart’s law firm.” He owes the government $53.Yahoo Singapore Finance http://sg.C.” The very wealthy — billionaires included — also have the opportunity to pay a far smaller percentage of their income in taxes.” Spare a thought for Gina Rinehart. therefore. 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. Lucas. said she’s offering to give up her role as trustee to end the litigation.” These days. loves my money.finance.yahoo. 9. a government agency that analyzes public policy data. financier Ronald Perelman.’” More From MarketWatch Bitcoin flies above $600 on hopes of D. 36. more billionaires are taking a slightly different tack. and Jim Simons.”) Others who have made the pledge thus far include hotelier Barron Hilton.) Not all family disputes are about money..com/news/10-things-billionaires-won-t-124. “no-one is deliberately or intentionally avoiding paying tax. but not so much that they would feel like doing nothing.” Collin Porterfield.500 taxpayers — pay a lower tax rate than 10. “The Apprentice. Joan. however. Corrs Chambers Westgarth. are suing her. hedge-fund managers Julian Robertson Jr. China buzz For long-term care. one of the largest offshore-account penalties ever. “My family hates me. taxed at lower rates than wages and salary. says the case is being considered by Dallas County Court and no decision had been reached. For the most part. I set out to do good. Around 25% of all millionaires — 94. At least 30 billionaires have chosen to sign the “Giving Pledge. In fact. He once told a television interviewer: “I want to give my kids just enough so that they would feel that they could do anything. their legacy becomes more important than their money.

.. though doubts remain 5 of 5 20/11/2013 12:18 AM .Yahoo Singapore Finance http://sg. China reforms get market cheers.yahoo.10 things billionaires won’t tell you .finance.com/news/10-things-billionaires-won-t-124.

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