There is conventional wisdom that most millionaires inherited their money and that is so far off the mark as to be laughable. Of course nobodies laughing when there overarching narrative for November is to create a country where the masses determine at what level earnings should be consider offensive greed and consequentially punished by the majority. Just as there is a shift toward intolerance for religion in America there is a shift toward pure hatred for successful businesses and individuals. People that pay zero federal taxes get to be angry at someone that paid three million dollars and also gave another three million to charity.
But, what's really intriguing is how many examples are right before our eyes that prove wealth, real wealth, isn't guaranteed to last forever. The political fact is President Obama is going after families that make more than $250,000 a year- in nobody's book is that great wealth- but keeps calling out billionaires. Real wealth starts in the millions but money that can be passed along after paying taxes, expenses and extravagances has to be north of $10.0 million. A kid whose grandmother leaves her a million bucks may strut around like they're going to be rich but they are only entering a trap if that money isn't used properly.
Unless you are talking wealth nearer to $100.0 million three generations removed will only hear about how rich the family used to be. In most cases it would still be squandered after a couple of generations because people that don't earn the money rarely treat it with reverence. Ironically, the same people that squawk about fair taxes and greed would probably waste any financial windfall from the confiscation of wealth from others before it could reach their own offspring.
We see it all the time with lottery winners and divorcees that blow millions of dollars. Checkout the drama at Albemarle.
Patricia Kluge and the Richest Divorce Settlement
In my 20s I began to devour magazines and books on success, wealth and politics. I read so many each month but my top three were Time, Forbes and Architectural Digest. I studied the Forbes 400 list to learn about background and big breaks. In 1981 the richest man in the world was John Kluge at $5.0 billion. His biography is an inspiring tale of self-made success.
He was married several times and his third wife, Patricia, made out with the then largest divorce settlement in history. In addition to a boatload of cash she gained control of Albemarle (see photo).
A soft porn actress whose starred in The Nine Acres of Nakedness ended up with hundreds of acres in the most beautiful part of Virginia. Having been around success Patricia decided to give it a try herself. Her main focus was on a vineyard that peaked with selling 10,000 out of 30,000 bottles. There were more mortgages and leverage and now it's all gone. Donald Trump has the vineyard, owns the front yard to the mansion and most of the back yard and is trying to get the rest on the cheap. At some point he probably gets it all and makes it the best winery- golf course- tourist attraction east of Pebble Beach.
The only gift greater than passing along a silver spoon is to pass it along with instructions.
I'm not sure how Patricia Kluge is fixed on cash but very few people have lost that much money in that short a period of time.
I do give her credit for being ambitious. Success in business isn't a slam dunk. I have less respect for those that lost fortunes because they spent like crazy or couldn't control addictions. Two of the greatest heavyweight fighters ever, Mike Tyson and Evander Holyfield, have lost a combined half billion dollars. Some of that "loss" went to massive taxes which most athletes say they don't mind paying while Barack Obama is president but in the end know it's too much. (I have yet to interview an athlete that didn't say on air they felt okay with taxes and yet know every single one of them has people looking into how to lower their rate.)
The real tragedy and head-scratcher for me is there are so many people that broke out to earn a lot of money and will not be able help their own children. Of course some are just jerks like Latrell Sprewell who turned down $21.0 million three year contract offer because it wasn't enough to "feed his children." Since then, out of basketball, Latrell has run his yacht aground (it's been auctioned), lost a couple homes to foreclosure and is barred from seeing his own children. Probably should have taken the money.
The moral of the story is people should focus on creating opportunities for themselves and their children rather than looking in someone else's pocket. And those people that stand on the shoulders of others that had nothing owe it to their ancestors as well as future generations to grab the brass ring and blaze a path for the future. The only gift greater than passing along a silver spoon is to pass it along with instructions. On the other hand there are few greater sins than squandering millions and leaving your children with no springboard. I'm not talking millions but the kind of dough that pays for law school or a restaurant or the operation for a rare disease contracted by a grandchild.
In this era of hate- the- rich many find the squanderers noble victims and those that avoided all the fun (you have to admit blowing millions makes for some fun nights) and focusing on the right thing as villains.
I've heard lots of politicians like Nancy Pelosi complain that rich people don't spend enough money so they're hurting the economy. The thing she doesn't say is those people got rich by saving their money in the first place. In her world Lenny Dykstra is a hero and the household earnings $350,000 a year and saving $20,000 a year for college is mean-spirited and limiting food stamp distribution. The crazy thing is when the carnage is smoldering it will only be super rich guys like Donald Trump that will be able to scoop in and pick up the pieces. I'm not mad at the Donald...he isn't the one launching a mindless war on success.
NEW TIME Today, at 9:30 AM PT: Get the Market Movements in Advance: William's Edge Webinar for January 30th, 2014 | John Ransom
NEW TIME Today, at 9:30 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for January 26th, 2014 | John Ransom