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Lifestyles of the rich

Marketplace Staff Jan 23, 2009

Lifestyles of the rich

Marketplace Staff Jan 23, 2009


Tess Vigeland: We learned from the Daily Beast this week that former Merrill Lynch CEO John Thain spent $87,000 on a rug to furnish his office last year. I say former because this week Thain resigned amid headlines about more seismic losses at Merrill, which is now owned by Bank of America. So he’s losing that rug in his office, but no word on whether he’s postponing a reported redecorating of his Park Avenue apartment and mansion in suburban New York.

About 1 percent of Americans own more than a third of the country’s wealth. If you’re like author Ryan D’Agostino, you probably wonder as you’re driving by those mansions how they got all their money. D’Agostino decided the best way to find out was to drive up to the biggest houses he could find all over the country, knock on the door and ask. His book is called “Rich Like Them.”

So you really just walked up and rang the doorbell?

Ryan D’Agostino: I did, I did. I can’t believe I did either, actually.

Vigeland: It’s just amazing to me that you walked up to these homes. I mean, what was the reaction? Did people think you were a stalker?

D’Agostino: Oh yeah, oh yeah. What was amazing to me was no one asked for anything more than a business card.

Vigeland: Really?

D’Agostino: Yeah.

Vigeland: So not only are they humble; they are trusting.

D’Agostino: Trusting would be one word for it.

Vigeland: Well, not to put too fine a point on it Ryan, but I wonder whether you might be finding that nobody really wants to hear about rich people right now?

D’Agostino: Well, no one wants to hear about a certain kind of rich people — maybe the ones who make the headlines — but I think that this is a time when people are perhaps losing hope, losing any kind of inspiration they maybe had when it comes to money and finances and getting ahead, but almost everyone I spoke with had started off not wealthy, made their own money by an idea they had or they had worked for 30 years and somehow risen to the top of some corporation, and they were proud and the fact that they were proud of their fortune and had worked so hard and so carefully to make it actually makes them the perfect people to weather a market like we’re seeing right now because when you really drill down a little bit, they were very smart about every move they made.

Vigeland: How were they smart? A year ago did they sell all their stocks and move into bonds or is it something that over the years they just been very conservative?

D’Agostino: I think it’s the way they’ve put it together and maybe some examples is the best way to illustrate it. One woman in Silicon Valley who is one of the leading venture capitalists out there said, “You know, if I were to show you our investment portfolio, our monthly finances, you’d be bored to tears.” I think I was expecting all the people behind those gates and those big houses on the water to be these sort of brash, take-no-prisoners and there was certainly some of that, but for the most part what they were was people who did not put themselves on a pedestal. The work that they put in and the people they were willing to talk to and the nights of taking out your own garbage when you’re starting up your business; they certainly were not too proud to do that and that’s something I saw a lot of.

Vigeland: One of the chapters in your book is titled “Luck Doesn’t Exist.” Is this the old “work hard enough and it’ll happen” argument, because if so, a lot of us who work really hard are wondering when we’re going to become millionaires?

D’Agostino: Right, I was wondering the same thing. That’s part of it, but there’s another piece of it, which is resourcefulness. What could I do that not everyone else is doing? I met a stock broker, retired stock broker named Bob, and I said, “You know, there’s a lot of stock brokers out there Bob. How did you rise above the millions of stock brokers you’ve worked with over the years?” And he said, well, when I was first starting out it was not a good time in the stock market, so he started selling these basically short-term municipal debt which basically just was a very, very safe thing that people could do. You get 7.5 percent and it was just a place park some money. So while everyone else in his office was trying to sell stock, he would call these people and say, “Look, I have these safe things here for a while that you should really think about. Invest with me now; I’m not going to make any money on it, but you’ll be thankful.” What he was trying to do was sort of accumulate clients for later when things picked up. And sure enough when things picked up, he gets a call one day from a guy who owns half the coal mines in the south and the guy’s on his private plane and said, “OK Bob, you did me good. Let’s start buying some stock.” And they went literally through the alphabet and placed an order in the millions of dollars. And suddenly everyone in Bob’s office wasn’t making fun of him anymore.

Vigeland: So given the fact that so many people are in such economic turmoil right now, what lesson do you think they can take away from all these very wealthy people. Self-made or not, it’s hard to imagine that you can get yourself to that point.

D’Agostino: Well, a few of the people I spoke with I have called recently, the ones I kind of hit it off with, and I said A: Are you still rich and B: What’s your advice right now? What struck me was that every single one of them said, “My advice is the same.” An example is a woman out near San Francisco named Edith who has an art gallery. She said when you run into trouble of any kind, whether it’s trouble in your own business or the world financial markets are collapsing — either one, don’t panic. There are certain things that we cannot control, but when you’re running your business, don’t start doing stupid things because of a headline. Forget about that and control the things you can control. So that’s what I’m hoping these people will inspire our readers to do.

Vigeland: Ryan D’Agostino is the author of “Rich Like Them: My Door-to-Door Search for the Secrets of Wealth in America’s Richest Neighborhoods,” out this week. Thanks so much Ryan.

D’Agostino: Thanks. It was a pleasure.

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