Jogging is very beneficial. It's good for your legs and your feet. It's also very good for the ground. It makes it feel needed
-- Charles M. Schulz
Saturday, November 23, 2013
Saturday quote
Jogging is very beneficial. It's good for your legs and your feet. It's also very good for the ground. It makes it feel needed
-- Charles M. Schulz
Friday, November 22, 2013
Friday Quote
I understand the inventor of the bagpipes was inspired when he saw a man carrying an indignant, asthmatic pig under his arm. Unfortunately, the man-made sound never equalled the purity of sound made by the pig
-- Alfred Hitchcock
Cellphones on planes
NO NO NO NO NO NO!!!!
The Washington Post has just zapped the news to me that it is being considered that cellphones should be used on planes.
On planes while they are up in the air with a lot of helpless passengers on board.
Right now, I respect people who turn off their phones when they sit down at a restaurant table, and do the same when invited to dinner at my house. They have probably formed the suspicion that they won't be sitting at a table with me again if they don't.
But now it looks as if flying in the US is going to be a journey into hell.
The nation’s top telecom regulator will propose allowing passengers to make cell phone calls and use their data plans while on an airplane, officials said Thursday.
The proposed rule change by the Federal Communications Commission would allow phone use once a plane reaches 10,000 feet. Restrictions would still be in place during takeoffs and landings.
The agency’s commission is set to discuss the proposal in their upcoming December meeting. The new rule has the backing of Tom Wheeler, the FCC’s new chairman, who was sworn in just weeks ago.
“Modern technologies can deliver mobile services in the air safely and reliably, and the time is right to review our outdated and restrictive rules,” he said in a statement. “I look forward to working closely with my colleagues, the FAA, and the airline industry on this review of new mobile opportunities for consumers.”
Wheeler, a Democrat, would need the support of the majority of the five-member commission, which has three Democrats and two Republicans.
The commission could vote on the matter after a public commenting period. The proposal does not need congressional approval.
The FCC made a similar proposal in 2004, but it was dropped three years later in the face of opposition from flight attendants and other groups worried about the distractions of constantly ringing phones and people talking on their devices while others are trying to sleep.
Judging by the stream of furious comments, the public still feels the same way. A sampling:
For the love of god, no. Just, no. Flying can be difficult enough without sitting next to someone for four hours while he yammers on: "So now we're over Idaho. . . . Yeah, it's cloudy. . . . Oh, there's a river!. . . . I guess we'll be on time. . . . More clouds. . . ."
Ugh. That annoying person yelling into his phone at the gate is about to be the annoying person yelling into his phone for 5 hours on the flight to LA.
U.S. should also give us a right "to punch someone annoying on the face" during flights if they bother us.
"opposition from flight attendants and other groups"
Yeah, other groups ... like passengers!!!
Terrible idea. Allowing broader use of electronic devices was great, but this has a real possibility of leading to confrontations in the cabin. Multiply the annoyance you feel at hearing that inane conversation on the bus for 15 minutes times the length of a cross country flight. Things will get ugly
There is an anecdote in Dostoevsky about a man and a woman riding in a 19th century coach. The man is smoking a cigar, and the woman has a lap-dog. The woman reaches over, grabs the cigar, and throws it out the window. So what does the gentleman do? You guessed it! As I said, this is from Dostoevsky, but it is truly worthy of W.C. Fields
NO PHONE CALLS! You want to see air rage on steroids? Bring it on!
The Washington Post has just zapped the news to me that it is being considered that cellphones should be used on planes.
On planes while they are up in the air with a lot of helpless passengers on board.
Right now, I respect people who turn off their phones when they sit down at a restaurant table, and do the same when invited to dinner at my house. They have probably formed the suspicion that they won't be sitting at a table with me again if they don't.
But now it looks as if flying in the US is going to be a journey into hell.
The nation’s top telecom regulator will propose allowing passengers to make cell phone calls and use their data plans while on an airplane, officials said Thursday.
The proposed rule change by the Federal Communications Commission would allow phone use once a plane reaches 10,000 feet. Restrictions would still be in place during takeoffs and landings.
The agency’s commission is set to discuss the proposal in their upcoming December meeting. The new rule has the backing of Tom Wheeler, the FCC’s new chairman, who was sworn in just weeks ago.
“Modern technologies can deliver mobile services in the air safely and reliably, and the time is right to review our outdated and restrictive rules,” he said in a statement. “I look forward to working closely with my colleagues, the FAA, and the airline industry on this review of new mobile opportunities for consumers.”
Wheeler, a Democrat, would need the support of the majority of the five-member commission, which has three Democrats and two Republicans.
The commission could vote on the matter after a public commenting period. The proposal does not need congressional approval.
The FCC made a similar proposal in 2004, but it was dropped three years later in the face of opposition from flight attendants and other groups worried about the distractions of constantly ringing phones and people talking on their devices while others are trying to sleep.
Judging by the stream of furious comments, the public still feels the same way. A sampling:
For the love of god, no. Just, no. Flying can be difficult enough without sitting next to someone for four hours while he yammers on: "So now we're over Idaho. . . . Yeah, it's cloudy. . . . Oh, there's a river!. . . . I guess we'll be on time. . . . More clouds. . . ."
Ugh. That annoying person yelling into his phone at the gate is about to be the annoying person yelling into his phone for 5 hours on the flight to LA.
U.S. should also give us a right "to punch someone annoying on the face" during flights if they bother us.
"opposition from flight attendants and other groups"
Yeah, other groups ... like passengers!!!
Terrible idea. Allowing broader use of electronic devices was great, but this has a real possibility of leading to confrontations in the cabin. Multiply the annoyance you feel at hearing that inane conversation on the bus for 15 minutes times the length of a cross country flight. Things will get ugly
There is an anecdote in Dostoevsky about a man and a woman riding in a 19th century coach. The man is smoking a cigar, and the woman has a lap-dog. The woman reaches over, grabs the cigar, and throws it out the window. So what does the gentleman do? You guessed it! As I said, this is from Dostoevsky, but it is truly worthy of W.C. Fields
NO PHONE CALLS! You want to see air rage on steroids? Bring it on!
Fourth marriage
The local TV station was interviewing an 80-year-old lady because she had just gotten married for the fourth time.
The interviewer asked her questions about her life, about what it felt like to be marrying again at 80, and then about her new husband's occupation.
"He's a funeral director," she answered.
"Interesting," the newsman thought, then asked her if she wouldn't mind telling him a little about her first three husbands and what they did for a living.
She paused for a few moments, needing time to reflect on all those years. After a short time, a smile came to her face and she revealed that she had first married a banker when she was in her 20's, a circus ringmaster when in her 40's, a preacher when in her 60's, and now - in her 80's - a funeral director.
The interviewer looked at her, quite astonished, and asked why she had married four men with such diverse careers.
Another pause, another smile.
The interviewer asked her questions about her life, about what it felt like to be marrying again at 80, and then about her new husband's occupation.
"He's a funeral director," she answered.
"Interesting," the newsman thought, then asked her if she wouldn't mind telling him a little about her first three husbands and what they did for a living.
She paused for a few moments, needing time to reflect on all those years. After a short time, a smile came to her face and she revealed that she had first married a banker when she was in her 20's, a circus ringmaster when in her 40's, a preacher when in her 60's, and now - in her 80's - a funeral director.
The interviewer looked at her, quite astonished, and asked why she had married four men with such diverse careers.
Another pause, another smile.
"One for the money, two for the show, three to get ready, and four to go."
Thursday, November 21, 2013
Thursday quotes
Don't think. Thinking is the enemy of creativity. It's self-conscious, and anything self-conscious is lousy. You can't try to do things. You simply must do things.
-- Ray Bradbury
My thought is me; that is why I cannot stop thinking. I exist because I think I cannot keep from thinking
-- Jean-Paul Sartre
Plans for defence of the Medway, 1596
Old words can be fascinating...
"Orders for safe-guarding of the Medway. A ketch is to ride without Sheerness, and on
sight of any enemy's vessel, to give notice to the Aid which rides within
Sheerness.
So, what is a sconce? Well, according to the OED, it is a small fort
"Orders for safe-guarding of the Medway. A ketch is to ride without Sheerness, and on
sight of any enemy's vessel, to give notice to the Aid which rides within
Sheerness.
"The Aid is then to prepare to
meet the enemy, and to fire three guns, whereupon a pinnace riding at Oakamness
is to speed up the river towards Chatham, giving alarm all the way up, to
Chatham, Upnor Castle, the beacons of
Chatham and Barrow Hill, and the four sconces and borders of the river on each
side.
"On this, the Bear, riding against
St. Mary's creek, is to shoot three pieces of ordnance to continue the alarm,
which the Mary Rose, riding against Rochester Bridge, is to take up, and shoot
three pieces of ordnance, on which all the country within hearing is to repair
to Chatham Church and Upnor Castle, on directions of the deputy lieutenants of
the shires.
"Those places that cannot be
warned by shots and beacons are to be warned by hoblers sent from Rochester by
the deputy lieutenants; the Mayor of Rochester is to send notice to Sir John
Leveson, Thos. Walsingham, Mr. Style, Mr. Matoir of Maidenstone, Mr. Lennard,
and Mr. Rivers, and each of these captains to give notice to the rest.
"With note on 12 Nov. that these five captains
with 1,080 men are to repair to Upnor Castle, and there be distributed in the
five ships next the chain; and that four others named are to [repair to Chatham
church, with 540 men more."
(p.305 - Com Eliz VOL CCLX. 1596 - Nov 10)
So, what is a sconce? Well, according to the OED, it is a small fort
A hobbler was not a higler, who was a seller of eggs. No, a hobbler was a man who looked after horses -- either military horses or horses that towed canal boats, according to that little god of the sky, google.
According to the Webster Unabridged Dictionary, a hobbler
(hobeler or hobelier) is "one who by his tenure was to maintain a horse
for military service; a kind of light horseman in the Middle Ages who was
mounted on a hobby" (hobby being a horse).
With thanks to Bud Warren
Chinese baby talk boosts Kiwi dollar
Good lord, who would have thought that babies that are not even born yet could have impact on anything as mundane as currency?
But the Wall Street Journal reports that the New Zealand dollar has risen on prospects of cradles filling up in China.
The New Zealand dollar, one of the globe's top-performing currencies this year amid a booming economy and high interest rates, is getting a baby bump.
The currency, known as the kiwi, is up 1.2% against the U.S. dollar since Thursday, before China's surprise announcement that it will loosen its policy of one child per family.
Some investors are betting that New Zealand, home to the world's biggest milk exporter, is well positioned to benefit from a baby boom in the world's most populous nation. More Chinese milk demand would translate into more demand for the kiwi from Chinese importers, which money managers anticipate will boost the currency's value.
"New Zealand exports milk products, which is what China needs and wants," said Anders Faergemann, who helps manage $69.1 billion at PineBridge Investments and is buying the New Zealand dollar. Mr. Faergemann said that it is likely that a relaxation of China's one-child policy will result in more demand for New Zealand's products over time.
"If you can export more to a growing country the size of China, your currency is in a good spot," he said.
The kiwi wasn't the only asset to benefit from the policy change: In China, shares of baby-formula producers, piano makers and tutoring companies jumped following the news.
Piano makers? Good lord, again.
But the Wall Street Journal reports that the New Zealand dollar has risen on prospects of cradles filling up in China.
The currency, known as the kiwi, is up 1.2% against the U.S. dollar since Thursday, before China's surprise announcement that it will loosen its policy of one child per family.
Some investors are betting that New Zealand, home to the world's biggest milk exporter, is well positioned to benefit from a baby boom in the world's most populous nation. More Chinese milk demand would translate into more demand for the kiwi from Chinese importers, which money managers anticipate will boost the currency's value.
"New Zealand exports milk products, which is what China needs and wants," said Anders Faergemann, who helps manage $69.1 billion at PineBridge Investments and is buying the New Zealand dollar. Mr. Faergemann said that it is likely that a relaxation of China's one-child policy will result in more demand for New Zealand's products over time.
"If you can export more to a growing country the size of China, your currency is in a good spot," he said.
Piano makers? Good lord, again.
Wednesday, November 20, 2013
Wednesday quotes
A lady's imagination is very rapid; it jumps from admiration to love, from love to matrimony in a moment
-- Jane Austen
If I read a book and it makes my whole body so cold no fire can ever warm me, I know that is poetry
-- Emily Dickinson
Tuesday, November 19, 2013
Billionaires? Oh, spare me.
I wonder how many have given anything substantial to the Filipinos?
Ten things that billionaires will not admit to ...
WE ARE JUST SO OBSCENELY GREEDY
Quentin Fottrell"
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, which has a collection of hideaways around the world to choose from. The 225-acre Katafanga Island in Fiji in the South Pacific is currently on the market with a price tag of $20 million.
In the movie “The Social Network,” a semi-fictionalized account of the founding of Facebook (FB), Justin Timberlake, in the role of Napster founder and early Facebook backer Sean Parker, tells the Mark Zuckerberg character, “A million dollars isn’t cool. You know what’s cool? A billion dollars.” (Parker has, in interviews, denied he ever said that in real life.) Indeed, those who have worked with billionaires say that, to be considered rich among their elite, a million doesn’t cut it. Billionaires and millionaires may sit side-by-side on boards, Martiak says, but handshakes and smiles aside, billionaires don’t see millionaires as their equals.
3. “This is basically a boys’ club.”
Women are making some progress: There are 138 women among the 1,426 people on Forbes’s Billionaires List this year, up from 104 last year.
Still, more than 90% of billionaires are men. Perhaps that should come as no surprise, considering that just 4% of CEO positions at Fortune 1,000 companies are held by women — a strikingly small proportion considering that 18% of members of Congress and 30% of U.S. District Court Judges are female.
Luckily, rising through the corporate ranks isn’t the only or even the most common way to become a billionaire. The richest woman in the world — Liliane Bettencourt, 91, who has $30 billion — inherited her fortune from her father, who founded the cosmetics giant L’Oréal. And the late Rosalia Mera, one of the 20 richest women in the world, was self-made: Although she dropped out of school at age 11, she co-founded the global clothing chain Zara (she died in August).
A more novel theory for the boys’ club: For some young male billionaires, testosterone may have given them their start. “The coolest thing about Mark Zuckerberg and Eduardo Saverin is that they never did it for the money,” says Ben Mezrich, author of “The Accidental Billionaires” and “Bringing Down the House,” which became the sources for “The Social Network.” “The main impetus for them at the very beginning was to meet girls. It turned into a billion dollars.”
4.“I may be smart, but I got a head start.”
America’s billionaires tend to also be among its most well-educated, recent research suggests. In “Investigating America’s Elite,” published in the journal Intelligence, Duke University psychologist Jonathan Wai found that billionaires are more likely than CEOs, judges, senators or House members to have attended colleges with the most rigorous admission standards
But were they born smart, or born lucky? Wai says it’s a bit of both. Most billionaires — including Bill Gates, America’s richest man, and son of a successful lawyer — were born into a upper middle-class backgrounds, he says. The father of billionaires David and Charles Koch was Fred C. Koch, the founder of Wood River Oil and Refining Company, today known as Koch Industries; granted, the Koch brothers turned the company into the multi-billion dollar conglomerate it is today. S. Robson Walton, chairman of Wal-Mart, is the son of Sam Walton, the founder of Wal-Mart. “The first trick to becoming a billionaire is being born a millionaire,” says author Mezrich.
In fact, plenty of billionaires were not born with financial advantages. Sheldon Adelson, 80, CEO of the Las Vegas Sands casino and resort, was born in a working-class neighborhood in Boston; his father was a cab driver. Stephen Bisciotti, 53, the majority shareholder of the Baltimore Ravens, worked his way through school; his father died when he was eight. Lynn Tilton, 54, founder of private equity firm Patriarch Partners, grew up in the Bronx, and was a single mother working 100 hours on Wall Street in her 20s. “I can’t even remember my 20s,” she says, “they were so dark.”
5.“It’s like Monopoly money.”
Billionaire Donald Trump offered to build a $100 million ballroom for the White House in 2011, but that’s nothing compared with what some of the mega-rich have actually spent without blinking. In 2010, Russian oligarch Roman Abramovich purchased his latest yacht — the 536-foot-long “Eclipse”— for a reported price of about $1 billion. In 2009, Saudi prince Alwaleed bin Talal bin Abdul Aziz al-Saud bought an Airbus A380 for $400 million. In 2006, Mexican businessman David Martinez bought a Jackson Pollock classic drip painting from music producer David Geffen for $140 million. And in 2012, real estate mogul Stan Kroenke bought a 240,000-acre Montana ranch for more than $132 million.
But in some cases, the lavish spending is all relative. Oprah Winfrey, 59, was reportedly recently in the market for a $38,000 Tom Ford handbag, but she’s worth an estimated $2.9 billion, according to Forbes — so the handbag would cost just 0.001% of her wealth.
Indeed, “most billionaires can actually be very cheap,” says David Friedman of Wealth-X. Many have spent their lives trying to make a profit and doing accounting in their heads. “They’ll ask for the receipt in a restaurant and argue over 50 cents,” he says. “But then they’ll go buy a jet for $50 million.”
6. “What scares us? Divorce lawyers.”
Luckily, and perhaps not coincidentally, divorce is relatively rare among the moneyed set. Of the 84% of billionaires who are married, only 8% are divorced, according to a survey of the world’s billionaires published by Wealth-X earlier this month. That’s far lower than the U.S. divorce rate:
Some 40% to 50% of marriages overall end in divorce, according to the National Marriage Project at the University of Virginia.
Billionaire divorces can cost hundreds of millions of dollars and exact a heavy toll on the couple’s privacy, says Janet Lowe, author of books about biographies of several billionaires, including Berkshire Hathaway’s (BRK-A) Charlie Munger and Google co-founders Larry Page and Sergey Brin. The 2003 divorce between former General Electric head Jack Welch and his second wife Jane Welch, she says, is a prime example: Divorce paperwork filed in Connecticut revealed the couple’s high (and previously undisclosed) standard of living, and major newspapers throughout the U.S. publicized the details, focusing on the generous benefits Welch received as a retired GE exec. The Securities and Exchange Commission then launched a formal inquiry into Welch’s compensation agreement, and Welch voluntarily gave up his GE retirement package, valued at $2.5 million a year.
“In this environment, I don’t want a great company with the highest integrity dragged into a public fight because of my divorce proceedings,” Welch wrote in a column for The Wall Street Journal at the time, explaining his decision.
7.“We didn’t get rich investing in stocks.”
If you want to be a billionaire and you’re starting from scratch, don’t bet on the stock market, some advisers say. Sure, an individual who happens to invest at the bottom of the market and sell at the top can do quite well. In general, “if you beat stock indexes by 1% consistently over 20 years, you’re a massive superstar,” says Martin Fridson, author of “How to Be a Billionaire: Proven Strategies From the Titans of Wealth.” But at that rate, it’ll be a long time before the average investor becomes a billionaire. 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.
Many billionaires — Steve Jobs, Bill Gates, Mark Zuckerberg — instead made their fortunes in start-ups, says Robert Klein, founder and president of Retirement Income Center, a retirement and income planning firm in Newport Beach, Calif. (Klein is also a MarketWatch RetireMentor) The founders of Twitter likewise became billionaires with their IPO earlier this month. “You’re far more likely to become a billionaire in Silicon Valley than on Wall Street”, says wealth strategist Martiak. “Wall Street becomes far more important later on when you’re preserving their wealth.”
8.“You say evading, we say avoiding.”
There’s no data on whether the ultrawealthy shirk their responsibility to pay taxes more often than the average citizen, but incidents involving billionaires certainly garner more media attention — presumably because of the vast sums involved. “A lot of billionaires try to avoid paying taxes,” says Friedman of Wealth-X. The latest to be named and shamed — and face jail time: Ty Warner, 69, CEO of Ty, the maker of stuffed Beanie Babies and worth an estimated $2.6 billion, according to Forbes. “I apologize for my conduct,” Warner told a U.S. District Court in Chicago in October. “I made a mistake. I’m fully responsible.” He owes the government $53.6 million for failing to file a report on foreign financial accounts, one of the largest offshore-account penalties ever.
The line certainly gets blurred between illegal tax evasion and lawful tax avoidance. For the most part, Martiak says, “no-one is deliberately or intentionally avoiding paying tax.” The very wealthy — billionaires included — also have the opportunity to pay a far smaller percentage of their income in taxes, since most of their income is from investments and, therefore, taxed at lower rates than wages and salary.
Around 25% of all millionaires — 94,500 taxpayers — pay a lower tax rate than 10.4 million moderate income tax payers, according to a 2012 report by the Congressional Research Service, a government agency that analyzes public policy data.
9. “My family hates me, loves my money.”
Spare a thought for Gina Rinehart, 59, Australia’s richest woman — whose children, John Hancock, 37, and Bianca Rinehart, 36, are suing her. They allege that she engaged in serious misconduct as trustee of the family’s multibillion-dollar trust by trying to delay the date when the trust’s beneficiaries — her four children — could access their money. (Gina Rinehart’s law firm, Corrs Chambers Westgarth, says she denies all wrongdoing and, in a statement released to the press, said she’s offering to give up her role as trustee to end the litigation.)
Not all family disputes are about money, however. Nor is it always the kids suing the parents: Financier T. Boone Pickens sued his son Michael in February for alleged defamation, libel, invasion of privacy, intentional infliction of distress and harmful access by computer, after Michael began writing about the family in a blog called “5 Days In Connecticut.” Collin Porterfield, an attorney representing Michael Pickens, says the case is being considered by Dallas County Court and no decision had been reached.
10. “King Lear taught me everything I know.”
Most billionaires have traditionally left their fortune to their offspring or brought them into the family business. Case in point: Three of Donald Trump’s children work in the family business and even appear on his reality TV show, “The Apprentice.” These days, however, more billionaires are taking a slightly different tack. At least 30 billionaires have chosen to sign the “Giving Pledge,” an initiative started in 2009 to encourage the ultrawealthy to give away half their wealth. (Warren Buffett has pledged to give away 99% of his wealth. He once told a television interviewer: “I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing.”)
Others who have made the pledge thus far include hotelier Barron Hilton, banker David Rockefeller, financier Ronald Perelman, Citigroup founder Sandy Weill and his wife, Joan, hedge-fund managers Julian Robertson Jr. and Jim Simons, private-equity financier David Rubenstein and “Star Wars” creator George Lucas. In fact, Lucas, 69, also sold off the bulk of his business empire last year, which some experts say will prevent a power struggle among his three adopted children after he’s gone.
Do good? Oh please ....
Ten things that billionaires will not admit to ...
WE ARE JUST SO OBSCENELY GREEDY
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, which has a collection of hideaways around the world to choose from. The 225-acre Katafanga Island in Fiji in the South Pacific is currently on the market with a price tag of $20 million.
In the movie “The Social Network,” a semi-fictionalized account of the founding of Facebook (FB), Justin Timberlake, in the role of Napster founder and early Facebook backer Sean Parker, tells the Mark Zuckerberg character, “A million dollars isn’t cool. You know what’s cool? A billion dollars.” (Parker has, in interviews, denied he ever said that in real life.) Indeed, those who have worked with billionaires say that, to be considered rich among their elite, a million doesn’t cut it. Billionaires and millionaires may sit side-by-side on boards, Martiak says, but handshakes and smiles aside, billionaires don’t see millionaires as their equals.
3. “This is basically a boys’ club.”
Women are making some progress: There are 138 women among the 1,426 people on Forbes’s Billionaires List this year, up from 104 last year.
Still, more than 90% of billionaires are men. Perhaps that should come as no surprise, considering that just 4% of CEO positions at Fortune 1,000 companies are held by women — a strikingly small proportion considering that 18% of members of Congress and 30% of U.S. District Court Judges are female.
Luckily, rising through the corporate ranks isn’t the only or even the most common way to become a billionaire. The richest woman in the world — Liliane Bettencourt, 91, who has $30 billion — inherited her fortune from her father, who founded the cosmetics giant L’Oréal. And the late Rosalia Mera, one of the 20 richest women in the world, was self-made: Although she dropped out of school at age 11, she co-founded the global clothing chain Zara (she died in August).
A more novel theory for the boys’ club: For some young male billionaires, testosterone may have given them their start. “The coolest thing about Mark Zuckerberg and Eduardo Saverin is that they never did it for the money,” says Ben Mezrich, author of “The Accidental Billionaires” and “Bringing Down the House,” which became the sources for “The Social Network.” “The main impetus for them at the very beginning was to meet girls. It turned into a billion dollars.”
4.“I may be smart, but I got a head start.”
America’s billionaires tend to also be among its most well-educated, recent research suggests. In “Investigating America’s Elite,” published in the journal Intelligence, Duke University psychologist Jonathan Wai found that billionaires are more likely than CEOs, judges, senators or House members to have attended colleges with the most rigorous admission standards
But were they born smart, or born lucky? Wai says it’s a bit of both. Most billionaires — including Bill Gates, America’s richest man, and son of a successful lawyer — were born into a upper middle-class backgrounds, he says. The father of billionaires David and Charles Koch was Fred C. Koch, the founder of Wood River Oil and Refining Company, today known as Koch Industries; granted, the Koch brothers turned the company into the multi-billion dollar conglomerate it is today. S. Robson Walton, chairman of Wal-Mart, is the son of Sam Walton, the founder of Wal-Mart. “The first trick to becoming a billionaire is being born a millionaire,” says author Mezrich.
In fact, plenty of billionaires were not born with financial advantages. Sheldon Adelson, 80, CEO of the Las Vegas Sands casino and resort, was born in a working-class neighborhood in Boston; his father was a cab driver. Stephen Bisciotti, 53, the majority shareholder of the Baltimore Ravens, worked his way through school; his father died when he was eight. Lynn Tilton, 54, founder of private equity firm Patriarch Partners, grew up in the Bronx, and was a single mother working 100 hours on Wall Street in her 20s. “I can’t even remember my 20s,” she says, “they were so dark.”
5.“It’s like Monopoly money.”
Billionaire Donald Trump offered to build a $100 million ballroom for the White House in 2011, but that’s nothing compared with what some of the mega-rich have actually spent without blinking. In 2010, Russian oligarch Roman Abramovich purchased his latest yacht — the 536-foot-long “Eclipse”— for a reported price of about $1 billion. In 2009, Saudi prince Alwaleed bin Talal bin Abdul Aziz al-Saud bought an Airbus A380 for $400 million. In 2006, Mexican businessman David Martinez bought a Jackson Pollock classic drip painting from music producer David Geffen for $140 million. And in 2012, real estate mogul Stan Kroenke bought a 240,000-acre Montana ranch for more than $132 million.
But in some cases, the lavish spending is all relative. Oprah Winfrey, 59, was reportedly recently in the market for a $38,000 Tom Ford handbag, but she’s worth an estimated $2.9 billion, according to Forbes — so the handbag would cost just 0.001% of her wealth.
Indeed, “most billionaires can actually be very cheap,” says David Friedman of Wealth-X. Many have spent their lives trying to make a profit and doing accounting in their heads. “They’ll ask for the receipt in a restaurant and argue over 50 cents,” he says. “But then they’ll go buy a jet for $50 million.”
6. “What scares us? Divorce lawyers.”
Luckily, and perhaps not coincidentally, divorce is relatively rare among the moneyed set. Of the 84% of billionaires who are married, only 8% are divorced, according to a survey of the world’s billionaires published by Wealth-X earlier this month. That’s far lower than the U.S. divorce rate:
Some 40% to 50% of marriages overall end in divorce, according to the National Marriage Project at the University of Virginia.
Billionaire divorces can cost hundreds of millions of dollars and exact a heavy toll on the couple’s privacy, says Janet Lowe, author of books about biographies of several billionaires, including Berkshire Hathaway’s (BRK-A) Charlie Munger and Google co-founders Larry Page and Sergey Brin. The 2003 divorce between former General Electric head Jack Welch and his second wife Jane Welch, she says, is a prime example: Divorce paperwork filed in Connecticut revealed the couple’s high (and previously undisclosed) standard of living, and major newspapers throughout the U.S. publicized the details, focusing on the generous benefits Welch received as a retired GE exec. The Securities and Exchange Commission then launched a formal inquiry into Welch’s compensation agreement, and Welch voluntarily gave up his GE retirement package, valued at $2.5 million a year.
“In this environment, I don’t want a great company with the highest integrity dragged into a public fight because of my divorce proceedings,” Welch wrote in a column for The Wall Street Journal at the time, explaining his decision.
7.“We didn’t get rich investing in stocks.”
If you want to be a billionaire and you’re starting from scratch, don’t bet on the stock market, some advisers say. Sure, an individual who happens to invest at the bottom of the market and sell at the top can do quite well. In general, “if you beat stock indexes by 1% consistently over 20 years, you’re a massive superstar,” says Martin Fridson, author of “How to Be a Billionaire: Proven Strategies From the Titans of Wealth.” But at that rate, it’ll be a long time before the average investor becomes a billionaire. 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.
Many billionaires — Steve Jobs, Bill Gates, Mark Zuckerberg — instead made their fortunes in start-ups, says Robert Klein, founder and president of Retirement Income Center, a retirement and income planning firm in Newport Beach, Calif. (Klein is also a MarketWatch RetireMentor) The founders of Twitter likewise became billionaires with their IPO earlier this month. “You’re far more likely to become a billionaire in Silicon Valley than on Wall Street”, says wealth strategist Martiak. “Wall Street becomes far more important later on when you’re preserving their wealth.”
8.“You say evading, we say avoiding.”
There’s no data on whether the ultrawealthy shirk their responsibility to pay taxes more often than the average citizen, but incidents involving billionaires certainly garner more media attention — presumably because of the vast sums involved. “A lot of billionaires try to avoid paying taxes,” says Friedman of Wealth-X. The latest to be named and shamed — and face jail time: Ty Warner, 69, CEO of Ty, the maker of stuffed Beanie Babies and worth an estimated $2.6 billion, according to Forbes. “I apologize for my conduct,” Warner told a U.S. District Court in Chicago in October. “I made a mistake. I’m fully responsible.” He owes the government $53.6 million for failing to file a report on foreign financial accounts, one of the largest offshore-account penalties ever.
The line certainly gets blurred between illegal tax evasion and lawful tax avoidance. For the most part, Martiak says, “no-one is deliberately or intentionally avoiding paying tax.” The very wealthy — billionaires included — also have the opportunity to pay a far smaller percentage of their income in taxes, since most of their income is from investments and, therefore, taxed at lower rates than wages and salary.
Around 25% of all millionaires — 94,500 taxpayers — pay a lower tax rate than 10.4 million moderate income tax payers, according to a 2012 report by the Congressional Research Service, a government agency that analyzes public policy data.
9. “My family hates me, loves my money.”
Spare a thought for Gina Rinehart, 59, Australia’s richest woman — whose children, John Hancock, 37, and Bianca Rinehart, 36, are suing her. They allege that she engaged in serious misconduct as trustee of the family’s multibillion-dollar trust by trying to delay the date when the trust’s beneficiaries — her four children — could access their money. (Gina Rinehart’s law firm, Corrs Chambers Westgarth, says she denies all wrongdoing and, in a statement released to the press, said she’s offering to give up her role as trustee to end the litigation.)
Not all family disputes are about money, however. Nor is it always the kids suing the parents: Financier T. Boone Pickens sued his son Michael in February for alleged defamation, libel, invasion of privacy, intentional infliction of distress and harmful access by computer, after Michael began writing about the family in a blog called “5 Days In Connecticut.” Collin Porterfield, an attorney representing Michael Pickens, says the case is being considered by Dallas County Court and no decision had been reached.
10. “King Lear taught me everything I know.”
Most billionaires have traditionally left their fortune to their offspring or brought them into the family business. Case in point: Three of Donald Trump’s children work in the family business and even appear on his reality TV show, “The Apprentice.” These days, however, more billionaires are taking a slightly different tack. At least 30 billionaires have chosen to sign the “Giving Pledge,” an initiative started in 2009 to encourage the ultrawealthy to give away half their wealth. (Warren Buffett has pledged to give away 99% of his wealth. He once told a television interviewer: “I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing.”)
Others who have made the pledge thus far include hotelier Barron Hilton, banker David Rockefeller, financier Ronald Perelman, Citigroup founder Sandy Weill and his wife, Joan, hedge-fund managers Julian Robertson Jr. and Jim Simons, private-equity financier David Rubenstein and “Star Wars” creator George Lucas. In fact, Lucas, 69, also sold off the bulk of his business empire last year, which some experts say will prevent a power struggle among his three adopted children after he’s gone.
For many billionaires, their legacy becomes more important than their money, says Martin Fridson, author of “How to be a Billionaire: Proven Strategies from the Titans of Wealth.” Although they obviously didn’t become billionaires by accident, he says many billionaires mellow with age:
“They’ll usually tell you, ‘I never set out to be a billionaire, I set out to do good.’”Do good? Oh please ....
Tuesday quote
You know when they have a fishing show on TV? they catch the fish and then let it go. They don't want to eat the fish, they just want to make is late for something
-- Mitch Hedberg
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