Lives of the Super Rich

I found this piece from CNBC on lives of the super rich to be quite interesting. A few selected quotes to give you a flavor for what it's about:

When most of us need a new car we take a drive to the local dealer. When Durham looks for an automobile he flies to Europe.

“I had a nail in the tire [of an expensive car]," he said. "It cost $22,000. Then I got another nail in it. And so I had to change the same tire twice.”

Many of the cars in Durham’s collection are worth between $1.5 million and $2.5 million. In total, he has over 70 cars, about 20 of which are housed on each level of his garage.

Durham grew up in a middle-class family — a typical background for the Super Rich. Today he lives a life of opulence in which money, or the lack of it, is rarely a concern. His main residence is a 30,000-square-foot, eight-bedroom home with a pool, two state-of-the-art kitchens, three bars, an exercise room, home theater and about 20 televisions, including two in his bathroom mirror.

The divorced father of four makes frequent use of a private jet that can take him, on very short notice, wherever he’d like to go. A few times a year he flies to Miami, where he keeps his four-bedroom, 100-foot yacht. The maintenance of this $6 million yacht runs Durham $5,000 a month — just for docking fees. That’s a steep bill, but for Durham it’s all a part of the game.

For him and many like him, making money when you don’t need any more, becomes a way to keep score in life.

“I don't think anybody can sit there and say, you know, 'I need another billion dollars,'" he said. "Does another billion dollars help Warren Buffet? No. He doesn't need it to live on. He can probably make it on the first 50. But why does he keep going? Because it's a challenge. And I think that that's really what making money is about. After you get to a certain level where you're basic needs are paid for. The rest of it is not necessary."

I have two opposite feelings on this issue:

1. Good for him. He's living the "American dream", something many people are striving for. He's worked hard, made it, and is now enjoying the fruit of his labor.

2. What a waste. Certainly some luxuries are reasonable -- he's earned them -- but isn't this over the top? How many people could a few of those cars or even the boat maintenance fees feed? There's no mention of charity in his life -- maybe that's because it's a piece about the excess of riches. Then again, maybe he's not very charitable. What a shame.

So, what do you think about these two perspectives? Which one do you think of when you read the quotes above?

Comments

[1WineDude]

I'm not one to pass too much judgment. I own 7 bass guitars, many of them very expensive. But I use them all frequently, get a lot of enjoyment out of them, and give back some of that enjoyment to others (hopefully!) when I perform.

I also have been known to spend more on wine then the average non-wine-geek would consider prudent.

So - I guess it comes down to what you're willing to pay vs. the relative enjoyment you get out of it, vs. also helping others (again, a relative amount).

Cheers!

[Joshua Raines]

I was like you I kind of had thoughts of both of those. Almost all people who are as rich as you are talking about give to a charity. Whether or not they do it for the tax write offs or not is irrelevant. But most do. I know a few people in these types of situations although not quite as extravagant, they are still very well of and don't have to worry about money ever again.

I think the scale of the ultra-rich is hard to grasp. For example, the person in the story sure sounds rich, but he is worth "only" $75 Million. He's not even a .1 Billionaire!

[t3ch]

Hello fellow bassist! /waves to 1WineDude

I don't think anyone can really say anything unless they're also that wealthy. I'm sure I'd probably have a ridiculous garage full of nice cars too. I like having things. I would like to think I'd be pretty charitable ( even though I have no doubt I would), but I can't say for sure since I'm not in that position.

You also have to remember the disconnect from reality people like this experience. It may just be a part of the game... Bill Gates is a pretty rare specimen. Granted, he kept plenty to live cozily, but more often than not it becomes me-me-me. Which really, with that much money, would be hard not to.

[tom]

Agreed... what a waste... and no mention whatsoever of charity.

Plus... the guy is only worth $75 Million. I realize that $75 Million is a TON of money, but it seems that he's spending money like a billionaire, at least to me.

[Kevin]

I guess if you earn it you should enjoy it, but you're right - at some point, how much use can you really get out of a yacht in a different state?

Personally, I can't see myself ever living an extravagant life like this. It's just not me. Sure I would be a nicer (bigger) house and new car - but I would get a lot of joy out of donating some of that wealth to people who really need it.

[Todd]

I think there is no question he gives to charity for the tax benefits at a minimum. This feature was about his wealth not his charity. I saw this before and thought $5,000/mo. for docking fees was outrageous. But then as comparison if your net worth was $500k that $5,000 is equivalent to $33.33. Wow! At first glance it sounds like he is really wasteful but it is truly all relative.

[Liz]

I think the guy should do whatever he wants with the money he has made, but I also agree with you, FMF, about how many children he could feed with those excesses. That is always my first thought. He even says himself how after your basic needs are met, the rest is not necessary. It sort of sickens me to think of people all over the world suffering so much while people like this guy spend exorbitant amounts on outrageous luxuries, even though he is completely entitled to do so. No doubt in my mind whatsoever that if I had money like that (or even much less) I would spend a great deal on giving to those less fortunate to feed and educate them instead of collecting unnecessary things. But that's just how I was raised.

[Jen]

He may be rich, but he couldn't make his marriage work. And how is his relationship with his four kids, when he's always on the go, travelling?

If you're going to keep score in life, maybe you ought to start with family.

[Matt H]

It's not like other people are poor because of him. In fact, whenever people make that much money (without stealing it or otherwise doing anything unethical), they've almost certainly done more to improve human welfare than they could by giving that same amount of money away.

[Catherine]

Those boat maintenance fees do feed people. Since he pumps $5K regularly into the Miami economy, he's keeping somebody employed. At $60K annually, a worker (or perhaps more than one) is in a home, feeding his family, paying taxes and contributing to society. I think that commerce is always preferable to charity -- not that I'm assuming he doesn't also give.

[Todd]

Matt/Catherine,

Great comments. It is easy for people to see a guy making a ton of money and say he is selfish, greedy and wasteful. I would agree though that he is wealthy because he has created an enterprise that is employing people and driving the economy in some way. He is also spending a ton of that money which is going back to other people who are also working to earn it. Hard to call that wasteful.

Jen - there are many low income or average income people with broken marriages too. To me, its hard to draw a relationship between his wealth and his marriage. Not to say that being a workaholic isn't going to impact your family life.

[Bad_Brad]

Forrest Gump's mom was right. There's only so much money a person needs in his/her lifetime, the rest is just for showing off. I make very good money and I'm very blessed, although my family is not anywhere near this level of wealth. But I've spoken with my wife about it, and if I ever make, say, VP at my company, we've agreed that there is an income level above and beyond which every incremental dollar we earn will go to our Church or some charity.

I am a business guy, so I know all about the hard work and capitalism and free market arguments regarding wealth and I don't disagree with them. However, I do believe that the wealthy have a moral obligation to give back. With almost no exceptions, a wealthy person could not have become wealthy without favorable circumstances in his/her life (living in a country that is safe and stable politically, having educational opportunities, having enough food to eat and clean water to drink, being taught various values, etc). The wealthy person cannot create those circumstances on his/her own. Bill Gates, Warren Buffet, those guys understand that and therefore they are giving back.

[Jen]

Todd, I agree that there is no definable link between his money and his family life. But when your attitude is "making money when you don’t need any more, becomes a way to keep score in life.", I think it's fair to judge you on the quality of that life. I tend to think his scorecard is broken.

[Todd]

Jen - I agree at some level. Keeping score in "life" is probably skewed. If he said keeping score in the "game" that would be more gounded I think.

That is always interesting to me. Money just happens to be the way to measure his success because he is a business man. To use an example, if this guy spent as much time training for the olympics or the tour de france and his measure of success was winning gold medals or races most people wouldn't find an issue with it. Because we are talking about money, people tend to criticize. He is right. After your basic needs are met, the rest is a game because we don't need it to survive. Unfortunately, there are people for which their basic needs are not met.

["Mo" Money]

I didn't get from the article how he made his fortune. But I think we bash the business people way too much. If he is an honest business man, then he deserves what he has. If he is smart he will give back, but the article didn't go into that. So there is much we do not know about him except how he spends his money. God bless him.

[Andy]

Give back? The term is give. He earned everything he has. No one has given him his fortune. So he cannot give it back.

Society has taken plenty from him in the way of taxes to cover any benefit he has received by growing up in the United States.

[Avin]

I think it's very dangerous to call the way anyone spends money like this "a waste".

If you drive a car, you could ride a bike instead. If you eat anything but noodles, you could be wasting that margin. It's easy to point out waste in the spending of someone who makes a lot more than us.

[The Shark Investor]

There is definitely something wrong in the way the economy works. Sure, people who are smart, work hard, and create goods for the words deserve to be rich. But is it right someone to have private jets while others dream for a cup of rice per day? He may be 100 times smarter than them and worked 100 times harder, be he is definitely not 1,000,000,000 times smarter. But that's how the world works. Unfortunately the other big alternative (communism) has proven to be even worse.