2. Rich IIntroduction II Six Eras of the American Rich (1920-2009) IIIWealthology™ Topline IVConclusion © Culture Planning LLC

3. Rich I Introduction

4. Historical sweep of the American rich helps puts today’s story in context -Backstory of our fascination with the wealthy elite -Valuable perspective on today’s economic turmoil

5. I Introduction Use sources’ definitions of “rich” and “wealthy” rather than set arbitrary level of net worth or income - Terms have constantly shifted over past century

6. I Introduction Trajectory of the American rich not a straight line - Lots of twists and turns, ups and downs

7. I Introduction Democratization of the American upper class the biggest story -First mass affluent class in history -More people with more money than any other civilization

8. I Introduction Victory of the American rich has come at a cost - Loss of an identifiable wealth culture -Social signifiers of elitism (privilege, entitlement, discreetness, snobbery, noblesse oblige) virtually extinct -USA arguably a “poorer” place

9. I Introduction Almost complete triumph of New Money over Old -Lots of “rich” Americans, very few “wealthy” ones -Class now strictly a function of how many dollars one has versus background, family name, or other once important factors

10. I Introduction Other themes: -Love/hate relationship with rich -Mythology of the “self-made man” -Enduring power of the “millionaire” -Quest to crack the get-rich code -“Are the rich happier than the rest of us?”

11. Rich IISix Eras of the American Rich (1920-2009)

12. IISix Eras (1920-2009) Era #1: This Side of Paradise 1920-1929

13. Era #1: 1920-1929 World turned upside-down for American rich after WWI - Era of Gilded Age robber barons over as modern times create a much different kind of society

14. Era #1: 1920-1929 18th/19th century model of wealth borrowed from European aristocracy seen as anachronistic and musty - Less elitist “New Economy” emerges which opens door to new kind of American upper class

15. Era #1: 1920-1929 New Money begins to overtake Old - Easy credit -Stock market democratized -Mass consumption society emerging -Six times the number of millionaires in 1928 vs. 1923 (43,000 vs. 7,200)

16. Era #1: 1920-1929 Buying stock on margin makes many Americans rich on paper - Speculators ride on coattails of professional investors -$1 million no longer considered truly rich by 1929 -National phenomenon

17. Era #1: 1920-1929 American upper class redeemed -Unlike robber barons (who used “the methods of their time”), fortunes being made fair and square -Country as a whole getting richer

18. Era #1: 1920-1929 New American rich seen as “the millionaire next door” -Just rich vs. superrich -Judeo-Christian values -Solid work ethic -Fewer prodigal sons

19. Era #1: 1920-1929 “Society” expanded and diluted -Mrs. Astor’s “400” now 4000+ -Men mix business with socializing, usurping traditional role of women

20. Era #1: 1920-1929 American rich become more cosmopolitan -European royalty welcomed into American society mix -American heiresses swap fortunes for European titles

21. Era #1: 1920-1929 Youth culture rocks society’s boat -Far more spontaneous, hedonistic, and iconoclastic than were their parents -Rich young women driving, smoking, drinking, and canoodling

22. Era #1: 1920-1929 Those with real $ distance themselves from ordinary millionaires -200+ feet private yacht -Marble swimming pool (Hollywood tycoons) - Park Avenue duplex or triplex complete with (Prohibition-era) bar

23. Era #1: 1920-1929 Popular holiday gifts in 1929: -Baby grand piano; radio with all the bells and whistles; “motor attire”; smoking jackets; paisley robes; ermine, sable, and silver fox coats -Santa about to get a lot more stingy

24. IISix Eras (1920-2009) Era #2: Brother, Can You Spare a Dime 1930-1945

25. Era #2: 1930-1945 Depression and war years further erode Old Money - Many fortunes lost and institutions gone belly up after 1929 Crash - Iconic trappings of wealth considered in bad taste and even “un-American”

26. Era #2: 1930-1945 Rich embrace “thrifty chic” -Staff let go, country places closed -Yachts in dry dock; pools drained -Members resign from private clubs -Family jewels pawned -Cut back on restaurants and taxis

27. Era #2: 1930-1945 Rich in the crosshairs of the FDR administration -Blamed for bringing on hard times -Contrary to leftish agenda (wider distribution of wealth to ease social unrest)

28. Era #2: 1930-1945 “Share the wealth” (or “soak the rich”) plan emerges to “weed out the over- privileged” -Put $ back into system to rebalance economy -“Death tax” proposed to put end to family fortunes

29. Era #2: 1930-1945 Bill passes but does little to soak the rich -Not enough money to make any kind of real impact -Usual tax dodges -Upper class passes off wealth to heirs before Uncle Sam can get it

30. Era #2: 1930-1945 American rich rebound in late 1930s as new crop of millionaires are created by fat defense contracts -Wild cocktail parties -3-4 charity luncheons per week -Private plane displaces private railroad car as vehicle of choice

31. Era #2: 1930-1945 Findings from 1939 Town & Country study of Americans with a butler: -Average of 11 servants -Total of 40 rooms in city townhouse and country house -Average of 181 guests a month during summer and 138 in winter

32. Era #2: 1930-1945 Findings from 1939 Town & Country study of Americans with a butler: -Average family consumes 1,163 bottles of booze a year (389 beer, 289 gin, 242 scotch, 214 rye, 193 wine, 157 champagne, 60 bourbon, 48 Irish whiskey, 47 brandy, 24 cordials)

33. Era #2: 1930-1945 Rich war refugees invade USA beginning in late 1930s -Huge outflow of wealth from Europe -Safe deposit box rentals increase 1,000% between 1939 and 1942 -Exiled royalty fodder for newspaper society columns

34. Era #2: 1930-1945 War throws a major cramp in the style of the American rich -Big hotels/resorts taken over by military -Polo fields used for marching, swimming pools for rehab -Private clubs close, many to never open again

35. Era #2: 1930-1945 Rich join war effort -Use yachts to patrol waters -Enlist to become “millionaire privates” -Society women do volunteer work -Media exploits to demonstrate national unity and “Everyman-ness” of upper class

36. IISix Eras (1920-2009) Era #3: If I Were a Rich Man 1946-1964

37. Era #3: 1946-1964 Old Money face two new threats from the arriviste -Professional/managerial class -Oil Money ($30 million = “Big Rich,” $5 million = “Little Rich”)

38. Era #3: 1946-1964 Locus of American wealth culture shifts west by southwest - Demand for oil, cotton, wheat, meat skyrockets - Driller, rancher, and farmer millionaires pop up like daisies across Great Plains and Panhandle

39. Era #3: 1946-1964 Stories about Big Rich become legendary -Col. Henry Russell buys new Rolls for his wife because it matches her blue hat -Wildcatters living in shacks use silver for favorite meal- salt meat and beans -Texan millionaire to IRS agent: “Just tell me how much you need to make ends meet, son.”

40. Era #3: 1946-1964 “Society” splits into three different (but overlapping) segments by 1960 -Café Society: Reliant on publicity/PR -American Society: Official upper crust -International Society: 2,400 gadabouts (Noel Coward, Aristotle Onassis, Duke and Duchess of Windsor, etc.)

41. Era #3: 1946-1964 Social Register still the Bible of American Society -First published in 1887 -Over 75,000 people in 11 cities in 1959 (no Texans) -Wealth not a guarantee for admission -Fame a major liability

42. Era #3: 1946-1964 Debutante ball remains staple ritual of American Society to perpetuate species -Young women presented, often in multiple cities, to begin mating dance -Henry Ford II spends $250,000 on coming out party for daughter Anne in 1961

43. Era #3: 1946-1964 Increasingly prosperous middle class blurs lines with upper class -Middle class (often with credit cards and expense accounts) act rich -Upper class forego (or just hide) trappings of the affluent to appear less than rich

44. Era #3: 1946-1964 Bourgeoisie now define the American rich -Proverbial men in the gray flannel suit -“Egghead millionaires” (proto-geeks) -Stock options/profit sharing drive wealth -“Semi-Upper Class” in The Status Seekers (Vance Packard, 1959)

45. Era #3: 1946-1964 Symbols of wealthy elite recast as upper middle class -Second homes, swimming pools, traveling internationally, admission to Ivy League colleges -No servants, large estates, yachts

46. Era #3: 1946-1964 Rise of “mass luxury” -Big suburban houses with state of the art appliances and two+ car garage -Boats -Designer clothing -Art, antiques, china, silver

47. Era #3: 1946-1964 Few remaining havens for Old Money lose luster as nouveau riche and less than rich arrive in droves -Old Guard country clubs -Palm Beach, Newport -The “right” address (e.g., Boston’s Commonwealth Avenue)

48. Six Eras (1920-2009) Era #4: Lord, Won’t You Buy Me a Mercedes-Benz? 1965-1979

49. Era #4: 1965-1979 “Self-made man” (ambitious, energetic, confident entrepreneur) symbolic of American rich in mid-1960s - LBJ’s “Great Society” giving consumers money to spend -Rapidly changing technology -Shift to service economy -Easy credit

50. Era #4: 1965-1979 Numbers of American rich still expanding -Seven times as many millionaires in 1965 versus 1948 -90,000 families (1 in 625) -40% women (on paper) -Capital gains/dividends, real estate driving much wealth

51. Era #4: 1965-1979 “Superrich” segment identified by sociologists increasingly interested in American rich in the late 1960s -153 American centamillionaires ($100 million +) -J. Paul Getty, Howard Hughes at the top of the heap

52. Era #4: 1965-1979 Old Money -Use cash or checks -Sit in front of limos, chat with chauffer -Use first names of staff -Pick up golf balls < 5 feet from cup -Obvious toupees

53. Era #4: 1965-1979 New Money -Use credit cards -Sit in back of limos, remain silent -Use last names of staff -Hole out all putts -Natural-looking toupees

54. Era #4: 1965-1979 Mid-1970s “stagflation” reminiscent of dark days of Depression for rich -Cut back on luxuries and lavish lifestyles to stay afloat (e.g. sparkling wine rather than ‘62 Moet) -Sell (slightly used) yacht -Trade in 8 mpg Cadillac for 32 mpg Mercedes diesel

55. Era #4: 1965-1979 Other ways rich stay rich: -Leave Rolls in garage, borrow kid’s VW -Let gardener go -Plastic flowers -Rummage sales -Get a job

56. Era #4: 1965-1979 American rich getting younger and, slowly, more diverse -Men in jeans and with long hair and beards -A few businesswomen break through Old Boys Club -Handful of African-American entrepreneurs become millionaires

57. Era #4: 1965-1979 Even newer kind of millionaire: lottery winners -13 states have lotteries in 1974 (to make up for budget shortfalls) -Typical path: faint, hire lawyer, quit job, blow first $50,000 installment, move to bigger house in nicer neighborhood, lose friends and identity

58. Era #4: 1965-1979 People in entertainment benefit from “media synergy” of 1970s - TV: Johnny Carson, Barbara Walters, Henry Kissinger, Farrah Fawcett -Authors: Colleen McCullough, Stephen King, Alex Haley -Sports: Muhammad Ali, Steve Cauthen -Rock music: Peter Frampton

59. Era #4: 1965-1979 First real how-to-get-rich movement takes off in late 1970s as money becomes “in” -Michael Korda’s Success; Robert J. Ringer’s Looking Out for Number One; William Davis’s It’s No Sin to be Rich -EST-like “Prosperity Training” seminars -“Lucre used to be filthy, but now it’s lovely.” (Kenneth Lamott, 1977)

60. Six Eras (1920-2009) Era #5: Lifestyles of the Rich and Famous 1980-1994

61. Era #5: 1980-1994 1980s a perfect storm for creating new wealth -Low inflation -Falling interest rates -Lower taxes -Easy credit -Ron and Nancy Reagan

62. Era #5: 1980-1994 Conspicuous consumption taken to new level - Two-income, up-and-coming baby boomers catch money fever - Thorsten Veblen officially starts rolling in his grave

63. Era #5: 1980-1994 Forbes introduces “400” list of richest Americans in 1982 -Most thorough investigation into the wealthy up to that point -About 150 of 400 inherited wealth -Remainder “self-made”

64. Era #5: 1980-1994 TV shows reflect and fuel interest in American rich -Dallas, Dynasty, Knot’s Landing, Falcon Crest -Lifestyles of the Rich and Famous (“an open ticket to the 22-karat core of success”)

65. Era #5: 1980-1994 Financial deal-making now the way to get rich quick -Takeovers, mergers, acquisitions, LBOs -“Greed is good” ethos reminds some of robber barons and “the methods of their time”

66. Era #5: 1980-1994 “Affluenza” identified as an affliction of children of the rich - Loss of identity and general aimlessness often associated with alcohol, drugs, and/or sundry other reckless behavior to fill the void

67. Era #5: 1980-1994 “Society” back in style after frumpy 70s -New Money eager to social climb -LA: A-list country club; neighborhood -NYC: Dinner parties with “the right people;” art world; charity scene -DC: Embassy state dinners

68. Era #5: 1980-1994 “Aristobrats” part of Society scene -Rich, precocious 20- and 30somethings -Archetype neatly captured in Whit Stillman’s three comedies of manners (Metropolitan, Barcelona, The Last days of Disco)

69. Era #5: 1980-1994 Social Register getting thinner, however -32,500 in 1988 edition -Heavily Northeastern -Smattering of African Americans and Jews (no Latinos or Asian Americans) -George Bush I the poster child

70. Era #5: 1980-1994 Rich now famous just for being rich -Wall Street “paper entrepreneurs” (and Donald Trump) the rock stars of the 80s -Money is “positively arousing” (Peter Drucker, 1987) -Reading about superrich 1980s “pornography” (Tom Wolfe)

71. Era #5: 1980-1994 “Black Monday” (10/87) end of “eighties” -Boesky, Helmsley, Keating, Milken get busted -Malcolm Forbes dies; Donald Trump overleveraged -Dynasty, Dallas cancelled -Bonfire of the Vanities (Tom Wolfe, 1987)

72. Six Eras (1920-2009) Era #6 Who Wants to Be a Millionaire? 1995-2009

73. Era #6: 1995-2009 Vast fortunes created in mid-1990s virtually overnight -Software companies go IPO -More Californians than New Yorkers on Forbes 400 list in 1995 -Average net worth of listee in 1996 exceeds $1 billion

74. Era #6: 1995-2009 Employees at all levels becoming instant millionaires (on paper) -Tech company IPO a historic breakthrough in speed and equitability -Challenge to traditional ways of getting rich (inheritance, education, membership in Old Boys Club, and, if absolutely necessary, hard work)

75. Era #6: 1995-2009 New new rich not like the old new rich -Two-bedroom rented apartment in San Jose vs. 50-room chalet in Lucerne -More interested in playing Nintendo vs. collecting art or owning yacht

76. Era #6: 1995-2009 Techie tycoons learn fast how to spend $ -Xanadu-like homes -Boeing 757s -Silicon Valley = 12th largest economy in the world in 1999 (compared to Florence during the Renaissance in terms of concentration of wealth)

77. Era #6: 1995-2009 Dot-com bubble fuels “hyper- consumerism” -$6,000 Mont Blanc pens -Personal trainers for kids -66,000 square-foot houses -$35 million Boeing Business Jet (BBJ) -Rent-a-celebrity (Stevie Wonder $750,000, Jerry Seinfeld $550,000)

78. Era #6: 1995-2009 Hedge funders replace dot-commers as leaders of the rich pack in early 2000s -Merely rich (have-a-lots) envious of superrich (have-a-tons) -“The billionaires are ruining it for the millionaires” (not-so-funny joke on Nantucket)

79. Era #6: 1995-2009 Millionaire-mania strikes America -The Automatic Millionaire -One Minute Millionaire -The Accidental Millionaire -Discovering the Millionaire in Every Child -How to Conceive a Millionaire?

80. Era #6: 1995-2009 New model of philanthropy emerges in late 1990s -Charity gala more than a bit worn around the seams -Techies finally start kicking in

81. Era #6: 1995-2009 “Social venture” model emerges out of West Coast tech boom - “Investor donors” interested in “sustainable change” versus just writing a check - Philanthropy seen as a business that should be run like one and be held accountable for its actions

82. Era #6: 1995-2009 Today: golden age of philanthropy beckoning despite economic downturn - $21 trillion predicted to be given away over next half-century (Paul Schervish, Center of Wealth and Philanthropy, 1999)

83. Era #6: 1995-2009 Factors: -Biggest generation in history returning to idealist roots -Celebrities aligned with causes (philanthropy now cool) -Provides sense of purpose -Makes one happy (really is better to give than receive)

84. Rich IIIWealthology™ Topline

85. Charge: explore and document the cultural dynamics of American millionaires for JP Morgan -Investable assets of $5 million+ -Segment by age, gender, and geography

86. IIIWealthology™ Topline Anthropologic/ethnographic approach to complement traditional (quantitative and qualitative) research - How people behave (choose to spend their time and money) vs. what they believe (attitudes, opinions, feelings, etc.)

87. IIIWealthology™ Topline Key finding: 5 millionaire archetypes - Archetypes not mutually exclusive - Each individual typically a composite profile with primary, secondary, and sometimes tertiary core values

88. IIIWealthology™ Topline #1 Thrillionaires Subscribe to the idea that money exists primarily to use -Desire to enjoy the things and experiences that wealth can buy -Symbols of wealth a reminder of one’s status and success

89. IIIWealthology™ Topline #2 Coolionaires View aesthetics as the essence of life -Desire to surround oneself with beautiful things and experiences -Wealth perceived as opportunity to express one’s status as a person of refinement and sophistication

90. IIIWealthology™ Topline #3 Realionaires Natural inclination to stay under the radar of the trappings of wealth -Willingness to spend big money on things that matter but firm resolve to save on things that don’t -Wealth = indicator one is astute

91. IIIWealthology™ Topline #4 Wellionaires Grounded in the pursuit of 360 degree wellness - Commitment to look good, feel healthy, and think positive -Wealth used to convey that one is living a life in balance

92. IIIWealthology™ Topline #5 Willionaires Recognize the privilege and responsibility to try to make the world a better place - Determination to give back, make a mark, and ultimately be remembered -Wealth = the opportunity to realize life’s biggest reward: helping others

93. IIIWealthology™ Topline Larry’s Hierarchy Archetype #5: Willionaires ---------- Archetype #4: Wellionaires ------------------------- Archetype #3: Realionaires ------------------------------------------- Archetype #2: Coolionaires -------------------------------- Archetype #1: Thrillionaires Source: Culture Planning LLC  TIME & MONEY 

94. Rich IVConclusion

95. History of the American rich suggests that the more things have changed, the more they have remained the same -“The love of wealth is…at the bottom of all that the Americans do.” (Alexis de Tocqueville, 1835)

96. IVConclusion Biggest story: rise of the first mass- affluent class in history -American rich discard foreign concepts of entitlement and family dynasty -True to our democratic ideal of meritocracy vs. aristocracy

97. IVConclusion Most recent economic downturn just the latest bump in the long road of the American rich -Conspicuous consumption considerably less conspicuous -Reminiscent of 1930s and 1970s

98. IVConclusion Reality check: most American rich still rich by any historical or comparative measure - $1 million annual income vs. $10 million - 70% of $10 million net worth = $7 million

99. IVConclusion American rich an incredibly adaptive creatures - Like insects, they (or at least their money) will be around long after the rest of us have disappeared