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Opinion | Jeff Bezos’ Phone Hack Should Terrify Everyone - The New York Times
Not long after the Bezos news broke this week, I spoke to Christopher Pierson, who founded BlackCloak, a cybersecurity company for high-net-worth and high-profile individuals — executives, celebrities and billionaires. According to Mr. Pierson, few people take their digital lives as seriously as they should.
cyber_security  hacks  high_net_worth  Jeff_Bezos 
17 hours ago by jerryking
‘Rich people own stocks. Poor people own houses’ - The Globe and Mail
SCOTT BARLOWMARKET STRATEGIST
PUBLISHED 13 HOURS AGO
UPDATED JANUARY 31, 2020
FOR SUBSCRIBERS

The headline / twitter link is misleading. It should be "Rich people have a larger proportion of their wealth in stocks - Poor people have a larger proportion of their wealth in houses." The original headline implies that poor people are poor because they own a home, when in reality the lack of equity is due to available funds not preference.

To me the more interesting take away is that we often are told that the rich are rich primarily because they own land and other real estate. When this research would suggest that real estate is in reality a pretty insignificant part of the equation. It should come as no surprise that that the bottom 50% have minimal direct equity holdings given their ability/propensity to invest vs. save. A more interesting and informative statistic or graphic would have shown what the middle 49% are doing.
equities  high_net_worth  home_ownership  personal_finance  real_estate  wealth_management 
22 days ago by jerryking
Opinion | How the Superrich Took Over the Museum World
Dec. 14, 2019 | The New York Times | by Michael Massing, the author, most recently, of “Fatal Discord: Erasmus, Luther and the Fight for the Western Mind.”

The wealthy have always influenced the art scene. But in recent years, in an age of mounting anger over income inequality, they've come to dominate it......
Of MoMA's 51 trustees who vote, 45 work in finance, the corporate world, real estate or law, or are the heirs or spouses of the superrich.....both MoMA and the Met expect wealthy newcomers to their board of trustees to donate millions of dollars as the price of membership..........Art has always depended on wealthy patrons; see the Medicis, Frick and Morgan. In contrast to Europe, where museums receive significant (though now decreasing) state funding, most American museums rely heavily on private donors. .............Many of MoMA’s trustees are devoted collectors of modern and contemporary art, and the museum has benefited accordingly....... with trustees funding or donating to the museum various artistic works.......Yet dependence on the kindness of billionaires comes at a price. Today’s museum world is steeply hierarchical, mirroring the inequality in society at large........MoMA's curators seem very well paid; people in more junior positions much less so........Among the biggest losers in the current system are artists themselves. With art now considered an asset class similar to equities and commodities, collectors are forever on the lookout for rising stars whose work can be bought at bargain prices and then resold for many multiples as their reputation soars. When the market moves on, careers are often shattered (except in the case of a few ever-in-demand stars)......And even those artists who do remain popular usually benefit only from the initial sale of their work; as its value appreciates, the profits go mainly to collectors and auction houses. Museum trustees have ready access to curators and gallery owners who can point out emerging artists whose work they can buy at an early stage and benefit as the demand for it grows.......the most serious concern raised about baronial boards is the possible constraints they place on what museums can exhibit......For example, Why is there not more art inspired by such urgent matters as income inequality, deindustrialization or the rise of populism. Or why was there not more art inspired by the impact of Wall Street on Main Street or the continuing fallout from the 2008 financial crisis — the root of so much unrest in the world today?...... trustees have no decision-making role in its exhibitions, which are determined solely by the museum’s “strong curatorial staff” in regular consultation with artists....Yet a board’s influence need not be overt to be profound; curators are no doubt savvy enough to know how far they can go in challenging a system of which their trustees are such pillars.....For the superwealthy, membership on museum boards brings many benefits, including an increase in social status, access to other powerful people and an enhancement of one’s image.
Is there an alternative to the current system?
An obvious one would be to substantially increase public funding for the arts in general, and museums in particular......In 2018, MoMA received a paltry $22,000 in government funds (from New York City), compared with the $136 million it got from private sources. In fact, MoMA does not seek or receive federal or state funding. But MoMA in fact gets substantial public support through the tax write-offs its wealthy donors receive as well as its own nonprofit status. The public is in effect subsidizing the museum without getting any corresponding say in its governance.
In return for nonprofit status, the government could require MoMA and other museums to allocate a certain portion of board spots to people whose lives are not devoted to making money. The presence of art critics, historians, architects and nonprofit leaders could force museums to consider a much broader array of viewpoints.....As for more direct public funding of museums, this might seem a long shot in modern-day America, but the current political moment has created new opportunities. If taxes on the rich were raised, which most Democratic presidential candidates support, more public funds could be earmarked for museums — and for libraries, performing arts centers and other cultural institutions. 
Accomplisher_Class  art  artists  asset_classes  boards_&_directors_&_governance  collectors  contemporary_art  cultural_institutions  culture  curators  high_net_worth  income_inequality  intellectual_diversity  Manhattan  moguls  MoMA  museums  New_York_City   overachievers   patronage  patrons  philanthropy  public_funding  subsidies  tax-deductible  The_One_Percent 
9 weeks ago by jerryking
Family offices turn their attention to tech companies
December 2, 2019 | | Financial Times | by Javier Espinoza.

return comes from a few hyper-successful outliers. Investors should take a portfolio approach to have the best chance of “catching the winners”,
early-stage  Europe  family_office  high_net_worth  investors  technology  venture  capital  vc 
11 weeks ago by jerryking
Billionaires have never had it so good
November 13, 2019 | | Financial Times | by John Gapper

* Fortunes are created by technology and globalization, as well as talent and enterprise.
* The “smart risk-taking, business focus and determination” of rich entrepreneurs give them the ability “to transform entire industries, to create large numbers of well-paid jobs, and to rally the world to find cures for diseases such as malaria.
* billionaires have “an obsessive business focus, constantly scanning the world for new opportunities. And they are highly resilient, undeterred by failures and roadblocks.
* There are more entrepreneurs from middle-class backgrounds who went to elite universities before making their fortunes.

But such success would have been less lucrative in the past — they might have been merely rich rather than super-rich. Before lionising or demonising elite entrepreneurs, consider how their personal talents are amplified.

(1) the superstar effect. Globalisation and technology that allows businesses, such as Google and Facebook, to span markets, help the most successful entrepreneurs to profit faster and at greater scale. Successful founders can create superstar franchises, like some Hollywood stars in China....The economist Sherwin Rosen once noted that “superstar economics” mean the returns to the winner in any category can be vastly higher than the returns to second place. These winners can, as the economist Alfred Marshall commented in 1890, “apply their constructive or speculative genius to undertakings vaster, and extending over a wider area, than ever before”.
(2) The security effect (JCK: aka "long-term vision" or having a long-term time horizon). One reason why the poor stay poor is that they cannot plan for the long-term.....“the present takes up a great deal of [poor] people’s awareness, so they tend to delay investment decisions”. The reverse is true of billionaires, who can finance ideas over decades and ride out failures and setbacks. UBS says that “the outperformance we call the ‘billionaire effect’ depends on the entrepreneur keeping control [of a company]”, but they may be advantaged by security as much as genius.
(3) the insider effect. People do not turn into billionaires without a keen sense of financial opportunity and the drive to make a series of good decisions. But once they achieve positions of power, they are reinforced by a network of advisers and brokers.
Billionaires do not leave their cash at banks; UBS or other private banks handle it. They have insider access, such as the opportunity to invest in private businesses, or initial public offerings of fast-growing companies. Wealth does not automatically beget wealth but moving in elite financial circles with enviable resources helps.
(4) the tax effect. Many countries tax income higher than capital, because it is simpler and they want to encourage entrepreneurs. But this leads to the rich paying less as a share of their wealth than those on average incomes. Wealth is also mobile... billionaires have scope through trust and offshore structures to shield some of their wealth.

It is salutary that more of today’s super-wealthy built their own fortunes, but they are also lucky to live at an unusually helpful time in economic history.
billgates  Campaign_2020  capital_flows  Elizabeth_Warren  financial_advisors  high_net_worth  insiders  long-term  meritocratic  moguls  superstars  tax_codes  tax_planning  time_horizons 
november 2019 by jerryking
Quote by F. Scott Fitzgerald: “Let me tell you about the very rich. They are d...”
F. Scott Fitzgerald

“Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft where we are hard, and cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand. They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think that they are better than we
are. They are different. ”
affluence  F._Scott_Fitzgerald  high_net_worth  quotes 
october 2019 by jerryking
How the ultra-high-net-worth investor prepares for a recession
August 27, 2019 | - The Globe and Mail | by TARA DESCHAMPS, SPECIAL TO THE GLOBE AND MAIL.

investment managers thinking more strategically about how to protect their clients’ wealth, which includes everything from traditional stocks and bonds to alternative assets such as real estate, private equity and debt.

Mr. Janson, who still has “deep, long scars” from the 2008 recession, which he spent in Switzerland as a portfolio manager, says his main advice for UHNW individuals is to diversify. By spreading assets around, investors have a better chance of softening the blow to their overall portfolio if one sector is hit harder than others.

“Too many Canadians have too many eggs in one or two baskets, usually stocks and bonds,” Mr. Janson says. “You should be thinking about all asset classes, whether that’s stocks, bonds, private equity, private debt, real estate debt, real estate equity, hedge funds and others.”

Mr. Janson also keeps an eye on real estate investments as an opportunity. Housing prices typically fall during a recession, and more homes hit the market when owners can no longer afford the mortgages or need to shore up cash.

If the UHNW want to be involved in real estate in a recession, Mr. Janson recommends they look for “defensive” pockets in the market.
asset_classes  diversification  high_net_worth  howto  personal_finance  precaution  preparation  recessions 
august 2019 by jerryking
What Jeffrey Epstein’s black book tells us about Manhattan
AUGUST 23, 2019 | Financial Times | Holly Peterson.

...it makes perfect sense that Epstein would need a black book of people he knew — and wanted to know. He couldn’t get to the top of the totem pole otherwise. His career was so secretive, his CV so sparse, that no one knew where his money came from. What he needed was a social network.

The primary axiom to remember in this hideous saga: rich people don’t get richer only because of tax windfalls. Rich people get richer because they hang out together....Most of the Americans included in the black book have one common denominator: they are socially and professionally voracious people who form part of New York’s “Accomplisher Class”. The accomplishers appear at book parties, Davos, the Aspen Ideas Festival, benefits and openings. They understand that to be avidly social is to assure recognition and prominence. Remember, the rich covet convening power: the ability to reach a point where one’s social and professional life are confused as one....Tina Brown has been an astute observer of New York society....“The alpha energy of Manhattan is far more intense than anywhere European: more money, bigger stakes. Every achiever who wants to get to the top, has to fight like hell to be seen and heard on this island.”.....The now ossified Wasp culture may still count for country club memberships or the preppy glow of a Ralph Lauren advertisement, but not much else. New York high society has been paradoxically meritocratic for a few decades, at least since the go-go 1980s......On a grander scale, the accomplisher class is neither defective nor debauched. When accomplishers exchange ideas, much good can come in the form of entrepreneurship in technology, business or innovative arts.....At its best, the American system of philanthropy launches museums and hospitals, urban and charter schools, and relief to the poor in towns all over America. Much of this is enabled by the accomplishers, aided by tax laws that promote charitable deductions. People in this group have multiple invites most weekday nights to attend benefits that help the causes they care about most, with the added value of showing off how magnanimous they are in programmes that list precisely how much they gave....Attending a high-end event in New York is a way of taking a victory lap with other accomplishers around the room......It would be a mistake to assume that the accomplisher class is all about wealth. If you want access to capital or airwaves, boring and rich doesn’t get you that far in this high-testosterone playground. If you ran your father’s company into the ground, you’re a nobody in this town. The paycheck is not all that matters: editorial media power controls the conversation, foundation power means you write the big checks. What people admire is top achievement in almost any field....Accomplishers in New York society may be particularly American in that they do not necessarily shy away from a bad reputation. They are so interested in a story and a comeback that they can forgive human failings, and are often intrigued with flaws as much as success.

What’s more, New York is so relentlessly fast-paced and ambition among the accomplishers so colossal, they don’t always take the time to be discerning.
Accomplisher_Class  Bonfire_of_the_Vanities  comebacks  elitism  high-achieving  high_net_worth  Jeffrey_Epstein  Manhattan  New_York_City  overachievers  philanthropy  political_power  reputation  the_One_percent  Tina_Brown  meritocratic  The_Establishment  social_networking  social_classes  tax_codes 
august 2019 by jerryking
Private Libraries That Inspire
April 25, 2019 | WSJ | By Katy McLaughlin.

Difficult to build and maintain, these elaborate spaces contain the passions and obsessions of their owners. Libraries That Inspire -- These spectacular rooms house the owners’ collections of books, antiques, art and ephemera representing their unique, life-long passions and interests.

Forget the Dewey Decimal System: Entrepreneur and inventor Jay Walker’s 25,000 books, manuscripts, artifacts and objects are organized in his personal 3,600-square-foot library “randomly, by color and height,” he said. When he walks into his library, part of his Ridgefield, Conn., home, the room automatically “wakes up,” glowing with theatrical lighting, music and LED-lit glass panels lining various walkways. He finds items to peruse by a system of memory, chance, and inspiration, he said.

The Walker Library of the History of the Human Imagination is a dramatic example of the rarest of residential amenities: A vast, personal, custom-built repository of intellectual stimuli. In the age of the e-reader, it is a status symbol on par with wearing a Patek Philippe watch when the cellphone already tells the time. For wealthy homeowners, personal libraries provide both a quiet refuge from the world and a playground for their minds—as well as a solution to the challenge of warehousing books from which they cannot bear to part......To create enough shelf space and to counteract the visual heaviness of walls lined with books, private libraries may aim for two or more open stories......The private library is a classic example of a highly personal amenity that is expensive for the builder of a dream home to create and hard to recoup upon resale. .......the library has stimulated new ideas that have translated into an array of inventions and helped him make many new friends.

For some private library owners, especially those who aspire to world-class book collections, the serious expenditure isn’t in the physical structure, but in the contents. “It is not uncommon for collectors at this level to be spending in excess of $1 million a year” on books ......
antiques  antiquities  art  bespoke  books  collectibles  collectors  curation  design  high_net_worth  ideas  inspiration  insurance  Katy_McLaughlin  life_long_learning  personal_libraries  physical_place  owners  passions  shelf_space  status_symbols  uniqueness 
april 2019 by jerryking
How to funnel capital to the American heartland
April 15, 2019 | Financial Times | by Bruce Katz.
* The Innovation Blind Spot, by Ross Baird.
* Ways must be found to rewire money flows in order to reverse the export of wealth
* A federal tax incentive intended to entice coastal capital into the heartland may end up helping to keep local capital local.

Over the past year, economically distressed communities across the US have been engaged in an intense discussion about mobilising private capital. Why? As mayors, governors, real estate developers, entrepreneurs and investors have learnt, buried in the 2017 Tax Cuts and Jobs Act was a provision that created a significant tax incentive to invest in low-income “opportunity zones” across the country......the law’s greatest effect, ironically, has been to unveil a treasure trove of wealth in communities throughout the nation. Some of the country’s largest investors are high-net-worth families in Kansas City, Missouri, and Philadelphia; insurance companies in Erie, Pennsylvania, and Milwaukee; universities in Birmingham, Alabama, and South Bend, Indiana; philanthropists in Cleveland and Detroit; and community foundations and pension funds in every state.

These pillars of wealth mostly invest their market-oriented equity capital outside their own communities, even though their own locales often possess globally significant research institutions, advanced industry companies, grand historic city centres and distinctive ecosystems of entrepreneurs. The wealth-export industry is not a natural phenomenon; it has been led and facilitated by a sophisticated network of wealth management companies, private equity firms, family offices and financial institutions that have narrow definitions of where and in what to invest.

The US, in other words, doesn’t have a capital problem; it has an organisational problem. So how can capital flows be rewired to reverse the export of wealth?

Three things stand out:

(1) Information matters. The opportunity zones incentive has encouraged US cities to create investment prospectuses to promote the competitive assets of their low-income communities and highlight projects that are investor-ready and promise competitive returns.

(2) norms and networks matter. The opportunity zone market will be enhanced by the creation of “capital stacks” that enable the financing of community products such as workforce housing, commercial real estate, small businesses (and minority-owned businesses in particular) and clean energy, to name just a few. Initial opportunity zone projects are already showing creative blends of public, private and civic capital that mix debt, subsidy and equity.

(3) institutions matter. Opportunity zones require cities to create and capitalise new institutions that can deploy capital at scale in sustained ways. Some models already exist. The Cincinnati Center City Development Corporation, backed by patient capital from Procter & Gamble, has driven the regeneration of the Over-the-Rhine neighbourhood during the past 15 years.

More institutional innovation, however, is needed. As Ross Baird, author of The Innovation Blind Spot, has argued, the US must create a new generation of community quarterbacks to provide budding entrepreneurs with business planning and mentoring, matching them with risk-tolerant equity. These efforts will succeed if they unleash the synergies that flow naturally from urban density. New institutions will not have to work alone, but hand-in-glove with the trusted financial firms that manage this locally-generated wealth.
books  capital_flows  cities  coastal_elites  community  economic_development  economically_disadvantaged  economies_of_scale  high_net_worth  howto  industrial_policies  industrial_midwest  industrial_zones  institutions  investors  match-making  midwest  municipalities  networks  network_density  P&G  PPP  packaging  place-based  private_equity  property_development  prospectuses  Red_States  rescue_investing  rust_belt  tax_codes  venture_capital 
april 2019 by jerryking
How the 0.001% invest - Investing and the super-rich
Dec 15th 2018

Global finance is being transformed as billionaires get richer and cut out the middlemen by creating their own “family offices”, personal investment firms that roam global markets looking for opportunities. Largely unnoticed, family offices have become a force in investing, with up to $4trn of assets—more than hedge funds and equivalent to 6% of the value of the world’s stockmarkets. As they grow even bigger in an era of populism, family offices are destined to face uncomfortable questions about how they concentrate power and feed inequality......Every investment boom reflects the society that spawned it. ....The rise of family offices reflects soaring inequality......But since the financial crisis there has been a loss of faith in external money managers. Rich clients have taken a closer look at private banks’ high fees and murky incentives, and balked......Family offices’ weight in the financial system....looks likely to rise further. As it does, the objections to them will rise exponentially....that family offices have created inequality. They are a consequence, not its cause. Nonetheless, there are concerns—and one in particular that is worth worrying about: (1) The first is that family offices could endanger the stability of the financial system. (2) The second worry is that family offices could magnify the power of the wealthy over the economy.(3) that family offices might have privileged access to information, deals and tax schemes, allowing them to outperform ordinary investors.

The answer is vigilance and light. Most regulators, treasuries and tax authorities are beginners when it comes to dealing with family offices, but they need to ensure that rules on insider trading, the equal servicing of clients by dealers and parity of tax treatment are observed. And they should prod family offices with assets of over, say, $10bn to publish accounts detailing their workings. In a world that is suspicious of privilege, big family offices have an interest in boosting transparency. In return, they should be free to operate unmolested.
diversification  family_office  finance  financial_system  investing  investors  money_management  the_One_percent  upper_echelons  high_net_worth 
january 2019 by jerryking
Luxury Brands Buy Supply Chains to Ensure Meeting Demand
Nov. 15, 2018 | The New York Times | By Mark Ellwood.

The luxury markets are booming to such an extent that brands look to ensure they can meet demand by buying companies that supply their raw materials.

In the last six years, David Duncan has been on a buying spree. This Napa Valley-based winemaker and owner of Silver Oak Cellars hasn’t been splurging on fast cars or vacation homes, though. He’s been buying up vines — close to 500 acres in Northern California and Oregon.

It’s been a tough process, at times: He almost lost one site to a wealthy Chinese bidder. It was only when he raised his offer by $1 million that he clinched the sale at the last moment. At the same time, Mr. Duncan also took full control of A&K Cooperage, now the Oak Cooperage, the barrel maker in Higbee, Mo., in which his family had long held a stake. These hefty acquisitions are central to his 50-year plan to future-proof the family business against a changing luxury marketplace.

As Mr. Duncan realized, this market faces what might seem an enviable problem: a surfeit of demand for its limited supply. The challenge the winery will face over the next decade is not marketing, or finding customers, but finding enough high-quality raw materials to sate the looming boom in demand. Though there might be economic uncertainty among the middle classes, wealthier consumers are feeling confident and richer because of changes like looser business regulations and lower taxes.
affluence  artisan_hobbies_&_crafts  brands  competitive_advantage  core_competencies  future-proofing  high_net_worth  high-quality  luxury  raw_materials  scarcity  supply_chains  sustainability  vertical_integration  vineyards 
november 2018 by jerryking
China’s New Billionaires Are Young, Fast Workers With an Appetite for Risk
Oct. 29, 2018 | The New York Times |

Technology is helping to line the pockets of many new Chinese billionaires — including Zhang Yiming of the video-sharing app ByteDance and Wang Jian, the co-founder of the Shenzhen-based gene sequencing company BGI. China is now producing almost as many unicorns, or companies worth at least $1 billion, as the United States.

But China’s billionaires differ markedly from their global peers. With an average age of 55 years, they are almost a decade younger. They create wealth faster and take their companies public earlier; 17 percent of China’s new billionaires founded their businesses within the last ten years, more than twice as many as in the United States.
China  high_net_worth  moguls  wealth_creation 
october 2018 by jerryking
Engaging with the world’s ills beats hiding in a bunker
OCTOBER 18, 2018 | Financial Times | Stephen Foley.

those with real ambition are not planning for a life underground down under. They are building philanthropic ventures to tackle the world’s ills, or striving to effect change through the political process, or starting new mission-driven businesses.

The bunker mentality is the polar opposite of the optimism displayed by the likes of Jeff Bezos, who set out his philanthropic credo in September alongside his plan to build a network of Montessori-inspired preschools across the US. He talked of his “belief in the potential for hard work from anyone to serve others”, from “business innovators who invent products that empower, authors who write books that inspire, government officials who serve their communities, teachers, doctors, carpenters, entertainers who make us laugh and cry, parents who raise children who go on to live lives of courage and compassion”.

“It fills me with gratitude and optimism,” he said, “to be part of a species so bent on self-improvement.”

Bezos has decided to focus his charity on children, as many of his peers have done. From Mark Zuckerberg promising to fund a technological revolution in the way kids are taught, to the slew of east coast hedge fund managers promoting charter schools as a way to shake-up public education, philanthropists know instinctively that childhood is their point of maximum leverage.....engagement trumps disengagement. Public service matters, even if one is only stealing apocalyptic proclamations from a presidential desk. It beats burying one’s head in the New Zealand soil.

Many of the world’s richest individuals are working to avert the war, pestilence or revolution that would make a withdrawal from society seem attractive in the first place. Philanthropists who are funding human rights campaigns, or drug research, or novel approaches to tackling inequality — these are the real survivalists.
apocalypses  bolt-holes  catastrophes  charities  childhood  children  disasters  disaster_preparedness  engaged_citizenry  hard_work  high_net_worth  Jeff_Bezos  mission-driven  moguls  Montessori  New_Zealand  novel  off-grid  optimism  Peter_Thiel  self-improvement  philanthropy  public_service  survivalists 
october 2018 by jerryking
Why Jeff Bezos Should Push for Nobody to Get as Rich as Jeff Bezos
Sept. 19, 2018 | The New York Times | By Farhad Manjoo.

Why does Jeff Bezos have so much money in the first place? What does his fortune tell us about the economic structure and impact of the tech industry, the engine behind his billions? And, most important, what responsibility comes with his wealth — and is it any business of ours what he does with it?.........Bezos’ extreme wealth is not only a product of his own ingenuity. It is also a function of several grand forces shaping the global economy...the unequal impact of digital technology..... direct economic benefits have accrued to a small number of superstar companies and their largest shareholders.....the most important thing Bezos can do with his money is to become a traitor to his class,” said Anand Giridharadas, author of a new book, “Winners Take All.”.....Giridharadas argues that the efforts of the super-wealthy to change the world through philanthropy are often a distraction from the planet’s actual problems. To truly fix the world, Mr. Bezos ought to push for policy changes that would create a more equal distribution of the winnings ......there are fans of Amazon who will dispute the notion that Bezos’ wealth represents a problem or a responsibility....He acquired his wealth legally and in the most quintessentially American way: He had a wacky idea, took a stab at it, stuck with it through thick and thin, and, through patient, deliberate, farsighted risk-taking,.......Tech-powered businesses are often driven by an economic concept known as network effects, in which the very popularity of a service sparks even greater popularity. Amazon, for instance, keeps attracting more third-party businesses to sell goods in its store — which in turn makes it a better store for customers, which attracts more suppliers, improving the customer experience, and so on in an endless virtuous cycle........Mr. Bezos’ most attractive quality, as a businessman, is his capacity for patience and surprise. “This is guy who was willing to buck what everyone else thought for so long,” Mr. Giridharadas said. “If he brings that same irreverence to the question of how to give, he has the potential to interrogate himself about why it is that we need so many billionaires to save us in the first place
Amazon  Anand_Giridharadas  books  economic_policy  economies_of_scale  Erik_Brynjolfsson  Farhad_Manjoo  Jeff_Bezos  third-party  high_net_worth  human_ingenuity  ingenuity  moguls  network_effects  philanthropy  superstars  virtuous_cycles  winner-take-all 
september 2018 by jerryking
3 Investments That May Have Hit Their Peak - The New York Times
By Paul Sullivan
Sept. 14, 2018

Dan Rasmussen, a contrarian investor and the founding partner of Verdad Capital in Boston, has written an article and two reports that make a case against investments in three of the most popular asset classes for high-net-worth investors: private equity, venture capital and private real estate. He has piles of data to back up his argument.
asset_classes  high_net_worth  investors  Michael_Sonnenfeldt  private_equity  real_estate  Tiger21  venture_capital  wealth_management 
september 2018 by jerryking
When a $1,000 Gift Is Better Than $1 Million - The New York Times
By Paul Sullivan
Aug. 17, 2018

Smaller, local gifts are part of a trend of philanthropists narrowing their focus so they can feel like their donations matter, said David Callahan, founder and editor of Insider Philanthropy and the author of “The Givers: Wealth, Power and Philanthropy in a New Gilded Age.”

“In this age of big philanthropy, when so many billionaires and foundations are active, donors at a more modest level can feel like their money might not count as much when directed to issues like climate change or global development,” Mr. Callahan said.

“Even if you have a $100,000 a year to give, it can feel like a drop in the bucket compared to what Bill Gates or Mike Bloomberg is giving,” he added. “But that kind of money can have a big impact if you’re giving to local food pantries or schools.”.....The KentPresents festival, in its fourth year this weekend, attracts Nobel laureates, secretaries of state, academics, artists and journalists discussing topics as varied as global affairs and visual arts. The festival is the brainchild of Benjamin M. Rosen, a venture capitalist in the 1980s and ’90s and former chairman of Compaq, and his wife, Donna.......modeled the event on the Aspen Ideas Festival, an annual gathering of intellectual luminaries in the Colorado ski town, but he said he wanted to distribute the money the festival raised to small, little-known nonprofit organizations.
books  high_net_worth  philanthropy  bite-sized  impact_investing 
august 2018 by jerryking
An unusual family approach to investing
May 30, 2018 | FT | John Gapper.

JAB’s acquisition of Pret A Manger resembles private equity but with a long-term twist.

Warren Buffett’s definition of Berkshire Hathaway’s ideal investment holding period as forever. ....Luxembourg-based JAB, owned by four heirs to a German chemical fortune, takes a family approach to investing. It is unusual in that this holding company seeks to retain its portfolio companies for at least a decade. These include Panera Bread, Krispy Kreme and Keurig Green Mountain coffee, which it merged with Dr Pepper Snapple in an $18.7bn deal in January 2018. This week JAB acquired the UK sandwich chain Pret A Manger for £1.5bn, continuing its buying spree of cafés and coffee, mounting a challenge to public companies such as Nestlé.

**These companies are acquired not to be traded but to be invested in and expanded.**

JAB is an innovative combination of ownership and investment in a world that needs challengers to stock market ownership and private equity. It is family controlled, but run by veteran professional executives. When it invests in companies such as Pret A Manger, it deploys not only the Reimann family’s wealth but that of other entrepreneurs and family investors.......Some of the equity for its recent deals, including Panera and Dr Pepper, came from funds raised by Byron Trott, the former Goldman Sachs investment banker best known for being trusted by the banker-averse Mr Buffett. Mr Trott’s BDT banking boutique specialises in advising founders and heirs to corporate fortunes, including the Waltons of Walmart, and the Mars and Pritzker families.

This is investment, but not as most of us know it. By definition, the world’s companies are mostly controlled by founders and their families — only a minority become big enough to be floated on stock markets and need to disclose much of their workings to outsiders. Family fortunes also tend to remain as private as possible: there is little incentive to advertise how much wealth one has inherited......As [families'] fortunes grow in size and sophistication, more of the cash is invested in other companies rather than in shares and bonds. That is where JAB and Mr Trott come in.

Entrepreneurs and their families tend to be fascinated by their own enterprises and bored by managing their wealth. But they want to preserve it, and they often like the idea of investing it in companies similar to their own — industrial and consumer groups that need more capital to expand. It is not only more interesting but a form of self-affirmation for the successful....Being acquired by JAB is appealing. The group turns up, says it will not take part in an auction but offers a good price (it bought Pret for more than its former owner Bridgepoint could get by floating it). It often keeps the existing executives, telling them they have to plough their own money into the company, and invests in long-term growth provided the business is efficiently run.

This is more congenial than heading a public company and contending with a huge variety of shareholders, including short-term and activist investors. It is also less risky than being bought by 3G Capital, the cost-cutting private equity group with which Mr Buffett teamed up to acquire Kraft Heinz. While 3G is expert at eliminating expenses it is less so at encouraging growth.
coffee  dynasties  high_net_worth  holding_periods  investing  investors  JAB  long-term  Nestlé  Pritzker  private_equity  privately_held_companies  Unilever  unusual  Warren_Buffett  family  cafés  Pret_A_Manger  3G_Capital  discretion  entrepreneur  boring  family_business  heirs 
may 2018 by jerryking
Christie’s Jussi Pylkkanen and superauctions
NOVEMBER 10, 2015 | FT | John Gapper.

....Of all his crafty sales tactics, the one used to greatest effect by Christie’s 52-year-old global president — the auctioneer on top of the wave of wealth in the world’s art market — is the query: “Are you sure?” He asks it as one of the last two bidders in an auction drops out, threatening to finish it. As he halts the action for a few seconds — what he calls “the auctioneer’s pause” — pressure builds on the reluctant bidder.

'Are you sure, sir?'

Auctions are unusual in the 21st century - most things, even luxury items such as watches and clothes, sell at fixed prices although there is some room to haggle. Even many items on eBay, the electronic platform, are sold at fixed prices. In The Dynamics of Auction , Christian Heath, a professor of work at King's College, London, describes them as "a somewhat anachronistic method of selling goods, more common perhaps to traditional agrarian societies than post-industrial capitalism."

They are still used for art because every painting is different and has no intrinsic value - it does not yield anything and the cost of manufacture is usually tiny. They are also a good way to get high prices - when buyers compete against a deadline, they behave differently. The desire not only to acquire it but to beat others causes what Deepak Malhotra, a Harvard professor, terms the "emotional arousal" of auctions.

"We know that the Modigliani [being sold on Monday] is the artist's greatest work," says Pylkkanen, never short of an extravagant compliment for his inventory. "We know that it was painted in 1917. We know that it is being sold 100 years later, and that nobody in their lifetime has had an opportunity to buy it on the open market. We're all individuals and when we get a chance, it's like, 'That's the one. I've got to go [for it].' "

The task of the auction house is to gather as many people as possible - especially wealthy people - in a saleroom, or on the end of a phone line to the room, and to create the atmosphere for such moments to occur. The auctioneer must be charming, relaxed, and pleasantly ruthless. "You need poise, control and an element of openness because you're inviting people to this thing. You're making them compete without pushing too hard."
art  art_market  auctions  books  Christie’s  collectors  collectibles  high_net_worth  intrinsic_value  Jussi_Pylkkanen  power_of_the_pause  pricing  sales_tactics 
may 2018 by jerryking
Four qualities the wealthy look for when seeking out advisers - The Globe and Mail
| SPECIAL TO THE GLOBE AND MAIL | ANDREW MARSH, Andrew Marsh is president and chief executive officer of independent wealth-management firm Richardson GMP Ltd.

6 HOURS AGO

They look for these four essential qualities in their advisers – and you should, too:

Ability to challenge assumptions

There's a common misconception that wealthy people seek out "yes men" who simply agree with their opinions. Not in my experience. HNW investors value professionals who challenge assumptions and push back (hard) on long-held client beliefs – someone who isn't afraid to ask pointed, difficult questions about risk.

This kind of valued, trusted, sometimes contrary second opinion is a big reason why HNW investors work with professionals in the first place.

Belief in 'road maps'

Risk is often a reactive experience: It becomes an issue only when "stuff happens." That's not the way HNW investors think about it.

Instead, they're looking for advisers who can create a "risk road map" that anticipates the "stuff" that might come up, and outlines an appropriate asset allocation. The ultimate goal is to optimize the portfolio and align it with the risk needed to achieve specific financial goals – why aim for 12-per-cent returns if 7 per cent is all you need?

A 'wise counsellor'

Financial planner, portfolio manager, coach, confidant – advisers take on many roles with their clients. But the one that matters most to HNW individuals is that of counsellor: the calm voice of reason in times of uncertainty.

The best advisers I know have an extraordinary ability to be the "cool hand" when market noise is at its peak. They talk clients through anxieties and worries, and hold clients to long-term plans when the temptation to deviate arises (such as right now).

Understands the limits

Finally, great advisers understand their clients' risk limits. They ask clients difficult questions about risk tolerance, and they probe clients constantly to understand the boundaries of their financial comfort.

Great advisers work hard to ensure the advice they're giving to clients aligns with the information they're getting from clients – both the words and the unarticulated feelings behind those words. They understand that the best way to manage risk is to never allow their client to be in a situation that feels risky.
advice  anticipation  asset_allocation  assumptions  contrarians  financial_advisors  high_net_worth  investment_advice  risk-tolerance  roadmaps  unarticulated_desires  uncertainty  wisdom 
august 2017 by jerryking
Can we ever knock down the walls of the wealthy ghetto?
Jul. 15, 2017 | The Globe and Mail | DOUG SAUNDERS.

Fifty-two years ago, sociologist John Porter demonstrated, in his bestseller The Vertical Mosaic, that Canada's economy, its politics and its culture were controlled by a cloistered elite from the same schools and neighbourhoods, and only 3 per cent of Canadians had any access to this circle. Social mobility has improved dramatically thanks to half a century of immigration, growth and better social policies. But the top ranks remain closed and self-protective.

There are two factors in particular that make Canada's cycle of privilege a closed loop that excludes outsiders.

The first is Canada's lack of an inheritance tax. Estates (including houses) are taxed as income upon their owner's death, then can be passed on to children – removing incentives to put that wealth to better and more productive use. As a result, the higher rungs on the ladder are less open to people who have developed creative, profitable companies and ideas, and more so to people who have simply had the right parents.

The second is Canada's lax policy on private schools. The 6 per cent of Canadians who attend fee-charging schools are overwhelmingly there because their families are wealthy (studies show that their advantages are entirely found in their connections, not in their academic performance).
Canada  Canadians  high_net_worth  privilege  Doug_Saunders  cumulative  social_mobility  social_classes  private_schools  inheritance_tax  elitism  compounded  inequality  geographic_sorting  college-educated  super_ZIPs  self-perpetuation  upper-income 
july 2017 by jerryking
Travel Agents? No. Travel ‘Designers’ Create Strategies, Not Trips. - The New York Times
By JOANNE KAUFMAN JULY 5, 2017

Affluent travelers are turning to travel designers, whose services go beyond booking trips to managing travel portfolios.....a subset of travel planners — they prefer the term travel designers — who do far more than simply book trips. They manage the travel portfolios of their affluent clients, mapping out a schedule that might, over a year, include mother-daughter weekends in the Caribbean, father-son heli-skiing, a romantic husband-and-wife weekend getaway and an elaborate summer trip for the whole family.....A high level of planning and involvement “is part of an emerging market where there are people who have more money than time and want expertise,” ..... For example, he said, “a traditional travel agent wouldn’t know to ask questions like ‘what’s the smallest plane you’d be willing to fly on?’”

Such clients,...may not be price sensitive, but are highly sensitive to perceived slights. “Someone I know professionally,” he said, “went on a trip to a remote location and was served frozen orange juice, and told me he would never use his travel designer again because he expected fresh juice.”

Often, long-range planning is a practical necessity. Some of the most sought-after lodges and boutique hotels have limited space.....my own take, a caveat, is that it is unclear whether the degree of planning involved leaves room for serendipity (See Add Uncertainty to Your Financial Plans - NYTimes.com)
affluence  boutique_hotels  concierge_services  curation  detail_oriented  high_net_worth  high-touch  hospitality  hotels  itineraries  long-range  luxury  planning  portfolio_management  serendipity  travel  travel_agents  uncertainty 
july 2017 by jerryking
Giving Away Your Billion
JUNE 6, 2017 | The New York Times | David Brooks.

Recently Brooks has been reading the Giving Pledge letters. These are the letters that rich people write when they join Warren Buffett’s Giving Pledge campaign. They take the pledge, promising to give away most of their wealth during their lifetime, and then they write letters describing their giving philosophy......Most of the letter writers started poor or middle class. They don’t believe in family dynasties and sometimes argue that they would ruin their kids’ lives if they left them a mountain of money. Schools and universities are the most common recipients of their generosity, followed by medical research and Jewish cultural institutions. A ridiculously disproportionate percentage of the Giving Pledge philanthropists are Jewish.......What would David Brooks do if he had a billion bucks to use for good? He’d start with the premise that the most important task before us is to reweave the social fabric. People in disorganized neighbourhoods need to grow up enmeshed in the loving relationships that will help them rise. The elites need to be reintegrated with their own countrymen. .....Only loving relationships transform lives, and such relationships can be formed only in small groups. Thus, I’d use my imaginary billion to seed 25-person collectives around the country.....The collectives would hit the four pressure points required for personal transformation:

Heart: By nurturing deep friendships, they would give people the secure emotional connections they need to make daring explorations.

Hands: Members would get in the habit of performing small tasks of service and self-control for one another, thus engraving the habits of citizenship and good character.

Head: Each collective would have a curriculum, a set of biographical and reflective readings, to help members come up with their own life philosophies, to help them master the intellectual virtues required for public debate.

Soul: In a busy world, members would discuss fundamental issues of life’s purpose, so that they might possess the spiritual true north that orients a life.
social_fabric  David_Brooks  philanthropy  moguls  high_net_worth  Warren_Buffett  elitism  collectives  personal_transformation  plutocracies  plutocrats  disorganization  daring  relationships  emotional_connections  soul  North_Star  virtues  engaged_citizenry  civics  Jewish  biographies  friendships  self-reflective  giving 
june 2017 by jerryking
The ‘Warren Buffett of Brazil’ Behind the Offer for Unilever
FEB. 17, 2017 | The New York Times | by LIZ MOYER.
Profile of Jorge Paulo Lemann.

Mr. Lemann, 77, a Harvard-educated former Brazilian tennis champion, ranks 19th on the Forbes list of world billionaires, with a fortune estimated at $29 billion. He and his partners at 3G have developed over the years what many call a playbook for extracting costs from companies by eliminating frivolities like corporate-owned aircraft and expensive office space, revamping management and slashing jobs.

They instill strict austerity that forces managers to justify expenses beyond basic operating needs. Their model makes expansion overseas crucial for increasing returns.

They have also focused on major consumer brands rather than on diversifying......Mr. Lemann and Mr. Buffett share a similar investment philosophy: patience. Instead of selling his portfolio after he has cut and remodeled companies, Mr. Lemann has used Anheuser-Busch InBev and now Kraft Heinz as base camps for further global expansion.
3G_Capital  private_equity  Brazilian  patience  Unilever  Kraft_Heinz  Harvard  moguls  high_net_worth  cost-cutting  Warren_Buffett  playbooks 
february 2017 by jerryking
Where the World’s Wealthiest Invest Their Billions
FEB. 19, 2017 | New York Times | By PAUL SULLIVAN.

Being part of the global billionaire class is beyond the imagination of most people. At the threshold of $1 billion, a 5 percent return would yield an annual interest payment of $50 million — without ever touching the principal. But how billionaires, from those in the single digits to near the top, invest shows a range of options for the very wealthiest in the world. One thing they all have in common is a large amount of money in cash or equivalently liquid securities.
moguls  high_net_worth 
february 2017 by jerryking
Why You Might Not Want to Take Away a Billionaire’s Money - The New York Times
Jeff Sommer
STRATEGIES FEB. 19, 2017
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expropriations  moguls  high_net_worth  income_inequality 
february 2017 by jerryking
Auction houses embracing digital technology to sell to the new global rich
SEPTEMBER 18, 2014 by: John Dizard.

....The auction houses have been under pressure to adapt to this changing universe. While the most visible aspect of the houses’ digital revolution may be their online auctions, the most essential is in the systematising and networking of their customer, market and lot information. Without that, the auctioneers would lose control of their ability to charge gross margins in the mid-teens as intermediaries of the $30bn global art auction market....Within the quasi-duopoly of Christie’s and Sotheby’s at the top of the auction world, Christie’s has now moved to implement what it calls its “digital strategy”....Christie’s now has James Map (as in founder James Christie), a sort of private internal social network that allows specialists, client service staff, support staff and executives to see what is known about a client and his tastes. Past auction records, relatives’ purchases and sales, statistical inferences on how likely clients are to move from buying an expensive watch online to participating in a high-end evening sale – it all can be in the mix.

The idea, Murphy explains, was “to create an internal app that spiders into our database of information and brings up on our internal [screen] environment lots of connectivity. This is faster and better than the email chains [that it replaced].”....This summer, Sotheby’s announced a partnership with eBay, the online auction giant. While the details of the partnership are still being developed, it is understood eBay will distribute live Sotheby’s auctions to its global audience of 150m buyers.

Ken Citron, Christie’s head of IT

The digital strategy is also making it easier to take part in auctions. Even with all the unseen know-your-customer checks now required by financial supervisory agencies, it has become much faster and easier to register as an auction house client. About half now do so online.

But while the online revolution may have left some auction houses behind, for others it is generating new business. Auction houses used to regard the sale of smaller, cheaper objects from, for example, estate liquidations as an annoying loss-leader business that just wasted their specialists’ time. Now, however, many are making money selling objects for $2,000-$3,000; it’s just a matter of cutting transaction costs. “We have a new app with which you can take a picture, push a button, and it goes to a specialist, with a description. Then the specialist can decide if it might fit into an auction,” says Citron.
auctions  Sotheby's  Christie's  data  art  collectors  high_net_worth  partnerships  eBay  duopolies  digital_strategies  CRM  IT  margins  intermediaries  internal_systems  loss-leaders  transaction_costs  cost-cutting  know_your_customer  Bottom_of_the_Pyramid  estate_planning  liquidity_events  online_auctions  digital_revolution 
november 2016 by jerryking
Pamela Joyner: collector of ‘Afropolitan abstraction’
SEPTEMBER 30, 2016 | FT| by Julie Belcove.

.....Joyner and Giuffrida are not merely acquisitive in the vein of so many collectors but are activist. “We think of ourselves as stewards of their careers,” Joyner says of their artists. “Our philanthropy is focused on getting works of the artists who we support into museums....Joyner and Guiffrida donate paintings to leading museums in the UK and the US. Joyner introduces those museum curators to talented-but-lesser-known artists for whom she advocates. She also organizes trips domestically and internationally (.e.g South Africa) for museum curators....Joyner and Guiffrida created an artist’s residency on their property in Sonoma, California, in 2014.....Artists return the loyalty and remark that Joyner and Guiffrida never ask for a discount....Joyner has made collecting — and sitting on boards — her primary occupation. “Now I have a strategy, I have a budget,” she says. “I run it like you’d expect an MBA to run it.”...“Race is a really bad lens through which to view art. I could make an argument that Zander Blom is far more African than I am.”....“I was really struck by these artists who were determined to create an aesthetic that was compelling to them, which was abstraction, and there were no rewards for that if you were an African-American artist at the time,” Joyner says. “The traditional art world expected African-American artists to create identifiably black subject matter. ....The daughter of two public school teachers, Joyner, 58, grew up on the South Side of Chicago, where she attended the prestigious University of Chicago Laboratory Schools and frequented the Art Institute of Chicago. A serious ballet dancer, Joyner took a year off from Dartmouth College to try to break into the professional ranks in New York. “What I discovered was, I was really average,” she says frankly. “That was a good thing to discover early. I decided at that juncture that I would become a patron of the arts.”

Patronage requires money, so Joyner went on to Harvard Business School, then a successful career in finance.....With 300 to 400 artworks by roughly 100 artists, among them contemporary masters Glenn Ligon, Julie Mehretu, Mark Bradford and Kara Walker, the collection is the subject of a new book, Four Generations: The Joyner/Giuffrida Collection of Abstract Art, written by a Who’s Who of top curators. In October 2017, a travelling exhibition of the collection’s highlights will open at the Ogden Museum of Southern Art in New Orleans.
art  collectors  women  African-Americans  curators  Diaspora  artists  museums  philanthropy  marginalization  leadership  patronage  high_net_worth  benefactors  cultural_literacy  Afropolitan  activism  race  HBS  abstractions  books  stewardship  Pamela_Joyner  contemporary_art  champions 
october 2016 by jerryking
Righting Wrongs and Generating Attention for Art of the African Diaspora
OCT. 16, 2016 | The New York Times | By TED LOOS.

A profile of Pamela J. Joyner, a prolific art collector and supporter of artists of African descent..... Later, Ms. Joyner donated money to buy another Gilliam, “Whirlirama” (1970), and next year there are plans to exhibit both when the Met reinstalls its modern collection. “Pamela is such an informed champion of her artists,” Ms. Wagstaff said.

That trip to Washington was one of the many ways that Ms. Joyner, 58, exerts her power as an art-world influence behind the scenes. She has relinquished a successful business career to become what she calls a full-time “mission-driven” collector of a very specific niche: Abstract art by African-Americans and members of the global African diaspora. Now she leverages her relationships with the Met in New York, the Tate in London, the Art Institute in Chicago and the San Francisco Museum of Modern Art to help these artists gain traction in the wider world.

“It’s no less ambitious than an effort to reframe art history,” said Ms. Joyner, who sees herself as righting a wrong. “First, to include more broadly those who have been overlooked — and, for those with visibility, to steward and contextualize those careers.”....“There was a keen sense in my household that you had to be prepared for whatever was going to happen,” Ms. Joyner said. “You needed these literacies, and cultural literacy was one of them.”
African-Americans  Diaspora  art  artists  collectors  museums  overlooked  philanthropy  leadership  patronage  high_net_worth  benefactors  cultural_literacy  women  marginalization  Pamela_Joyner  stewardship  reframing  mission-driven  champions  art_history  exclusion  prolificacy 
october 2016 by jerryking
Ultra-rich man’s letter: “To My Fellow Filthy Rich Americans: The Pitchforks Are Coming” – TIP
Ultra-rich man’s letter: “To My Fellow Filthy Rich Americans: The Pitchforks Are Coming”

By NICK HANAUER | politico

You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I’m no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can’t even imagine. Multiple homes, my own plane, etc., etc. You know what I’m talking about. In 1992, I was selling pillows made by my family’s business, Pacific Coast Feather Co., to retail stores across the country, and the Internet was a clunky novelty to which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back then, that many of my customers, the big department store chains, were already doomed. I knew that as soon as the Internet became fast and trustworthy enough—and that time wasn’t far off—people were going to shop online like crazy. Goodbye, Caldor. And Filene’s. And Borders. And on and on.

Realizing that, seeing over the horizon a little faster than the next guy, was the strategic part of my success. The lucky part was that I had two friends, both immensely talented, who also saw a lot of potential in the web. One was a guy you’ve probably never heard of named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the potential of the web that I told both Jeffs that I wanted to invest in whatever they launched, big time. It just happened that the second Jeff—Bezos—called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started a web department store called Cybershop, but at a time when trust in Internet sales was still low, it was too early for his high-end online idea; people just weren’t yet ready to buy expensive goods without personally checking them out (unlike a basic commodity like books, which don’t vary in quality—Bezos’ great insight). Cybershop didn’t make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.

But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?

I see pitchforks.

At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.

But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.

And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.

If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.

_h3218_w4866_m2_bwhite(Image: news.msn)


Many of us think we’re special because “this is America.” We think we’re immune to the same forces that started the Arab Spring—or the French and Russian revolutions, for that matter. I know you fellow .01%ers tend to dismiss this kind of argument; I’ve had many of you tell me to my face I’m completely bonkers. And yes, I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.

The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labor to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts.

What a great idea. My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.

It’s when I realized this that I decided I had to leave my insulated world of the super-rich and get involved in politics. Not directly, by running for office or becoming one of the big-money billionaires who back candidates in an election. Instead, I wanted to try to change the conversation with ideas—by advancing what my co-author, Eric Liu, and I call “middle-out” economics. It’s the long-overdue rebuttal to the trickle-down economics worldview that has become economic orthodoxy across party lines—and has so screwed the American middle class and our economy generally. Middle-out economics rejects the old misconception that an economy is a perfectly efficient, mechanistic system and embraces the much more accurate idea of an economy as a complex ecosystem made up of real people who are dependent on one another.

Which is why the fundamental law of capitalism must be: If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.

On June 19, 2013, Bloomberg published an article I wrote called “The Capitalist’s Case for a $15 Minimum Wage.” Forbes labeled it “Nick Hanauer’s near insane” proposal. And yet, just weeks after it was published, my friend David Rolf, a Service Employees International Union organizer, roused fast-food workers to go on strike around the country for a $15 living wage. Nearly a year later, the city of Seattle passed a $15 minimum wage. And just 350 days after my article was published, Seattle Mayor Ed Murray signed that ordinance into law. How could this happen, you ask?

It happened because we reminded the masses that they are the source of growth and prosperity, not us rich guys. We reminded them that when workers have more money, businesses have more customers—and need more employees. We reminded them that if businesses paid workers a living wage rather than poverty wages, taxpayers wouldn’t have to make up the difference. And when we got done, 74 percent of likely Seattle voters in a recent poll agreed that a $15 minimum wage was a swell idea.

The standard response in the minimum-wage debate, made by Republicans and their business backers and plenty of Democrats as well, is that raising the minimum wage costs jobs. Businesses will have to lay off workers. This argument reflects the orthodox economics that most people had in college. If you took Econ 101, then you literally were taught that if wages go up, employment must go down. The law of supply and demand and all that. That’s why you’ve got John Boehner and other Republicans in Congress insisting that if you price employment higher, you get less of it. Really?

The thing about us businesspeople is that we love our customers rich and our employees poor.

Because here’s an odd thing. During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo. CEOs used to earn 30 times the median wage; now they rake in 500 times. Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before. So, too, for financial services workers and technology workers. These folks earn multiples of the median wage, yet we somehow have more and more of them.

140624_fatcats_grid_1160
The Art of the Fat Cat A century and a half of soaking the rich—with ink.
By MATT WUERKER – (politico)

The thing about us businesspeople is that we love our customers rich and our employees poor. So for as long as there has been capitalism, capitalists have said the same thing about any effort to raise wages. We’ve had 75 years of complaints from big business—when the minimum wage was instituted, when women had to be paid equitable amounts, when child labor laws were created. Every time the capitalists said exactly the same thing in the same way: We’re all going to go bankrupt. I’ll have to close. I’ll have to lay everyone off. It hasn’t happened. In fact, the data show that when workers are better treated, business gets better. The naysayers are just wrong.

Most of you probably think that the $15 minimum wage in Seattle is an insane departure from rational policy that puts our … [more]
Accomplisher_Class  economics  feudalism  high_net_worth  income_inequality  middle_class  minimum_wage  politics  social_fabric  the_one_percent  via:enochko  worldviews 
september 2016 by jerryking
The Disrupters: Making New York’s Cultural Boards More Diverse
JULY 30, 2016 | The New York Times| By JACOB BERNSTEIN.

But Dr. Muhammad, the former director of the Schomburg center, cautioned against seeing Mr. Smith’s entry into New York cultural life as a sign that things will change in a meaningful way.

“White people are going to be wealthier on average, wealthier people are going to be in leadership positions more often, and in those positions they’re likely to be part of a network of people in the same social milieu,” Dr. Muhammad said. “There’ll continue to be people like Robert Smith, who happen to be African-American and do wonderful things, but there’s a giant wealth gap between blacks and whites, and it’s only widened in the wake of the great recession. Is this a sign of a trend that black people will be the heads of boards all over the country? I doubt it.”
Darren_Walker  glass_ceilings  African-Americans  high_net_worth  cultural_institutions  boards_&_directors_&_governance  diversity  New_York_City  museums  lawyers  investment_banking  Wall_Street  Harvard  Robert_Smith  racial_disparities 
august 2016 by jerryking
In an Age of Privilege, Not Everyone Is in the Same Boat - The New York Times
By NELSON D. SCHWARTZAPRIL 23, 2016

When top-dollar travelers switch planes in Atlanta, New York and other cities, Delta ferries them between terminals in a Porsche, what the airline calls a “surprise-and-delight service.” Last month, Walt Disney World began offering after-hours access to visitors who want to avoid the crowds. In other words, you basically get the Magic Kingdom to yourself.

When Royal Caribbean ships call at Labadee, the cruise line’s private resort in Haiti, elite guests get their own special beach club away from fellow travelers — an enclave within an enclave....From cruise ship operators and casinos to amusement parks and airlines, the rise of the 1 percent spells opportunity and profit.
income_inequality  social_classes  social_stratification  exclusivity  affluence  luxury  high_net_worth  The_One_Percent  caste_systems  travel  airline_industry  airports  concierge_services  enclaves  theme_parks  Disney  casinos  delighting_customers  top-tier  cruise_ships  Royal_Caribbean 
april 2016 by jerryking
Thane Stenner: Here’s where the wealthy get their investment ‘edge’
Mar. 02, 2016 | The Globe and Mail | THANE STENNER.

They have clear investment goals: High-net-worth individuals are obsessive goal setters. They always know why they’re investing (beyond “to make money”). They reverse-engineer their return objectives to meet both long- and short-term goals.

They know when to delegate: High-net-worth investors are not “do-it-yourself” investors.

They think risk first: High-net-worth individuals are generally focused on wealth protection as much as wealth generation.

It’s business: In general, high-net-worth investors tend to be good at “segregating” their emotions from their investment decisions.

They keep the news in perspective: Most wealthy individuals are news junkies. Of course they listen to, digest, and consider a lot of financial news. But the focus of their attention is on long-term trends, not necessarily up-to-the-minute financial data. And they think very, very carefully before making any decision based on news.

They seize the opportunity in crisis: Most high-net-worth individuals are born contrarians.
high_net_worth  slight_edge  investing  investors  rules_of_the_game  Thane_Stenner  goal-setting  contrarians  reverse_engineering  wealth_protection  kairos  impact_investing  passions  passion_investing  calm  Carpe_diem  Michael_McDerment  thinking_deliberatively  thinking_backwards  work-back_schedules 
march 2016 by jerryking
The Choices That Led Small Business Owners to Wealth - The New York Times
FEB. 12, 2016 | NYT | By PAUL SULLIVAN

have to make decisions to professionalize the business, put systems in place and have a plan that allows them to do longer-term planning. Those decisions can make the difference between being a small-business owner and a business executive with significant wealth....“There is no bright-line test when a company gets to a certain size or age to do these things,” said Kevin M. Harris, head of the family business group at Northern Trust. “It is based on where the company wants to go.”

Determining which decisions were the ones that made the difference is sometimes not an easy task, and the stories that are retold are often the ones that turned out well. Yet it is worth considering what can go wrong.

Entrepreneurs who failed to find success were often resistant to change
small_business  wealth_creation  decision_making  entrepreneur  risk-taking  mindsets  JCK  thinking_tragically  Northern_Trust  owners  private_banking  choices  internal_systems  professionalization  high_net_worth 
february 2016 by jerryking
Hedge Funds’ Idea Man - WSJ
By JULIET CHUNG
Jan. 4, 2016

The 54-year-old Brazilian immigrant is part of a larger ecosystem of consultants who sell their investment beliefs to hedge funds. The funds, hungry for returns or cheap hedges for their portfolios, get fresh ideas that comprise or inform their wagers. The consultants, in exchange, often expect to share in gains tied to their ideas, they and their clients said.....The ideas don’t always result in profits. ...Such arrangements make some veteran investors in hedge funds uneasy.

“If your manager’s renting a lot of ideas, you have to question the value-add they bring to the partnership,” said Chuck Bryceland of New York-based Bessemer Trust, which advises wealthy families and individuals on investments, including in hedge funds. “We want our people generating primary trade ideas and doing the primary work themselves.”
investment_advice  investment_research  ideas  Wall_Street  money_management  private_banking  hedge_funds  shareholder_activism  traders  exclusivity  idea_generation  value_added  financial_advisors  high_net_worth  Bessemer  Bessemer_Trust 
january 2016 by jerryking
When Impact Investing Stays Local - The New York Times
JULY 17, 2015
Photo

Rob Houghton, left, and James Houghton found a way to give some of their wealth back to Corning, N.Y., the town that helped make Corning, their family business, a success. Credit Porter Gifford for The New York Times
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Continue reading the main story
Wealth Matters
By PAUL SULLIVAN
Corning  impact_investing  philanthropy  wealth_management  high_net_worth  family_business 
july 2015 by jerryking
Hedge-Fund Magnate Robert Mercer Emerges as a Generous Backer of Cruz - NYTimes.com
APRIL 10, 2015 | NYT| By ERIC LICHTBLAU and ALEXANDRA STEVENSON.

Mr. Mercer, a reclusive Long Islander who started at I.B.M. and made his fortune using computer patterns to outsmart the stock market, emerged this week as a key early bankroller of Mr. Cruz’s surprisingly fast campaign start.

...Mr. Mercer does not have the name recognition of fellow Republican financiers like the Koch brothers or Sheldon Adelson, but he has spent more than $15 million since 2012 in support of conservative political campaigns and causes, donating to a number of candidates who had never even met him. ....Robert Mercer is discussed in “More Money Than God,” a book about the hedge fund industry by Sebastian Mallaby....Before joining Renaissance Technologies, Mr. Mercer, 68, worked at I.B.M.’s research center, where he specialized in computerized translation of languages.....When James H. Simons, the billionaire founder of the Renaissance hedge fund, hired Mr. Mercer in 1993, the company was more university campus than Wall Street firm. Mr. Simons, a mathematician and former code-breaker for the National Security Agency, brought in astronomers and physicists to analyze reams of data, using computer programs to search for patterns that could be used to inform trading decisions. Mr. Simons has been a major political backer of Democrats, donating $8.3 million in 2014.
hedge_funds  moguls  high_net_worth  Robert_Mercer  Wall_Street  Ted_Cruz  Renaissance_Technologies  books  Citizens_United  James_Simons  PACs 
april 2015 by jerryking
The Chinese Billionaire Zhang Lei Spins Research Into Investment Gold
By ALEXANDRA STEVENSONAPRIL 2, 2015
By ALEXANDRA STEVENSONAPRIL 2, 2015

With an $18 billion war chest, Zhang Lei is one of China’s richest investors.

Starting 10 years ago with $20 million from Yale University’s endowment, Mr. Zhang was an early backer of companies like Tencent and JD.com, businesses that have shaken up traditional industries across China. Now he thinks these companies could stir things up globally.

“China could be one of the engines to this whole global innovation revolution,” Mr. Zhang said in an interview at the Hong Kong office of his firm, Hillhouse Capital Group, in one of the city’s tallest skyscrapers, with sweeping views of Victoria Harbor.

Across the ocean in Silicon Valley, Mr. Zhang represents China’s new entrepreneurial class. He has consulted with the likes of Mark Zuckerberg and Jeff Bezos, and visited with start-ups like Airbnb.
Zhang_Lei  high_net_worth  moguls  investors  MIT  Yale  endowments  Colleges_&_Universities  China  Chinese 
april 2015 by jerryking
How the wealthy can get burned - The Globe and Mail
PAUL BRENT
Special to The Globe and Mail
Published Saturday, Feb. 14 2015
wealth_management  high_net_worth  family_office  parenting 
february 2015 by jerryking
How to Leave a Mark - NYTimes.com
JAN. 27, 2015 | NYT |David Brooks.

Impact investors seek out companies that are intentionally designed both to make a profit and provide a measurable and accountable social good. Impact funds are frequently willing to accept lower financial returns for the sake of doing good — say a 7 percent annual return compared with an 11 percent return. But some impact investors are seeking to deliver market-rate returns....It’s hard to find a reliable way to measure the social impact of these dual-purpose companies. Impact investors have also had trouble finding scalable deals to invest in. It costs as much to do due diligence on a $250 million deal as on a $25 million deal, so many firms would rather skip the small stuff... impact investing is now entering the mainstream. An older generation used their (rigorous) business mind in one setting and then their (often sloppy) charity mind in another. Today more people want to blend these minds. Typically a big client, or a young heir, will go to his or her investments adviser and say, “I want some socially useful investments in my portfolio.”...Impact investing is not going to replace government or be a panacea, but it’s one of a number of new tools to address social problems. If you want to leave a mark on the world but are unsure of how to do it, I’d say take a look. If you’re a high-net-worth individual (a rich person), ask your adviser to get you involved. If you’re young and searching, get some finance and operational skills and then find a way to get involved in a socially useful investment proposition. If you’ve got a business mind, there are huge opportunities to build the infrastructure (creating measuring systems, connecting investors with deals).
David_Brooks  capitalism  impact_investing  hard_to_find  Michael_McDerment  high_net_worth  new_graduates  skills  passions  passion_investing  TBL  social_impact  measurements  high-impact  heirs 
january 2015 by jerryking
The Art World’s High-Roller Specialist - WSJ - WSJ
Nov. 6, 2014 | WSJ | By KELLY CROW.

Ms. Xin is a leading player in the art business’s central game right now: a race to match a small number of $10 million-plus masterpieces with a small number of mega-collectors, who are increasingly coming from Asia.

Ms. Xin is one of the latest auction stars to emerge amid this high-stakes backdrop. Her profile rocketed after she helped her contemporary-art clients place bids or win half of Christie’s top 10 priciest works in May. Nearly 6 feet tall, she was easy to spot standing between colleagues in the saleroom’s phone banks, wielding three cellphones at a time and lobbing bids at a regular clip. By sale’s end, she helped her Chinese clients win as much as $236 million of art. François Curiel, a four-decade veteran of the firm, said he’s never seen one specialist account for that large a haul in a sale.

Ms. Xin’s quick ascent comes amid China’s expanding clout on the global art stage. Most specialists are art experts who build up a career doggedly over decades. Ms. Xin, however, never saw a work of art until she was 19. But since she joined the auction business nearly seven years ago, she has homed in on finding masterpieces—and collectors who could afford them.
art  art_advisory  auctions  China  Chinese  Christie's  collectibles  collectors  economic_clout  high_net_worth  match-making  Sotheby's 
november 2014 by jerryking
This Man's Job: Make Bill Gates Richer - WSJ
By ANUPREETA DAS and CRAIG KARMIN CONNECT
Sept. 18, 2014

Surprisingly, Mr. Gates has few technology-related investments. As of June 30, he held a 3.6% stake in Microsoft, worth about $13.9 billion based on Thursday's closing stock price.

Mr. Gates makes his own tech and biotech investments, which aren't held by Cascade. He started digital-image company Corbis Corp. in 1989. Smaller investments include stakes in nuclear-reactor developer TerraPower LLC and meat-substitute maker Beyond Meat.

Mr. Gates is updated on all the other investments every other month. "At the end of the day, all decisions go through Michael," says Mike Jackson, chairman and CEO of AutoNation, who considers Mr. Larson a friend. Mr. Larson is a director of the auto retailer, and Cascade owns a 14% stake in AutoNation valued at about $841 million.

Mr. Gates decided to hire Mr. Larson after the Journal reported in 1993 that the entrepreneur's money manager at the time had previously been convicted of bank fraud. ....After an extensive screening process, a recruiter invited Mr. Larson to meet Mr. Gates. The money manager had worked for a mergers-and-acquisitions firm and run bond funds for Putnam Investments, now a subsidiary of Canadian insurer Great-West Lifeco , Inc., before striking out on his own.
billgates  high_net_worth  money_management  AutoNation  family_office  wealth_management  real_estate  investing  personal_relationships  networking 
september 2014 by jerryking
Referendum in Scotland, Dissected by Investor - NYTimes.com
SEPT. 12, 2014 | NYT | By JAMES B. STEWART.

"Some voters are very emotional," said Sir Tom Hunter, photographed outside Edinburgh Castle. "But I’m a businessman. I’m passionate, but I’m trying to look at the facts.”

"Scotland's Decision," online book published by the David Hume Institute
----------------------------------------
Fortunately for anyone who cares about the issues, as opposed to the passions, of Scottish independence, Sir Tom Hunter has come to the rescue. Mr. Hunter is often described in the news media as the country’s “first homegrown billionaire,” though he told me when I reached him there this week, “I never coined that phrase.” Last month, his foundation published a book online called “Scotland’s Decision.”

“This started as a private effort to educate me and my family,” Mr. Hunter said. “This decision is too important to leave to the politicians.” So he went to an array of experts and asked them to address 16 questions, starting with what effect independence would have on the economy. He said he didn’t want to rely on people with personal stakes in the outcome or who had already chosen sides.

“The answers started coming in,” he said, “and I thought, why not make this available to everyone? I’m not trying to influence people. I’m trying to educate them. Some voters are very emotional. Everyone is different, and that’s democracy. But I’m a businessman. I’m passionate, but I’m trying to look at the facts.”...Mr. Hunter said he read everything by Mr. Carnegie, including his famous call to philanthropy, “The Gospel of Wealth.”
Scotland  United_Kingdom  independence  philanthropy  high_net_worth  moguls  entrepreneur  David_Hume 
september 2014 by jerryking
Video - Five Things Rich People Know That You Don't, General Strict Financial Discipline - WSJ.com
(1) Start early. RRSP Save, save, save.
(2) Automate set up automatic payroll contributions to feed retirement funds
(3) Maximize those contributions. Save like you mean it.
(4) Never carry credit credit card balances. Pay off credit bill every month.
(5) Live like your poor. Rein in spending habits. Stay away from the mall. Unsubscribe from retail e-mails.
web_video  high_net_worth  wealth_creation  personal_finance  frugality  habits  self-discipline  savings 
july 2014 by jerryking
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