In his book “Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich” (Three Rivers Press, 2008), Wall Street Journal wealth columnist Robert Frank describes a parallel America – not a location you could find on a map, but a place you move to as you move up through millionaire or billionairedom.
While the rest of America worries about foreclosure, health-care coverage, gas prices and employment, denizens of Richistan worry about managing household staffs, the size of their neighbor’s house or yacht and who will chair the Red Cross charity ball in Palm Beach.
Frank asked one yacht owner whether he was worried about rising fuel costs.
“So it costs me $60,000 to fill up instead of $40,000,” the yachtsman said. “That’s nothing for a boat that costs $5 million a year to maintain.”
Frank’s goal is not so much to deliver social commentary or analysis, but more to lead a guided tour of Richistan. He tells us that Richistan is divided into four parts: Lower (7.5 million households with a net worth up to $10 million), Middle (more than 2 million households with a net worth between $10 and $100 million), Upper (thousands of households with a net worth from $100 million to $1 billion) and Billionaireville (over 400 households, up from 13 in 1985).
What’s striking is the number of multimillionaire households that has surfaced even through the dot-com bubble, 9/11 and the Iraq war. Very few of them draw from inherited money. The vast majority are entrepreneurs or money managers who have tapped into the global river of money flowing around the world.
One of the hottest jobs in America is household manager, basically a butler with Excel and technology skills. Frank reports that household managers certified through programs like Starkey International Institute for Household Management learn where to find 1,020-thread-count sheets, how to have an order of Ben & Jerry’s ice cream sent to a yacht at midnight and that they must not use first names with their employers. Starting salaries range from $80,000 to $120,000 with free room and board at the mansion.
For all this pampering, Richistanis are a driven and worried lot, fearful of germs, stock market crashes and whether they are keeping up with their peer group. The fear of falling behind is ever-present as the denizens of Upper Richistan outstrip the others. Most Richistanis claim that they would need to have approximately twice their present net worth to feel secure. Some acquire a great deal of debt to keep up in a world where BMWs are considered common and $300,000-plus Rolls Royces and Bentleys are de rigueur, where Cartier is ho-hum and Franck Muller is the watch to own. Richistanis worry about their children, also – whether they will be capable human beings or spend the family fortune recklessly.
Frank quotes Cornell economist Robert H. Frank, who claims that the gap between the rich and everyone else has left America less happy, since happiness depends primarily on relative, not absolute wealth. This is true for inhabitants of Richistan as well as for those below the million dollar net worth mark.
In the last chapter, Frank compares attendees at a yacht show being wined, dined and air conditioned as they browse the latest features in luxury yachts at the Bahia Mar Marina in Fort Lauderdale while just a short distance away other Florida residents swelter in shelters after having lost homes in the wake of Hurricane Wilma.
Well, Frank concludes, quoting Andrew Carnegie, we can only hope that some of these newly minted Richistanis will use their fortunes to elevate the entire race.
“Richistan” is available at the Los Altos Library.