Several years ago I asked a colleague “What do you need to retire?”
His answer: “$5 million and playmates.”
Playmates?
What he meant was having enough leisure-time folks to hang out with during the day.
So, about the “magic number” …
Several years ago I asked a colleague “What do you need to retire?”
His answer: “$5 million and playmates.”
Playmates?
What he meant was having enough leisure-time folks to hang out with during the day.
So, about the “magic number” …
According to the Census Bureau’s “American Community Survey” …
The five richest counties in the United States are all suburbs of Washington, D.C.
Loudoun County, VA tops the list … the median household income there is $125,672.
As a benchmark, the median household income in the U.S. $55,322.
Following close behind Loudoun are:
New York, New Jersey and California have a total of 8 counties on the top 20 list.
Here’s the full list …
My View: Bezos changed the world; Buffett, not so much.
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According to Bloomberg:
Jeff Bezos, founder and CEO of Amazon, is now the second richest person on the planet.
His $76.7 billion personal fortune puts him ahead of Warren Buffett and gaining on Microsoft co-founder Bill Gates.
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Here’s what I find interesting about the Top 10 list …
Yesterday, we posted that there are about 1,800 billionaires in the world and that about 2/3s of them are self-made … not just born lucky.
According to a PwC study, the self-made billionaires usually started at a big company, some were fired from the big companies, and most became serial entrepreneurs.
Usually they got on the map with their first or second venture, but built their wealth through a series of successive (and highly successful) ventures.
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The PwC study also identified 5 traits that were relatively common across the self-made billionaires.
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Broadly speaking, PwC says concludes that most business managers are “performers” – linear logicians who are good at execution .
The self-made billionaires are “producers” who look at the world from different angles — allowing them to spot opportunities and to turn good ideas into great businesses.
More specifically, the PxC team concluded that “most self-made billionaires – the “producers” –practice five habits of mind — ways of thinking and acting that generate uncommonly effective ideas and approaches to leadership.”
The 5 traits:
1. Ideas: Empathetic Imagination
The producers typically worked in their field long enough to have an awareness of critical trends, empathy for customers, and knowledge of existing practices. Then, they added a healthy dose of imagination to change the game.
2. Time: Patient Urgency
“The creation of massive value in an industry does not happen overnight. The billion-dollar idea often comes after years, even decades, of commitment to a market space. Skilled producers learn to be patient. They know how to wait for the right idea at the right time. But once they hit on a compelling idea, they have a bias toward action that compels them to take urgent steps.
3. Action: Inventive Execution
Many executives take product design and go-to-market strategies as givens. “The business model, pricing, functions, sales pitch, and deal structure are treated as inherited, predefined by the models, costs, and pricing that already exist in the company and industry.“
Producers redesign opportunities everywhere – both in the product – broadly defined – and the implementation.
4. Risk: Relative, Not Absolute
“Producers, in general, are distinguished not by the level of risk they take, but by their attitude about risk. Most people measure risk in absolute terms: Will this business succeed or fail? Producers view risk in relative terms: Which option presents the greatest opportunity? If the opportunity is right in a risky venture, they’ll look for ways to mitigate risk”
5. Leadership: Teaming with Performers
“The idea of the solo genius is so pervasive in the way people talk about and think about extraordinary success that it obscures the real story of how good ideas become great businesses. Self-made billionaires are not alone. Producers have the ability to see beyond the parameters of what exists today to imagine new opportunities. Performers, in turn, have the ability to optimize and achieve within known parameters. Value creation requires both.”
Producers surround themselves with producers …
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Bottom line:
Yeah, wealth distribution is skewed. No argument there.
But, it’s wildly misleading to characterize the richest of the rich as folks who were just born lucky.
The majority of the made their own luck … and earned their wealth.
Sorry, if the facts don’t match the popular narrative …
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Tomorrow, take the Producer Quiz …
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#HomaFiles
Follow on Twitter @KenHoma >> Latest Posts
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With all of the vitriol now being cast at rich people, and with all of the broad-brush policy proposals to redistribute their wealth … you’re probably guessing a pretty big number, right?
Well, Forbes reports about 1,800 billionaires worldwide … holding $7 trillion… or roughly 7% of the total global gross domestic product.
1.800 isn’t a particularly big number, right?
But, even I concede, they skew the distribution of wealth.
The billionaires always seem to get caricatured as Saudi princes, one of Sam Walton’s descendants or Paris Hilton – all just lucky by birth and clearly undeserving.
Well, PwC’s think tank dug deeper into the numbers and uncovered some facts that tend to disrupt the popular narrative …
The most recent Census Bureau data … sorts households by income quintile … the highest quintile are “rich” households and the lowest quintile are “poor” households.
A fundamental conclusion drawn from the data: if you want to be rich, it helps to have a job and be married to someone who has one, too.
Let’s dive into some of the details …
According to a CNBC summary of a study published in the Journal Psychological Science …
The richer you are, the more likely you are to think that others are wealthy, too.
According to the study’s authors, the reason for the misconception is simple …
Previously, we posted that there are about 1,800 billionaires in the world and that about 2/3s of them are self-made … not just born lucky.
According to a PwC study, the self-made billionaires usually started at a big company, some were fired from the big companies, and most became serial entrepreneurs.
Usually they got on the map with their first or second venture, but built their wealth through a series of successive (and highly successful) ventures.
=====
The PwC study also identified 5 traits that were relatively common across the self-made billionaires.
======
Broadly speaking, PwC says concludes that most business managers are “performers” – linear logicians who are good at execution .
The self-made billionaires are “producers” who look at the world from different angles — allowing them to spot opportunities and to turn good ideas into great businesses.
More specifically, the PxC team concluded that “most self-made billionaires – the “producers” –practice five habits of mind — ways of thinking and acting that generate uncommonly effective ideas and approaches to leadership.”
The 5 traits:
1. Ideas: Empathetic Imagination
The producers typically worked in their field long enough to have an awareness of critical trends, empathy for customers, and knowledge of existing practices. Then, they added a healthy dose of imagination to change the game.
2. Time: Patient Urgency
“The creation of massive value in an industry does not happen overnight. The billion-dollar idea often comes after years, even decades, of commitment to a market space. Skilled producers learn to be patient. They know how to wait for the right idea at the right time. But once they hit on a compelling idea, they have a bias toward action that compels them to take urgent steps.
3. Action: Inventive Execution
Many executives take product design and go-to-market strategies as givens. “The business model, pricing, functions, sales pitch, and deal structure are treated as inherited, predefined by the models, costs, and pricing that already exist in the company and industry.“
Producers redesign opportunities everywhere – both in the product – broadly defined – and the implementation.
4. Risk: Relative, Not Absolute
“Producers, in general, are distinguished not by the level of risk they take, but by their attitude about risk. Most people measure risk in absolute terms: Will this business succeed or fail? Producers view risk in relative terms: Which option presents the greatest opportunity? If the opportunity is right in a risky venture, they’ll look for ways to mitigate risk”
5. Leadership: Teaming with Performers
“The idea of the solo genius is so pervasive in the way people talk about and think about extraordinary success that it obscures the real story of how good ideas become great businesses. Self-made billionaires are not alone. Producers have the ability to see beyond the parameters of what exists today to imagine new opportunities. Performers, in turn, have the ability to optimize and achieve within known parameters. Value creation requires both.”
Producers surround themselves with producers …
=====
Bottom line:
Yeah, wealth distribution is skewed. No argument there.
But, it’s wildly misleading to characterize the richest of the rich as folks who were just born lucky.
The majority of the made their own luck … and earned their wealth.
Sorry, if the facts don’t match the popular narrative …
=====
#HomaFiles
Follow on Twitter @KenHoma >> Latest Posts
=====
With all of the vitriol now being cast at rich people, and with all of the broad-brush policy proposals to redistribute their wealth … you’re probably guessing a pretty big number, right?
Well, Forbes reports about 1,800 billionaires worldwide … holding $7 trillion… or roughly 7% of the total global gross domestic product.
1.800 isn’t a particularly big number, right?
But, even I concede, they skew the distribution of wealth.
The billionaires always seem to get caricatured as Saudi princes, one of Sam Walton’s descendants or Paris Hilton – all just lucky by birth and clearly undeserving.
Well, PwC’s think tank dug deeper into the numbers and uncovered some facts that tend to disrupt the popular narrative …
The most recent Census Bureau data … sorts households by income quintile … the highest quintile are “rich” households and the lowest quintile are “poor” households.
A fundamental conclusion drawn from the data: if you want to be rich, it helps to have a job and be married to someone who has one, too.
Let’s dive into some of the details …
Stanley Kurtz is a senior fellow at the Ethics and Public Policy Center and author of the new book, “Spreading the Wealth: How Obama Is Robbing the Suburbs to Pay for the Cities”.
His central premise was summarized in Forbes:
In the eyes of the leftist community organizers, suburbs are instruments of bigotry and greed — a way of selfishly refusing to share tax money with the urban poor.
To reverse the trend, some groups advocate systematically redistributing the wealth of America’s suburbs to the cities via “regional tax-base sharing,” a practice by which suburban tax money is directly redistributed to nearby cities and less-well-off “inner-ring” suburbs.
President Obama has lent the full weight of his White House to the efforts.
A federal program called the Sustainable Communities Initiative, for example, has salted planning commissions across the country with “regional equity” and “smart growth” as goals.
These are, of course, code words.
“Regional equity” means that, by their mere existence, suburbs cheat the people who live in cities.
It means, “Let’s spread the suburbs’ wealth around” – i.e., take from the suburbanites to give to the urban poor.
“Smart growth” means, “Quit building sub-divisions and malls, and move back to where mass transit can shuttle you between your 800 square foot apartment in an urban tower and your downtown job.”
Suburbs are for sellouts: That is a large and overlooked theme of Obama’s famous memoir, Dreams from My Father. The city is the moral choice.
He attributed urban decline to taxpayer “flight” to the suburbs.
So, compulsory redistribution of suburban tax money to cities was the only lasting solution to urban decay.
Interesting op-ed in the WSJ …
Punch line: For the most part, the wealthy bust their tail, work 60-80 hour weeks building some game-changing product for the mass market, but at the end of the day they can’t enjoy much that the middle class doesn’t also enjoy. Where’s the fairness?
Just about every product or service that makes our lives better requires a mass market or it’s not economic to bother offering.
Those who invent and produce for the mass market get rich.
And the more these innovators better the rest of our lives, the richer they get but the less they can differentiate themselves from the masses whose wants they serve.
Why is that?
Because practically all folks have access to low cost technology (think cell phones), fashions (think retro Air Jordans) and travel (think annoying but economic air travel).
Ken’s Take: Apparently the former hedge fund manger who wrote the article has forgotten that many of the super-rich didn’t amass their wealth by “inventing and producing products for mass markets” …. but, rather, got rich by, well, running hedge funds and derivative operations.
According to a recent report cited by the Mankiw Blog …
Those folks in the top 1/10% – the super-rich – are:
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Ken’s Take: Over 75% make their money the old fashioned way … they earn it.
Thanks to Tags for feeding the leading
Several years ago I asked a colleague “What do you need to retire?”
His answer: “$5 million and playmates.”
Playmates?
What he meant was having enough leisure-time folks to hang out with during the day.
Related to his “magic number” … the WSJ asked some millionaires the question: “At what magic number did you consider yourself wealthy?”
Are we there yet?
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The Point:
Unlike the President, the millionaires don’t confuse “stocks & flows” … they calibrate their “wealth” by savings (a balance sheet item) not by income (obviously, an income statement item).
Also note some simple arithmetic: if a guy makes $250,000 annually and saves / invests 10% each year … and makes 10% after tax on his investments … it’s takes almost 20 years to reach the million-dollar wealth threshold.
Would somebody please mention that to the President?
Excerpted from Forbes: “The Top 10 Richest”, October 06, 2008
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This year the 10 richest tycoons on The Forbes 400 could buy the bottom 175.
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William H. Gates III $57 billion
Warren Buffett $50 billion — Investments.
Lawrence Ellison $27 billion — software, Oracle.
Jim C. Walton $23.4 billion
S. Robson Walton $23.3 billion
Christy Walton & family $23.2 billion
Alice Walton $23.2 billion
Michael Bloomberg $20 billion — financial services
Charles Koch $19 billion
David Koch $19 billion
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Full article:
http://www.forbes.com/forbes/2008/1006/046.html?partner=alerts
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