Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich

Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich | Robert Frank | Entertaining but little else

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Richistan: A Journ...

	Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich Robert Frank Three Rivers Press, 2008 - 288 pages average customer review:based on 60 reviews view larger image
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highly recommended

THE NEW YORK TIMES BESTSELLER

RICH-I-STAN n. 1. a new country located in the heart of America, populated entirely by millionaires, most of whom acquired their wealth during the new Gilded Age of the past twenty years. 2. a country with a population larger than Belgium and Denmark; typical citizens include ?spud king? J. R. Simplot; hair stylist Sydell Miller, the new star of Palm Beach; and assorted oddball entrepreneurs. 3. A country that with a little luck and pluck, you, too, could be a citizen of.

The rich have always been different from you and me, but Robert Frank?s revealing and funny journey through ?Richistan? entertainingly shows that they are truly another breed.

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Entertaining look at the super rich

This book was well written, easy to read, entertaining, and funny.

The author hung around places where really rich folks hang out for a year or two, then wrote a book based upon his findings. I can think of a lot worse ways to do research for a book!

The author says the very wealthy are so insulated from the rest of society that they make up their own country within a country.....aka Richistan.

The author divides the millionaire crowd into 3 wealth segments:

Lower Richistan.......$1-10M
Middle Richistan......$10-100M
Upper Richistan.......$100M to $1B

The author reports that as of 2004...the number of millionaire+ households was:

$1M.........9,050,000
$5M.........1,440,000
$10M.........530,000
$25M.........110,000

If we assume there were about (320M population divided by 2) 160M households in the U.S. back in 2004......that means about 6% of U.S. households had millionaire status (9.05M/160M).

The author reported a new rule-of-thumb which I had not heard of before.......that regardless of your wealth level.....you think you need 2X your current wealth level to feel "really wealthy".

I found the section on butler boot camp to be funny. There are so many millionaires needing butlers (or household managers) to take care of their 3 or 4 houses and yachts that demand exceeds supply of butlers. For a mere $12K, you can attend butler boot camp for 8 weeks, and get an average starting pay of $75K.......with a top end pay of $120K. The down side is you have to put up with prima Dona chefs and manage many vendors with an annual operating budget in the $2M range.

I found the section on "performance based philanthropy" interesting. Some entrepreneurs make their fortune then decide to be philanthropists. When they investigate the large, traditional philanthropic organizations.......they find that less than $0.50 of every dollar donated actually does real work for the beneficiaries. Some organizations have tremendous over-head which reduces their efficiency. A few philanthropists decide they can run a more efficient organization......and then up super efficient organizations which then compete against the large traditional organizations.

The section on rich kids points out the age-old difficulty of preventing large family fortunes being spent within 3 generations.

The "who can buy the biggest yacht" section was also entertaining. It seems that to display your super rich status, you need at least a 400 foot long yacht. Of course, the bad news is the regular marinas can't handle a boat that big......so you have to park your trophy yacht out by the rusty ocean going vessels!

The final conclusion of the author is that the U.S. is at risk for another minor social revolution because of the disparity of wealth.....with the top 1% now controlling 33% of the total wealth. He points out the 2 previous social revolutions in the U.S. where in the early 1900's Teddy Roosevelt broke up the large business trusts and the 1930's with FDR and his many New Deal proposals.

Of course, the fact there are disparities in the wealth distribution is not new news. Wilfred Pareto found that in several European countries in the late 1800's and early 1900's.....20% of the population controlled 80% of the wealth. If you check the latest figures for the U.S., you will find Pareto's 80:20 Rule still applies today.

Over-all, this book is easy to read and gives an entertaining view of the world of the citizens of Richistan.

Other books which may help you gain citizenship to Richistan are shown below:

Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pro's
The Richest Man in Babylon
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor
The Millionaire Next Door
The Four Pillars of Investing: Lessons for Building a Winning Portfolio
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition
The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life
The Bogleheads' Guide to Investing

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Entertaining but little else

If you are hoping to glean secrets of how the superwealthy obtained their riches you may be disappointed.
When the author introduces a real life character he does briefly describe the nature of business that made that character rich, but there are no secrets, business strategies, or other helpful concepts you could use to create your own personal vault of money.
That said, there is a number of entertaining stories of wealthy people and how they spend their money. Your inner gossip craver may love that.

A quick read

Of the many "take aways" that I learned from this book is:
1. You need $10 million to be rich in America.
2. Your kids can have a great career, good salary, great locations,
and excellant accomodations by learning to manage the Wealthy's
projects.

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Low Cal Snack

From someone with an economics and finance background, I found the early chapters most interesting. The author compares and contrasts the recent wealth boom (last 10-20 years) to the American wealth booms of the industrial age and the 1920s. However, it is only covered to the level of detail required of poolside reading.

The stories recounted through the remainder of the book were sufficiently interesting to hold my attention against the backdrop of a busy airport. Overall I would rate this book as an enjoyable, low calorie snack.

reviews: page 1, 2, 3, 4, 5, 6, 7, 8, 9, 10

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