Studies of the super-rich

By David MacGregor, December 12, 2007 @ 2:53 pm

In 1956, Frank Sinatra sang Cole Porter’s song ‘Who Wants to be a Millionaire?’ in the movie High Society. What most of us won’t realise that the response to the question is “I don’t”. These days, having a million is hardly going to include you in ‘high society’. As a matter of fact it isn’t enough to buy a little fixer-upper in Devonport or Ponsonby. That’s inflation for you.

Being a billionaire is where the action is now. Anything less is, well … less. According to the annual review of real wealth run by Forbes magazine, aka The Capitalist Tool, the world has 946 billionaires, including 178 who are new to the list. Billionaires come from all over the world: Russia, India, China, Spain, Cyprus, Oman, Romania, Serbia … we even have a few of our own, topped by Graeme Hart, who Forbes estimates has a net worth of US$2.7 billion—not bad for a former tow truckie.

The average billionaire is 62 years old. Sixty percent are self-made.

Brent Taylor is a Taranaki-born, Melbourne-based market researcher who has made a study of this group, The Outsider’s Edge: The Making Of Self-made Billionaires. From published sources he analysed a sample of 17 self-made billionaires whose fortunes were found in categories as diverse as media and entertainment (Oprah Winfrey, Steve Jobs, Steven Spielberg, Bernie Ecclestone), technology (Bill Gates, Jobs again, Larry Ellison) and everything (Richard Branson).

The book’s hypothesis is that self-made billionaires are typically outsiders. They are driven by their experiences in childhood. Many were migrants, the classic outsider marker. Many were geeky oddballs like Bill Gates and Steven Spielberg. The book begins with mini biographies of each. I found this part of the book interesting. I guess I am biased towards knowing the ‘why’ as much of the ‘what’ in a story. The bios are brief and insightful. I found Bernie Ecclestone and David Geffen to be the most interesting characters—both are complete and utter bastards by the sound of things. Neither has a namby-pamby, politically correct bone in his body. Ecclestone is the man who took Formula One racing from being a clubbish sport of the idle rich to an international media spectacle and travelling circus, over which he has exerted almost complete control and earned a massive fortune. Says Taylor: “Ecclestone learned many important lessons, but in particular he learned the world was a hostile place and that there are three types of people—those that are for him, those that are against him, and those that are irrelevant.”

The second part of the book is Taylor’s analysis of the characteristics of the self-made mega-rich. I found this part less satisfying or enjoyable. I actually wondered what I was supposed to do with the information, which is the book’s flaw: it isn’t positioned as a business book as such or a book about psychology. Neither fish nor fowl. My guess is that some readers will want be given some tips for acquiring wealth.

The bottom line is you need to have a tough childhood and learn to be good at trading. Which isn’t helpful if your upbringing was a variation of The End of the Golden Weather.

Reading The Outsider’s Edge also reminded me of one of my favourite books about these matters, The Secret to Money is Having Some, by Stuart Wilde. Come to think of it, that book hasn’t helped me either.

I’ll stick with my business plan: buying Lotto tickets and crossing my fingers.

David MacGregor is a co-founder of Idealog

Originally published in Idealog #13, page 81