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In the old movies, the rich guy is always a big, fat, pissed-off dude who came up from the streets. He makes his fortune through his terrific common sense, enormous energy, and willingness to deal ruthlessly with the competition. He bellows. He bangs his fist.
He gets his way. And then he has children.
It is far easier for a man possessed of drive and talent to make himself into a multimillionaire (or even a billionaire) than it is for this same man to create a lasting dynasty. The generations that stream from him usually consist of dreamers, incompetents, layabouts, wastrels, rascals, aesthetes, and other types who are challenged when it comes to maintaining a fortune.
Those who grow up with great wealth—even the talented and highly intelligent among them—tend to lack the drive to win at all costs, which is a necessary component for anyone who would do battle with capitalism’s giants.
The tendency of wealthy clans to waste away over generations is so exactly described in Thomas Mann’s 1901 novel Buddenbrooks (subtitle: The Decline of a Family) that it goes by the term “Buddenbrooks syndrome.” Academics call it a “generational cohort pattern.” Statisticians call it “regression to the mean.”
Here’s how it goes: Grandpa strikes oil or manufactures the first railroad tie or patents telephony or whatever, and then he capitalizes on it. His competent son works diligently to build the company in the shadow of a charismatic father. But then his son drops out of Bard to become a deejay or a graffiti artist or an artisanal-cannabis chef.
Today’s billionaire has the street smarts and driving ambition of his old-movie counterparts, but he is not fat, for he is on the Paleo Diet. Not that he has any awareness of what he eats: His wife supervises his meals, in consultation with the personal chef. The billionaire sits down to the table, grabs his fork with a hairy hand, and chows down with that outsize billionaire appetite of his.
Can you even think of one fat billionaire on the planet today? I can’t. The Mexican billionaire Carlos Slim Helú, the second-richest man on earth, is chubby, but that’s only because he lives with his mother. Oh, wait, I forgot about supermarket magnate John Catsimatidis. Ring Ding spill, aisle six!
I have sat across a dinner table from Cats, back when he was kicking off his unsuccessful bid to be mayor of New York City, and I found myself quite unable to eat, mesmerized, as I was, by the utter mess of him. He looked as if he hadn’t had a haircut in two years, and he was missing a shirt button.
Anyway, the billionaire typically works hard, gets rich, and is indifferent to all the things someone less driven would crave. He is so focused on his work that he may even be indifferent to how the next generation will handle his fortune. So when his daughter marries some drifter-schlub-mooch, the billionaire goes ahead and pays a million or so for the wedding. And when everything falls apart a few months later, he sends the drifter-schlub-mooch away with one simple payment, rather than having him leech off the family fortune for decades. And he never mentions the guy again. The billionaire moves on.
But there is one chink in the billionaire’s armor. He has this need to make sure other people, even assholes, realize he is a billionaire. In a tiny corner of his mind—especially if he is self-made and his dad was a grocer or a dentist or an accountant or, gulp, he didn’t have a dad—the display of wealth is important. One way the billionaire goes about it, while still writing off the whole thing as a colossal joke, is by collecting contemporary art. Or, as Billionaire Hubby puts it: “You can’t collect old masters. Hang a Duccio on the wall, and most people would think, That’s just a dirty little painting. And the sad thing is that the Duccio will still be relevant in five hundred years.” So into the household comes a Francis Bacon, a Zeng Fanzhi, a Jeff Koons, a Gerhard Richter, a Felix Gonzalez-Torres.
Take our friend—let’s call him Bob. Bob has a hedge fund that manages $20 billion. His fees every year, for himself, come to $400 million. His accountant declares his long-term capital gains, so he pays 20 percent of that to the IRS, maximum. That leaves Bob with $320 million a year to spend—meaning, nearly $1 million a day.
Bob is an enthusiastic collector of contemporary art. He is buying a new apartment in the building in which he lives—for the express purpose of showing off the works he has amassed. He will live in one apartment; the other will serve as his very own museum.
Although Billionaire Hubby loves to fill rooms with dubious contemporary artwork, we have decided to skip the auctions and exhibitions this summer. Instead, we will be racing our new Tesla in the Gumball 3000 rally. Miami to Ibiza, baby! With private jets thrown in, we will be throwing away the cash we could invest in pieces likely to hold their worth. But why bother hanging on to wealth when the next generation is going to fritter it all away?