World’s Richest Man: ‘Charity Doesn’t Solve Anything’

Carlos Slim has always had a complicated relationship with philanthropy.

The Mexican billionaire, who Forbes still lists as the world’s richest man, said in 2007 that he could do more to help fight poverty by building businesses than by “being a Santa Claus.”

Mr. Slim’s signature also has been noticeably absent from the Gates-Buffett Giving Pledge. At a conference in Syndey last month, Mr. Slim said that charity accomplishes little.

“The only way to fight poverty is with employment,” he said. “Trillions of dollars have been given to charity in the last 50 years, and they don’t solve anything.”

As for the Giving Pledge, he said: “To give 50%, 40%, that does nothing,” Slim said. “There is a saying that we should leave a better country to our children. But it’s more important to leave better children to our country.”

In a speech in Mexico City Thursday, he reiterated his point that the best way to fight poverty is to create jobs.

Now Mr. Slim isn’t un-charitable. He has contributed hundreds of millions of dollars to his foundation and has funded millions of dollars in joint-venture projects with the Bill and Melinda Gates Foundation.

So he clearly isn’t against charity entirely. His point seems to be that society would benefit more if the wealthy channeled their creative energies and talents toward building job-creating businesses rather than doling out cash. It is the 21st century billionaire version of the old adage, “give a man a fish and he eats for a day, teach him to fish and he eats for a lifetime.”

In these populist times, some might argue that Mr. Slim is being a selfish billionaire who is simply justifying his own wealth accumulation. But he poses two good questions–ones I have heard from an increasing number of wealthy entrepreneurs:

Would Bill Gates and Warren Buffett be doing more for society by putting their time and money into new businesses rather than funding philanthropy?

Has philanthropy solved any major social problems in the past 50 years?

Wealthy Candidates to Spend More Than $400 Million on Elections

Rich political candidates have provided the country with immeasurable entertainment this election season. There was Jeff Greene’s party yacht. There was Linda McMahon’s crotch-kicking video. And of course, Meg Whitman’s angry maid.

But the greatest contribution has been their money. According to data I’ve compiled from Followthemoney.org and Opensecrets.org, wealthy candidates running for state-wide or national office have poured $396 million into their campaigns for the current election cycle. The number is likely to soar well past $400 million by election day, according to campaign-finance analysts.

The biggest spender for national office is Linda McMahon, the Connecticut Senatorial candidate who has contributed $22 million to her campaign. For state races, the leader is Meg Whitman, who has contributed $140 million or more to her campaign.

For state races, self-funded candidates have spent $243 million, up from $230 million in the 2006 mid-terms, according to followthemoney.org. For national races, candidates have spent $153 million, up from $145 million in 2006, according to opensecrets.org.

Their combined spending has become a small stimulus program of sorts. Just think of all advertising, campaign workers, buses, planes and cars, and pizza deliveries that $400 million has supported. Not to mention the pricey consultants hired to make rich candidates sound like normal people.

That $400 million is equal to the government’s total spending on its Healthy Food Financing Initiative, Michelle Obama’s pet project.

Of course, lots has been made of the fear that the rich are buying their way into office. (Though the failed campaigns of Jeff Greene, Steve Pagliuca and others prove that money alone can’t buy an office).

An equally fair question is what will happen when all this rich-candidate-stimulus program runs out. The rest of the wealthy–fearful about the country’s economic future–seem to be pouring their money into gold, cash and other nonproductive uses. Wealthy politicos seem to be the only rich people really spending to create jobs right now. After all, it is their money, they should be able to spend as they please.

Granted, $400 million is a drop in the bucket of the country’s $14.6 trillion GPD. But in this economy, every little bit helps. Perhaps we should hope that the richest candidates face long and expensive run-offs elections.

Do you think the $400 million has been a positive for the economy?

Ralph Lauren Will Show You His Cars–For $150,000

Ralph Lauren’s “Pink Pony” online charity auction has all kinds of unusual items up for bid.

You can buy a Teepee inspired by the RL Ranch (current bid: $3,750). You can get modeling and catwalk tips from the supermodel Valentina (current bid: $1,000). Or you can have your dog (or your child) star in a Ralph Lauren ad (current bids $2,500 and $9,250, respectively). All proceeds go to fund the fight against cancer.

Yet one item on the list stands out as a bit, well, pricey.

That would be the tour of Ralph Lauren’s car collection. The estimate for the tour is $150,000. That’s right, $150,000 to look at–not to own–some vintage cars. Oh, you also get a book.

Granted, it is an impressive collection. He owns vintage Ferraris, Porsches and a 1936 Bugatti Atlantic, which is valued at north of $30 million. As the bidding description states, “You and a friend will receive a tour of this extraordinary private collection of classic cars given by Ralph Lauren himself.” The day ends with a ride in the 1936 Bugatti. The winner also get a signed copy of “Speed, Style, and Beauty: Cars from the Ralph Lauren Collection.”

I love cars as much as the next guy (and maybe more). Having some quality car-talk time with Ralph would be an experience to remember. But for $150,000? For that amount, I think I would rather buy my own Porsche or Ferrari.

This is, however, for a cause, and someone may well hit the estimate. Even if they don’t, the tour is likely to raise a large chunk of change. So far there have been four bidders and the top bid is $42,500.

How much would you pay for a tour of Mr. Lauren’s cars?

The Rising Threshhold for Being in America’s Top 1%

Inflation may be low in the real economy. But not at the top of America’s income ladder.

A new analysis of IRS data by the Tax Foundation tells us how much it takes to be included in the 1 Percent Club, or to be among America’s top 1% of earners.

The result: the threshold for the One Percent Club has more than quadrupled since 1980. While the cut-off fell slightly in 2008–about 7% owing to recession and global financial crisis–it will likely resume its steady march higher in 2009 or 2010.

How to explain such a rapid increase? Inflation is part of the equation. A salary of $80,580 in 1980 would be $207,920 in 2008 dollars. But that still is far lower than the $380,354 required to make the 2008 cut-off.

The rest of the increase is likely attributable to the rising salaries of top executives and business owners, as well as higher returns from investments and asset sales. Those rising salaries at the top have–over the long term–increased the share of income going to the top 1%. In 2008, the top 1% accounted for 22.8% of the nation’s reported income, up from 8.46% in 1980. (As we know, their share fell in 2008, though it still is above 2004 levels.)

Here is the chart, going back to 1980 (numbers are adjusted gross income and are not inflation-adjusted).

1980 — $80,580
1985 — $108,134
1990 — $167,421
1995 — $209,406
2000 — $313,469
2005 — $364,657
2007 — $410,096
2008 — $380,354

*The Tax Reform Act of 1986 changed the definition of AGI so numbers aren’t strictly comparable.

How much do you think it will take to be in the top 1% of income earners in 2015?

Why the Wealthy Are Paying Less of America’s Taxes

The debate over raising taxes on the wealthy has turned largely on a single premise: the rich are running away with a disproportionate share of the nation’s income but paying ever lower taxes.

As the tax-supportive Warren Buffett said in a speech yesterday: “The question is, do we get more money from the person that’s going to serve me lunch today, or do we get it from me? I think we should get it from me.”

New data from the I.R.S. and an analysis by the non-partisan Tax Foundation, show the rich are indeed paying a lower share of the nation’s tax burden. But that’s because the rich are losing income. And while their share of the nation’s earnings is falling, their average tax rate is rising.

The data show that in 2008, the top 1% of tax returns paid 38% of all federal individual income taxes and earned 20% of adjusted gross income.

That marked a big drop from 2007 — the peak of the boom — when the wealthy paid 40.4% of income taxes and earned 22.8% of income. In fact, the share of income held by the top 1% was the lower in 2008 than it was in 2000.

That suggests that after years in which the rich increased their share of national income, their share may now be shrinking.

At the same time, the tax rate paid by the rich is actually going up. The top 1% paid an average income tax rate of 23.27%, up from 22.45% in 2007 — the first increase since 2000. The study attributes the increase to the fact that the wealthy are earning more of their income from wages and salaries rather than capital gains and dividends (which are taxed at a lower rate).

“Overall, these data on high-income tax returns appear to confirm that the recent recession had the same diminishing effect on income inequality that most recessions have, and that it occurred for the same reason, a sharp decline in income at the high end,” the report said. “This appears to contradict recent reports based upon Census data suggesting the opposite, that this recession had actually increased income inequality.” (For more on why the IRS and Census data confict, click here).

Yes, the wealthy still have a huge share of income and taxes. The report states that the top 5% of tax-payers earn 34.7% of income and pay 58.7% of taxes.

And of course, 2009 and 2010 may tell a different story.

But the report calls into question the prevailing notion that the rich are gaining their share of income while paying ever lower tax rates.

Wealthy Families Plan To Spend $2,300 on Holiday Gifts

By all appearances, the wealthy should be preparing to spend big this holiday season.

The millionaire population is back up. Stocks are well off their lows of 2009. And high-end incomes have held up fairly well – especially compared to the rest of the country.

But a new survey suggests the wealthy are planning to spend less or the same as last year.

The survey, by the American Affluence Research Center, polled 439 people with net worths of $800,000 or more, which represents America’s wealthiest 10%. According to the survey, the group plans to spend an average of $2,370 this holiday season, down from $2,399 last year.

More than two thirds of the respondents plan to spend the same as they did in 2009. Only 3% said they plan to spend more. About 28% plan to spend less. And among those spending less, the average decline was 14.9% from 2009.

A surprising 12% of the group said they’re not buying any gifts this year.

Of course, to most Americans, spending an average of $2,370 on holiday is a lot. But high-end retailers are unlikely to take much cheer in the finding, since so much of our consumer economy is now built on increased spending by the wealthy. The Affluence Center estimates that the top 10% now accounts for half of all consumer spending.

Why are the wealthy holding the line on spending this Christmas?

Ron Kurtz, president of The Kurtz Group, which runs the American Affluence Research Center, cited two main reasons. First, he said the wealthy have taken a hit to their net worths over the past three years and remain cautious. Second, he said they have a gloomy outlook for the future.

“They’re not looking for any improvement as far as household income, and they’re concerned about rising taxes,” he said. “I think there’s a bit of a negative psychological effect when it comes to their spending plans.”

Are you planning on spending more than $2,300 on gifts this holiday season? What will you be buying?

Strapped Mansion Owners Rent Out Rooms

Before the recession, Trese and Tim Canham were living large.

According to an article in the St. Petersburg Times, the Canhams of Tarpon Springs, Fla. used to gross $3 million to $5 million a year from their construction business.

They bought an RV, a boat, multiple trucks, jewelry and luxury clothing. Their pride and joy was their house – a 7,000 square foot taupe stucco mansion with a white balustrade and shimmering interior of crystal chandeliers and gilded mirrors.

They also spent liberally on their four kids - gymnastics and dance lessons, designer handbags and jeans.

When the real-estate market crashed and so did the Canhams. They tried to sell their house – first for $2 million, then for $650,000. There were no takers. They could no longer pay the mortgage. The only offer they got from a short sale was for $350,000.

Desperate to save their house, the Canham’s developed a novel money-making scheme – renting out rooms to strangers.

The family moved into one part of the house and rented out the girls bedrooms to college students and other locals for $125 to $150 a week.

“This is all new to us,” Ms. Canham told the Herald. “We’re struggling, too.”

Whether or not the boarding-house model will work remains unclear. Before and during the Depression, struggling American families commonly rented out rooms to boarders.

But the Canham’s story shows just how fall some of the once-wealthy (or at least high-income) have fallen. According to research from the Institute for Financial Literacy, the largest surge in bankruptcies in recent years has been among the upper-middle class and affluent.

Bankruptcies among those in the highest income class measured (those making more than $60,000 a year) surged from 5.5% of total bankruptcies in 2006, to 9.1% in 2009. Most other income groups have remained flat over that period.

The reasons for the crash of the Canham’s, and of others like them, are fairly straightforward: too much spending, too much debt and too much real-estate. And of course a real-estate plunge in Florida that was beyond what many expected.

The solutions — other than losing the mansions — are less clear.

How else do you think the Canham’s can raise money to save their mansion?

Uh, Oh! The Rich Are Buying Gold Again

As I wrote in June, the rich have caught the gold bug again.

They caught the bug in 2008 and 2009, when the global financial crisis was in full swing and many doubted the viability of the banking system. Now they are piling in because of fears that the U.S. will experience a double-dip recession.

We aren’t talking about exchange-traded funds or funds. We are talking bars and coins stashed in safes in the mansion. According to a Reuters article, one wealthy UBS client recently bought more than ton of physical gold and had it shipped. At Friday’s closing price, a ton of gold cost a little more than $42 million.

UBS is even recommending that its richest clients hold 7% to 10% of their assets in precious metals such as gold, which last week vaulted over $1,300 an ounce.

Let us set aside the issue of whether this is good advice or not, or whether gold is a smart investment. The problem with the rich gold rush is what it does to the broader economy.

It has long been a tacit understanding in the U.S. that the wealthy will invest their excess cash in productive, job-creating businesses. For decades, most of the money invested by millionaires has gone into stocks and bonds–products that, whatever their pitfalls, helped fund Main Street by providing capital to companies and governments.

What does gold do? Nothing but sit in a safe. It doesn’t launch start-up companies, it doesn’t help towns build roads and it doesn’t create jobs (except those for safe companies and coin dealers).

The gold purchases may also have implications for the tax debate. Conservatives say the Bush tax cuts shouldn’t be allowed to expire because we need spending by the wealthy to create jobs–especially now. Liberals say the wealthy just hoard their money, so higher taxes won’t affect jobs.

If the wealthy are plowing their money into gold–the ultimate hoarding vehicle–are those tax cuts being well spent? (That assumes, of course, that the government would spend it better, which is a stretch).

We can’t blame the rich for being paranoid about the economy right now. A new survey out today from Phoenix Marketing Intl. shows that millionaire investors are now at their most pessimistic since April of 2009. What’s more, the gold buyers may represent a minority of the wealthy.

Still, their gold fever could chill any economic recovery.

Do you think the rich should be buying gold?

Do the Rich Work Harder?

We often hear that the key to wealth is hard work.

But is it really?

British billionaire Richard Branson is quoted today as saying that the wealthy don’t work harder than everyone else–they are just fortunate.

“Yes, entrepreneurs may work hard, but I don’t think they actually work any harder than, say, doctors, nurses or other people in society, and yet tremendous wealth comes with it and therefore enormous responsibility comes with that wealth, responsibility to do good things, maybe create new businesses and maybe tackle some of the more seemingly intractable problems in the world…”

He may be right. But studies on the comparative work habits of the wealthy tell a different story.

Research by professors Mark Aguiar and Erik Hurst combined the results of several large surveys (including studies where randomly chosen subjects kept detailed time diaries), and found that the working time for upper-income professionals has increased compared with 1965, while total annual working time for low-skill, low-income workers has decreased.

As David Brooks put it in a 2006 column: “For the first time in human history, the rich work longer hours than the proletariat.”

Research by Daniel Kahneman, the Nobel Prize-winning psychologist, shows that “being wealthy is often a powerful predictor that people spend less time doing pleasurable things and more time doing compulsory things and feeling stressed.”

His study found that people who earn less than $20,000 a year, for instance, spent more than a third of their time in passive leisure, like kicking back and watching TV. By contrast, those earning more than $100,000 a year (more affluent than wealthy), spent less than a fifth of their time in passive leisure.

My own experience tells me that the wealthy work insanely hard. I spent Monday and Tuesday with a billionaire who got up at 4:30 a.m., held meetings and business briefings until 9 p.m., ate dinner, then worked on emails until 2 a.m. He woke up at 5 a.m. the next morning, and started all over again. Seven days a week. This entrepreneur hadn’t taken a day off in 10 years (and I checked).

Of course, the inherited wealthy might be a different story (though plenty of them work hard, too). Still, at a time of lower pay and increasing demands on workers, it might seem like most Americans are working longer hours. But according to the OECD, total average annual work hours for those who are employed fell to 1,768 in 2009, from 1836 in 2000.

Of course, some may be working less not out of choice but by necessity. And maybe the upper-class are the only ones fortunate to be able to work long hours for hefty compensation. What is more, even the proud wealthy would admit that hard work accounts for only part of their success.

Still, based on the limited data we have, wealthy and upper-income folks really do seem to worker harder than everyone else.

Do you think the wealthy work harder than everyone else?

Meg Whitman’s Cleaning Lady: Is $23 an Hour Exploitive?

When you are wealthy, household help is a blessing. When you are a wealthy person seeking political office, household held can quickly become a liability. (See Zoe Baird and Tim Geithner.)

Meg Whitman’s undocumented housekeeper, Nicky Diaz Santillan, just held a teary news conference with her attorney–celebrity lawyer Gloria Allred–alleging that Ms. Whitman knew about Ms. Santillan’s undocumented-worker status. Ms. Santillan worked for Ms. Whitman for nine years and was, she says, fired when Ms. Whitman announced her run for California governor.

Ms. Allred said she is filing a claim for lost wages.

In response, Ms. Whitman’s campaign said Ms. Santillan “falsified her employment records” and is being “manipulated by Ms. Allred,” as the Los Angeles Times reports. The campaign posted documents it said back up its assertions.

But undocumented or not, unfairly let go or not, one of the more interesting parts of all this is Ms. Santillan’s accusation that she was “exploited..and financially abused” by Ms. Whitman. But she was earning $23 an hour.

All the details aren’t known, so maybe Ms. Santillan was financially abused. But at a time when the minimum wage in America is $7.25 an hour (California’s is $8), and millions of Americans are out of work, calling $23 an hour “exploitation” seemed worth further research.

So I called Natasha Pearl, who is founder of the family-advisory firm Aston Pearl and who counsels families on staffing and budget issues. She said $23 an hour (or about $47,000 a year gross) is fairly typical for a highly qualified cleaning person working for a wealthy family in a major metropolitan area.

“It doesn’t sound too high or too low,” she says. “But on its face it doesn’t sound hideously exploitive.”

She said some executive housekeepers–who cook, answer phones and handle vendors and household inventory–can earn $80,000 a year or more.

Steven Laitmon of the Calendar Group, a Connecticut-New York staffing agency, agreed, saying $20 to $25 an hour is the usual range for an “experienced housekeeper working in a fine home.”

What also struck me was that Ms. Santillan was hired through an agency. Agencies are supposed to screen for things like immigration status. “In my experience, agencies want to get paid, they get paid by placing staff,” Ms. Pearl says. “And yes, we have seen situations, which honestly we find shocking, where agencies have placed staff who are not legally able to work in the U.S.”

Ms. Pearl says these kinds of claims and lawsuits by household staff become more common in economic downturns, as more staffers get laid off or have their salaries reduced.

What are wealthy, aspiring politicians to do if they have household help? Ms. Pearl says hire a good household lawyer and follow their advice.

Do you think $23 an hour for a cleaning person is “exploitive”?

Can Megayachts Be Eco-Friendly?

“Ecomansions,” “carbon-neutral private jets” and “fuel-saving SUV” may sound like oxymorons, but they are becoming increasingly popular among the environment-minded rich who like their luxuries accessorized with a bit of social conscience.

But a Green Megayacht? That may take some time.

At the Monaco Yacht Show–the annual Yachtapalooza for the wealthy–one of the top themes was environmentally sensitive boats. The talk of the docks was “Exuma,” a newly launched, 164-foot motor yacht with an unusual, all-aluminum hull. (Special thanks to Merijn de Waard at SuperYachtTimes.com for the pic).

Exuma’s lighter hull, along with its narrow, sleek design and knife-like bow (look familiar?), makes for a marked reduction in fuel consumption. The boat was built by Italy’s Perini Navi and won the 2010 Green Plus Yacht Award.

Dutch megayacht builder Feadship plans a boat named “Breathe” which has solar cells, diesel-electric hybrid engines and a special paint to reduce water resistance.

Paolo Moretti, who heads the yachting division of Italy’s ship certification body, RINA, told AFP there is growing interest in the environment among the mega-yacht crowd. “Luxury yachts have big budgets but owners now not only want to excel in terms of comfort and luxury but also in environmental sustainability,” he said.

Many yacht owners also are buying carbon offsets and looking into more green-friendly building materials and waste-disposal products.

But can a 150-foot ship carrying just eight guests (Exuma’s maximum) really be green? Especially when it carries what AFP described as “a huge amphibious jeep the size of a Hummer, a large hovercraft, two electric land scooters and two seabobs”?

Perhaps not. And maybe things like carbon offsets and green-friendly paint are just fig leaves on the giant displays of wealth motoring through the planet’s oceans. But if the super-rich are going to continue to build and buy giant boats–and they will–at least they are thinking a little bit about the environment.

Do you think there will be a big market for green megayachts?

High-Tax States Still Grow Millionaires

Do high state taxes chase out millionaires?

Some new data expected out tomorrow suggest that tax-driven wealth flight and wealth destruction may be exaggerated.

The Phoenix Affluent Marketing Service, a Phoenix Marketing International practice, will release its annual state rankings of millionaires per capita. The Wealth Report got an early look at the data, which are a ranking not just of the raw number of millionaires, but also the ratio of millionaires to total state population, or what I call “millionaire density.”

First, the data show that the overall number of millionaires in the U.S. rose 8% in 2010 to roughly 5.6 million households.

The data also show that the two states with the highest millionaire density–Maryland and Hawaii in 2010–also have some of the highest marginal income-tax rates in the country. Hawaii has an 11% tax rate on those earning $200,000 or more (the highest in the nation), while Maryland has a special millionaire’s tax of 6.25% on those earning more than $1 million. At No. 3 is New Jersey, which has a rate of 10.75% on those earning more than $1 million a year.

In fact, despite their very high taxes, the millionaire populations and the millionaire densities of Hawaii, Maryland, New Jersey, California and New York increased in 2010 from 2009. That suggests that the states gained more millionaires than they lost.

Overall, the rankings changed little, with only a few states changing places. Still, the ranking of Nevada, which has one of the lowest marginal tax rates, fell to 18 from 14.

This isn’t to say that taxes don’t matter to the wealthy. They do. A lot. Some states with very low marginal income tax rates, such as Connecticut and Alaska, also ranked high on the density list.

But there are lots of other economic factors at work in the millionaire state counts. And that’s the point. When it comes to creating and retaining wealth, the health of state economies and work-force skill levels seem to matter much more than state tax rates.

“It is remarkable that the same four states have topped our millionaires ranking for three years running,” says David Thompson, Managing Director of the Phoenix Affluent Market. “However, Hawaii, Maryland, New Jersey, and Connecticut all share some important distinctions: they are small states with large concentrations of highly educated professionals and business owners, which are key ingredients to growing wealth.” He added that, “in general, most high-net-worth households don’t base their living decision on tax rates, but on things like quality of life, access to good education, infrastructure and culture.”

That demographics and economics matter more than taxes in increasing and retaining wealth may seem like an obvious point. Still, it is one that seems to get lost in the increasingly emotional debate over taxing the wealthy.

Do you think high taxes are driving out the rich in your state?

TOP STATES RANKED BY MILLIONAIRES PER CAPITA
(Percentage of population with $1 million or more in investible assets).

Hawaii — 6.93%
Maryland — 6.79%
New Jersey — 6.69%
Connecticut — 6.65%
Massachusetts — 5.98%
Alaska — 5.97%
Virgina — 5.94%
New Hampshire — 5.79%
California — 5.66%
Washington, D.C. — 5.53%
(SOURCE: Phoenix Affluent Marketing Service)

Why the Wealthy Never Retire

For many Americans, the idea of retirement faded long ago. Dwindling savings, weak salary growth, falling investments and rising prices meant many Americans would keep working well into their 60s and 70s. The Great Recession made retirement even more remote.

As for the wealthy, well, they can still retire in style.

Or can they?

A new study from Barclay’s Wealth, titled “The Age Illusion: How the Wealthy are Redefining Their Retirement,” suggests that even millionaires and multimillionaires are planning a lifetime of work. And the reasons are surprising.

The study, which polled 2,000 people with $1.5 million or more in investible assets, found that 54% of millionaires say they want to continue working in retirement. Even the very wealthy aren’t giving up work. Globally, 60% of those with a net worth of $15 million or more plan to stay involved with work “no matter what their age.”

Barclays calls them “Nevertirees.” Longer life spans are one reason, along with an increasingly uncertain financial picture. But the study says a large reason the wealthy want to keep working is because they enjoy it.

Greg Davies, head of Behavioral Finance at Barclays Wealth, said that “for many their working life is an important part of who they are–it is something from which they derive self-worth and value, and not just a necessary evil to be endured until they can enjoy a leisurely retirement.”

The study quotes Dick Pyle, who started two businesses in his 60s, including truffle-tree.com, as saying: “I couldn’t imagine myself not working and retirement has never entered my head. When I reached 60, it seemed like a good time to re-assess things and start a new business that I could devote myself to.”

To some, this might sound like limitless greed masquerading as personal enjoyment and “passions.” For most people, work is difficult, stressful and tedious. Don’t these millionaires have enough already? (To which I would add, there is never enough.)

But entrepreneurs–who account for the bulk of the wealthy–may be different. I have interviewed enough to know that for them, work is their recreation, and their recreation is their work. I wouldn’t call their work “fun.” But it defines them. They never stop looking for the next commercial need to fill or industry to re-invent, or company to remake or killer deal.

It may be work. But they can’t imagine life without it–no matter how old they get.

Maybe there are other reasons as well. Why do you think the wealthy never retire?

Bentley Recalls Cars for…a Hazardous Hood Ornament?

Toyota Motor. Ferrari. Now Bentley?

Bentley, the luxury-car maker owned by Volkswagen, said it is recalling 1436 cars world-wide. The reason: its “Winged B” hood ornament could hurt pedestrians.

There have been no reported injuries from any Winged B’s. Still, a Bentley dealer noticed that the spring mechanism that is supposed to make the ornament retract has a tendency to corrode and could malfunction. The ornament is designed to retract on impact.

“On vehicles affected there is the potential for the retractable ‘B’ mechanism to become corroded,” said an announcement from the National Highway Traffic Safety Administration. “In extreme cases, this may lead to flying ‘B’ mascot not retracting when struck. Such a defect may result in additional injury in the event of a pedestrian impact.”

And so, Bentley is playing it safe and recalling models of the Arnage, Brooklands and Azure models produced from October 2006 to March 2009, and which came with the hood ornament option. The company says 596 of the 1436 cars recalled are in the U.S.

The cars cost $221,000 to $363,000, though the hood ornament is an extra in some models, costing an additional $1,290 to $4,440.

Bentley’s recall follows Ferrari’s recall of its new 458 Italia model, which has a tendency to catch fire when driven at high speeds in warm weather. It also follows the Toyota fiasco.

Clearly, Bentley’s recall is trivial in comparison. And the company should be commended for its preventative recall.

But the recall highlights the dangers of added auto bling. And it gives us an excuse to compare Bentley’s Winged B with Rolls-Royce’s famed “Spirit of Ecstasy” ornament, which Rolls claims has been thoroughly tested for its retraction abilities.

Danger aside, which winged luxury-mobile ornament do you like better? The “B” or Ecstasy?

Where Will Tomorrow’s Billionaires Come From?

The annual release of the Forbes 400 list of Richest Americans has become an important part of the country’s Horatio Alger faith. All those new billionaires, starting out with little or nothing, working hard and riding a great idea to vast wealth.

Only this year tells a different story: A scarcity of new wealth, and a hardening of the plutocracy.

This year there were only 16 new members of the 400, compared with 19 last year (the worst economic year for the richest Americans) and far less than the roaring 2000s, when 40 to 50 newly minted billionaires were joining the list annually.

Part of the enduring myth of the Forbes list is mobility. Anyone can become a billionaire with luck, pluck and venture capital. At the same time, anyone can fall off. Wealth is fluid, with the mailboxes in Billionaireville constantly changing names.

But mobility among billionaires seems to be declining. Bill Gates tops the list for the 17th straight year, with Warren Buffett once again No. 2, followed by Larry Ellison and the Walton family – as per previous years. The Koch brothers moved up a few notches, but that doesn’t seem like real mobility.

What is even more troubling than the slowing of mobility of the super-rich are the sources of new wealth. Most of the 16 new members of the Forbes list are in old industries: coal, natural gas, chemicals and casinos. Not exactly the formula for America’s vaunted entrepreneurial wealth machine.

Yes, there are the Three Amigos from Facebook. But there are no new billionaires from tech, or the Green Economy, or biotechnology or any other revolutionary product or industry.

New wealth is being created, even in this economy. But in the U.S., it just seems to be going to the already wealthy, since the Forbes listers as a whole increased their fortunes 8%. Tomorrow’s American rich don’t seem to be doing as well.

Do you think America’s plutocracy is becoming stale? Why?