Want to be rich? It helps if you’re a psychopath
WEALTH SECRETS OF THE 1%
by Sam Wilkin (Sceptre £20)
MONEY money money,’ as Abba once sang with typically Scandinavian wisdom, ‘ it’ s a rich man’s world’. We all know the truth of this, whether we have enough money or not. Most of us don’t, of course, but some people, just a very few, have more than they will ever need, and then rather more than that.
How do they do it? And why can’t they give some of it to me?
Sam Wilkin is an economist and has been studying the very rich for most of his working life. And he’s not talking about ordinarily loaded here: ‘A comfortable fortune that might afford a few homes in prime locations, an elite school for your children, a supercar, a modest entourage, a live-in nanny.’
I love the idea of a ‘modest’ entourage.
No, he’s talking about ‘a fortune of yachts and personal helicopters, of diamond- encrusted light fixtures, of stately homes and private islands, of your name emblazoned upon landmark buildings and a charitable foundation bravely tackling world issues’. A fortune that ensures your name will live for ever, even if you can’t.
Suppose such a fortune was your goal. How would you acquire it? Wilkin seeks to answer this question by studying the relatively small number of people in history who have achieved this. And he finds a certain number of common factors.
Oddly enough, becoming an investment banker isn’t one of them. I know a few bankers who are rich, and at least one who is obscenely rich (and obscenely pleased with himself about it, too).
But I know none who are the sort of rich we are talking about here. Indeed, of the 1,600 dollar billionaires in the world today, fewer than 50 — not even five per cent — are bankers. And most of those are from the developing world. London bankers are relative paupers, which is the first good news I’ve heard all day.
Instead, Wilkin has determined that behind almost every great fortune, there lies what he calls a ‘wealth secret’. This is a piece of knowledge or a technique that, while not exactly criminal, certainly skirts the customs of the time, and possibly the laws as well. All of them, he says, involve ‘some sort of scheme for defeating the forces of market competition’. Many involve legal manoeuvrings or the exercising of political influence. Boldness and fearlessness are a given. Mild psychopathy probably helps, too.
He begins with ancient Rome. Marcus Crassus, one of the triumvirate who ruled in the 1st century BC, was at least 400,000 times richer than the average citizen.
Finding himself on the winning side in the civil war, he ensured that his political enemies were put to death and that all their fortunes went to him.
BY OUR more scrupulous standards t o day we would probably regard him as an out- and- out villain. But around the world there are still people making vast fortunes by grabbing what isn’t theirs to grab. I shall not name names, but you probably know who I mean.
The great American industrialists of the late 19th century — Vanderbilt, Carnegie, Rockefeller et al — were known as the ‘robber barons’ even then. In their case political influence was no longer enough to make a vast f ortune: you needed to outmanoeuvre your competitors and then swallow them up in an attempt to construct an effective monopoly of your market.
It’s all very well being the best in your field, but it’s much more lucrative to be the only.
A phrase that crops up often in this book is ‘ there was nothing criminal about it at the time’. The success of the robber barons was essentially underwritten by Pierpont Morgan, founder of the JP Morgan bank, a man so powerful and important that rumours of his ill health caused the u.S. stock market to slump.
When he died his estate was valued at r oughly $ 80 milli on, equivalent to $1.9 billion today.
To some of his clients, though, this was small potatoes. ‘And to think, he was not a rich man,’ said Andrew Carnegie on hearing of this figure.
From there, Wilkin moves into the modern era, to Carlos Slim, the Mexican telecoms magnate who for four of the past five years has been the world’s richest man, according to Forbes magazine.
As Wilkin says: ‘Of all the many books that tell you how to get rich, none of them advises you to start a telecoms business in Mexico. How could they be so wrong?’
Mexico decided to privatise its fixed-line telephone services and Slim bought the whole thing, lock stock and barrel. He turned a lumbering nationalised industry into an efficient, private monopoly, whacked up prices and pocketed the proceeds. Simple, really.
Wilkin ends with t oday’s monopolists: the tech wizards of Microsoft, Google and Amazon, who have no effective competition in their respective specialisms, and plan to keep it that way.
This clever, entertaining piece of work is a self-help book with a distinctly satirical edge. Rich and poor will enjoy it equally, and if you have a modest entourage, I would consider getting copies for them too.