A Side of Clyde
So you live in Los Altos and think you're rich. Barron's, the financial paper last month asked, "Are You Rich Yet?" after it compiled its second annual guide to wealth in America. Before you read on, if you're like me, your slice is smaller than you think.
To make the lowest level of what Barron's defines as rich, you need $2.02 million on your ledger. Not net worth, but invested assets. The house doesn't count; the wife's jewels don't count; a couple of cars don't count - just assets invested in easy-to-trade securities.
Barron's thinking is anyone within spitting distance of a major United States metropolitan area - the way we are in Silicon Valley - can easily get to $2.02 million or more. You buy a house, you turn it once, and buy another and you've got your $2.02 million.
You do well at work and get a handsome year-end bonus and then you buy some impressive, self-pleasing toys and extravagant Tiffany trinkets at Stanford Shopping Center for the wife. Little by little your net worth begins to look rather attractive - in the millions.
But hold it.... Barron's says $2.02 million is only "beer and pretzel rich." It's the benchmark for the first level of wealth in America.
You're not "rich, rich" yet. You only reached the basic everyday Los Altos/Palo Alto type rich. You are however, in the top 95th percentile of income reporting taxpayers in United States. But if you're in that category, you're also a dime a dozen around here. Nothing to write home and tell mom. "Hey I'm a multi-millionaire."
To gain a bit of bragging rights, you have to do better than having $2.02 million in play. You'll need $4.55 million in your brokerage account for consideration as a rich person. Having slightly more than $4.5 million to invest moves you up a notch to Atherton, Woodside and Los Altos Hills.
You are now in the "filet mignon and champagne rich." That value of assets allows you to have a wine cellar with estate wines that date back to 1964. But not enough to buy '61 Chateau Margaux for the millennium.
To get a taste of the good life from a comfortable master bedroom overlooking the heated swimming pool from a 12,000-square-foot citadel in Los Altos Hills, you need a lot more. Barron's puts you in the "Yacht & Limousine rich" with a minimum of $19.33 million in your portfolio accounts. That not-so-modest sum would produce an annual income of $227,546 which is in the 99th percentile of IRS individual tax returns.
A survey of high net worth individuals conducted for Merrill Lynch by Gemini Consulting found that there were roughly six million people worldwide with liquid assets of $1 million or more. Merrill Lynch has all their e-mails and fax numbers.
To be classified as Barron's "Really Really Rich" you need $37.86 million. Some of those millionaires live in Los Altos Hills, but they live behind closed gates and have servants standing at the door with inquisitive questions. You can find their names in Money Magazine and Forbes.
So that brings it down to where I fit in. I like the luxuries the really, really rich possess. But there are some luxuries that the not-so-rich have and I'm also looking forward to finding them.
I enjoy full-service departments, sitting in luxury seats, drinking estate wines and sleeping in circular beds overlooking the pool and visiting my broker in a big black chauffeured limousine.
It won't happen by Barron's standards, because I still like the joys of the simple life. I think I have a respectable net worth, but it's in the broken pretzels and warm beer classification.
Clyde Noel is a longtime contributor to the Town Crier.