"Very Rich Are Leaving the Merely Rich Behind

By LOUIS UCHITELLE
NYT - Published: November 27, 2006

A decade into the practice of medicine, still striving to become “a well regarded physician-scientist,” Robert H. Glassman concluded that he was not making enough money. So he answered an ad in the New England Journal of Medicine from a business consulting firm hiring doctors.

And today, after moving on to Wall Street as an adviser on medical investments, he is a multimillionaire.

Such routes to great wealth were just opening up to physicians when Dr. Glassman was in school, graduating from Harvard College in 1983 and Harvard Medical School four years later. Hoping to achieve breakthroughs in curing cancer, his specialty, he plunged into research, even dreaming of a Nobel Prize, until Wall Street reordered his life.

Just how far he had come from a doctor’s traditional upper-middle-class expectations struck home at the 20th reunion of his college class. By then he was working for Merrill Lynch and soon would become a managing director of health care investment banking.

“There were doctors at the reunion — very, very smart people,” Dr. Glassman recalled in a recent interview. “They went to the top programs, they remained true to their ethics and really had very pure goals. And then they went to the 20th-year reunion and saw that somebody else who was 10 times less smart was making much more money.”

The opportunity to become abundantly rich is a recent phenomenon not only in medicine, but in a growing number of other professions and occupations. In each case, the great majority still earn fairly uniform six-figure incomes, usually less than $400,000 a year, government data show. But starting in the 1990s, a significant number began to earn much more, creating a two-tier income stratum within such occupations.

The divide has emerged as people like Dr. Glassman, who is 45, latched onto opportunities within their fields that offered significantly higher incomes. Some lawyers and bankers, for example, collect much larger fees than others in their fields for their work on business deals and cases.

Others have moved to different, higher-paying fields — from academia to Wall Street, for example — and a growing number of entrepreneurs have seen windfalls tied largely to expanding financial markets, which draw on capital from around the world. The latter phenomenon has allowed, say, the owner of a small mail-order business to sell his enterprise for tens of millions instead of the hundreds of thousands that such a sale might have brought 15 years ago.

Three decades ago, compensation among occupations differed far less than it does today. That growing difference is diverting people from some critical fields, experts say. The American Bar Foundation, a research group, has found in its surveys, for instance, that fewer law school graduates are going into public-interest law or government jobs and filling all the openings is becoming harder.

Something similar is happening in academia, where newly minted Ph.D.’s migrate from teaching or research to more lucrative fields. Similarly, many business school graduates shun careers as experts in, say, manufacturing or consumer products for much higher pay on Wall Street.

And in medicine, where some specialties now pay far more than others, young doctors often bypass the lower-paying fields. The Medical Group Management Association, for example, says the nation lacks enough doctors in family practice, where the median income last year was $161,000.

“The bigger the prize, the greater the effort that people are making to get it,” said Edward N. Wolff, a New York University economist who studies income and wealth. “That effort is draining people away from more useful work.”

What kind of work is most useful is a matter of opinion, of course, but there is no doubt that a new group of the very rich have risen today far above their merely affluent colleagues.

Turning to Philanthropy

One in every 825 households earned at least $2 million last year, nearly double the percentage in 1989, adjusted for inflation, Mr. Wolff found in an analysis of government data. When it comes to wealth, one in every 325 households had a net worth of $10 million or more in 2004, the latest year for which data is available, more than four times as many as in 1989.

As some have grown enormously rich, they are turning to philanthropy in a competition that is well beyond the means of their less wealthy peers. “The ones with $100 million are setting the standard for their own circles, but no longer for me,” said Robert Frank, a Cornell University economist who described the early stages of the phenomenon in a 1995 book, “The Winner-Take-All Society,” which he co-authored.

Fighting AIDS and poverty in Africa are favorite causes, and so is financing education, particularly at one’s alma mater.

“It is astonishing how many gifts of $100 million have been made in the last year,” said Inge Reichenbach, vice president for development at Yale University, which like other schools tracks the net worth of its alumni and assiduously pursues the richest among them.

Dr. Glassman hopes to enter this circle someday. At 35, he was making $150,000 in 1996 (about $190,000 in today’s dollars) as a hematology-oncology specialist. That’s when, recently married and with virtually no savings, he made the switch that brought him to management consulting... (con't)"

One in 825 households... interesting, don't you think?
A greater number of people than I would have guessed.

Rob

I have to question the net worth claim-what percentage of that is home ownership

in the SF Bay Area, you have these crappy homes that are book-valued at several hundred thousand dollars where you have the same house in a lower cost of living area that are listed for a lot less

my parents' home cost $80K when they bought it and it may be worth a little bit more; a comparable house in any other area would be worth three or four times as much, if not more

Unfortunately, I'm not in that category but I do know several people who are and they're just hitting their 40s, most of whom live in Southern California. I envy them for their money but not for their limited time from handling their work issues. That is the tradeoff, by what I have seen. Not only does their family life suffer but their health oftentimes does as well. Only the super rich that you have mentioned can afford to spend great lengths of time with their families. Yes, I do know a couple of them as well and they are in their late 50s/early 60s.

One gentleman said that he sacrificed greatly to get where he is and if given the opportunity to do it all over again, he would have traded the time with his family for the money that he had earned. However, he hoped that his lesson could be learned by other before they made such a grave error in judgment.

The above quote is the best part of the article. I have no problem w/ people aspiring to have wealth--as long as they're giving back to those in need. Otherwise, to quote Jesus, "It's easier for a man to walk through the eye of a needle than for a rich man to get into heaven."

I really feel those numbers are flawed!

Actually, the Bible passage is from Matthew 19:24, which reads, "It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God."

I, too, am delighted that the new trend in being rich is philanthropy. What better way to combat the ingratitude in the world?

Thanks for the correction UCLAfan.

Interesting article. I'm proud to say my parents are part of the one in 825 households with that income with both of their salaries and investment stuff and they support a variety of causes each year. That was actually refreshing to hear and I'm glad to hear people with billions like Warren Buffett and Bill Gates who have said that their fortunes will be going to charity when they die. Philanthrophy is something that is very important and has been instilled in me by my parents. My boyfriend and I have supported the Elizabeth Glaser Pediatric Aids Foundation for awhile now as well as The Boys and Girls Clubs of America, The St. Jude's Children's Research Hosptial, and Oprah's Angel Network. While I don't consider it something a person of means HAS to do....its a moral obligation to me to help at risk populations. The gap between the rich and the poor continues to increase and anything that reinforces philanthropy is a good thing.

I am not and probably will never be in near a position as the 825.

I was born to lower middle class parents who worked hard to keep a happy and healthy home. We never were able to take those family vacations or have cars bought for us. I was the first in my family to go to college- and because I was raised practical, I chose a practical profession.

I get paid well enough to pay my bills and maybe soon buy a house- but it has been a struggle because I started (like most college grads now) with a huge debt that I am having to repay so that I could afford to go to college. (I was only partial scholarship despite high grades (summa level), major high school involvement and above average ACT scores)... so I have had to start from below ground level in my career and post-collegiate life. It is frustrating as hell.

I feel like I am having to live vicariously through the lives of others trips, toys and lives... the sad thing is that I spend time volunteering and working on developing pro-bono professional services- but it just isn't making me happy.... I just don't know how to get out of that ground level and live life above ground...

I don't want to win the lottery or have as much money as the 825, but I would like to be able to live debt-free and be happy and get to do things for others without the thought in the back of my head- when am I going to be able to do something nice for myself??

Sorry- back to topic- Bill Gates and his level of philanthropy, especially with Bono when they were the People of the Year last year- that generosity amazes and inspires me.

Kick, it'll take a few years. You are on the right road. Will it lead to being on a list? I doubt it, but you will probably find your life so fulfilling, that you just won't care about any list. Hang in there, kiddo!

My favorate saying in this vein is "If you want to know how God feels about money just look at the people he gives it to."

I think of it every time I see Paris Hilton and her ilk.

Wow, when did God say that?

Puschkin,

You are SO profoundly right!!!

One paragraph in the article may be a bit misleading:While I would not ever want to disparage random acts of kindness, even by the super-rich, it is probably not realistic to expect that giving by the rich will solve or even ameliorate social ills.

That is because most do not investigate where there money goes well enough to assure it is not wasted, not because they can't afford to but because they don't need to bother and cannot be bothered.

Also they tend to give to the popular cause of the moment rather than to organizations with demonstrated capacity to affect poverty in a fundamental way.

Giving their tax-breaks back to the government would be a better start. Promoting an increase in taxation on a graduated scale would be a good way to continue. Voting for, and encouraging the election of more responsible political representatives could complete a cycle of wealth redistribution that might have a more salient effect. I doubt we will see any of these things happen any time soon. But until they do the poor will continue to gamble away the small amount of excess income they have in hopes of becoming one of the 825.

Interesting article which brought to mind two stories, one from the news and one from my personal life.

I read in the Boston Globe a while ago that one in every 20 households in my hometown area is a millionaire family. That's outrageous, but not surprising given the growing number of Bentleys and Maseratis I've seen tooling around, even in my little suburban enclave.

http://www.boston.com/news/local/massachus...e_millionaires/

The other story comes to mind based on the article's mentioning the need for more doctors who practice family care and that the median income is $161,000. My last boyfriend was a family care physician. I was at a party once out at this young Manhattan doctor's vacation home in P'town, and I was catching up with the host who was asking me about who I was dating, etc. When I told him I was dating a doctor, he and another guy were all, "Really...? Details, details." When I said he was in family practice, the host stopped me mid-sentence and said, "Honey, you can do so much better than that!"

Hmmmm! Maybe God isn't the One doling out the cash to people. Let's see if it's not God then who could it possibly be?....Could it be Saaatan!



No seriously though, many people are blessed w/ wealth & they're blessed w/ a free will (like all of us). We can will to share our mullah or we can will to hog it & be selfish. Perhaps there lies the lesson.

I have heard so many times it's better to give than receive. I really like to give. Receiving isn't so bad either but I really like to give.

Oh, wait a minute.... are we talking about money. Nevermind..... tee-hee.....

I'm actually one of the 4400. Now where did I put that anal probe?

[Edited to add]


I didn't ask for the Anal Probe...I DIDN''T ask for the Anal Probe..I didn't ASK for the Anal Probe...I didn't ask for the Anal Prooobe...and that was it.

I have no idea what that was all about but I would ask for "it"

Maddoggie, I'm assuming you're talking 'bout gadbearr's post of "giving" & "receiving". Otherwise, watcha been smokin?

Well I was originally making reference to the title by admitting I was one of The 4400 (people who disappeared and reappeared 50 years or so later. I was then inferring that they were abducted by aliens and we all know what aliens like to do on us...

Then after laughing at my own joke (because no one else does most of the time) it reminded me of the Nancy Mette's classic monologue from Passion Fish which ends with "I didn't ask for the Anal Probe" done in many different colors one after the other.

See...it all makes perfect sense...

Lol. Now that you've explained it, it's actually quite funny! ...

A fast-thinking mind going multiple directions is a sign of intelligence.

I think you were right the first time when you insinuated that someone had been smoking something!

QUOTE(eddiec. @ Nov 27 2006, 06:51 PM)

I really feel those numbers are flawed!

Actually I think they are flawed too, but can't back that up right now...

I find it difficult to believe $2m as an annual income number for that many people; I would be much more likely to believe it as a total assetts number...

Unfortunately what I also read from the article is that the rich get richer, the poor get poorer... and there is even more of a gulf between the super rich and the poor than we have hereto admitted. How long can a society last when the gulf is so wide and there is so much discontent?

I am very glad to see the amounts given to charities - though the last stats I saw showed giving to be DOWN...

I encourage everyone who can afford it to TITHE, give it to the three charities of your choice; you won't miss it, and it can really make a difference.

Most inmportantly - GET OUT THERE - and get involved; the changes you can make can rock the world.

Best

Rob

I know

I'll never be one of the rich people, unless I win the lottery

But it's ok, because I have a better sense of myself and those I am surrounded by. I know I can count on people and my friends are my friends because of who I am and not any material possessions.

sweetie-I got the reference to The 4400

I'm a geek as well