Published Sunday, October 15, 2000
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Being millionaire just isn't worth much
anymore
By WENDY BOUNDS
Wall Street Journal
Once it was the ultimate benchmark for wealth. But these days, a million
just doesn't buy clout like it used to.
Take Millionaire magazine. This month, the owners changed its name to
Opulence, in part because the word millionaire doesn't have the same
connotation it once did, according to the publisher.
Visitors to an online discussion about the TV show "Survivor" recently
argued that the $1 million prize really isn't that much.
And when a survey of millionaires in Dallas queried participants on what
qualifies as "big rich," the answer was at least $30 million; just $1 million
leaves you stuck at "small rich."
Simply put, "millionaire" is suffering from brand dilution. Even with the
recent stock market downturn, millionaires seem to be a dime a dozen. In
1999, there were an estimated 6.5 million U.S. households with total asset
value of $1 million or more, up 67 percent from 1996 by one count, and
double the number a decade ago. During the height of the dot-com boom,
scores of Millionaires on Paper (commonly dubbed MOPs) were made
overnight, and with each new high-flying IPO, the achievement depreciated
just a bit more. The number of individuals with adjusted gross incomes of
$1 million or more has nearly tripled since 1988, according to the most
recent IRS figures.
The term millionaire first surfaced in the early 18th century after a gambler
named John Law brought paper currency to France, according to a new
book, "The Rich and How They Got That Way," by Cynthia Crossen. The
introduction of paper, which proved a much more flexible monetary
instrument than metal, ultimately led to a surge of affluence in the country.
"So many people were becoming rich that the French needed a new word
to describe them," Crossen writes, "and millionaire was it."
Over time, the word million has come to claim a special place in our
vernacular. Idioms such as "Thanks a million" and "She looks like a million
bucks" have endured, despite inflation. A book search on Amazon.com
under the keyword "Millionaire" yielded 225 matches. And the game show
"Who Wants to Be a Millionaire" is now licensed to 80 countries
worldwide.
But the meaning of a million has changed considerably. Back in the 1960s,
a millionaire was somebody people gawked at, says Robert White, who
founded the Robb Report, a luxury chronicler, in 1967, and is now the
publisher of Opulence.
"Then, a million dollars was something unthinkable," he says. "You went to
college and worked your way up the ladder. There was no Internet
business where you could watch the stock go from 30 cents to $40 without
ever having made a profit."
The benchmarks we use to measure wealth have changed dramatically, too.
To make this year's Fortune list of 40 wealthiest Americans under 40,
contenders needed more than $430 million in assets; the No. 1 junior mogul
was Michael Dell with $17 billion. Perhaps a recent billboard for the
Financial Times sums it up best: "Last one to a billion is a rotten egg."
With $1 million meaning so little, people are becoming surprisingly casual
about spending such a sum - even dropping millions with a mouse click. In
December, for instance, one co-founder of Broadcast.com used the
Internet to purchase a Gulfstream business jet that cost more than $40
million. And last month on eBay, an Italian villa with 17 bedrooms and a
mausoleum attracted nearly two dozen bidders and reached nearly $3.5
million, still not high enough to clinch the sale. Meanwhile, the Neiman
Marcus Christmas catalog is offering a personal submarine - sleeps 11 - for
$20 million by telephone.
With the cost of "making it" having reached such lofty heights, there is the
potential for a seismic shift in how future generations will choose to make a
living. At Columbia University in New York, students often ask Professor
Martha Howell for advice about what classes to take - and whether she
thinks careers such as teaching are a waste of time. "I say, `How will you
supplement your income? Does your family have money?'" says the
socioeconomics professor.
In truth, she adds, today even $1 million wouldn't be enough to drastically
change the lives of her colleagues in the humanities. Perhaps it would buy
them a second home or long-term health care beyond what the university
offers. But it isn't a sum that would forever transform their day-to-day
existences. "A million dollars once represented freedom from want and
access to power," Howell says. "It was the imagined amount of money that
freed you from the human condition. It doesn't anymore. How can it when a
little cottage in Vermont costs $200,000?"
In Hollywood, the once-vaunted million is even the butt of humor. In
"Austin Powers: International Man of Mystery," the movie's villain, Dr. Evil,
wants to hold the modern-day world hostage, but he's been frozen since
1967 and his sense of currency valuation is a bit frosty. So when he
proposes a ransom of $1 million, he's greeted with polite coughing - never a
good sign for villains - and a cohort gently suggests: "Well, don't you think
you should ask for more than a million dollars? A million dollars isn't exactly
a lot these days."
"A million dollars once represented freedom from want and access to
power. It was the imagined amount of money that freed you from the
human condition. It doesn't anymore. How can it when a little cottage in
Vermont costs $200,000?"
DAK |
