In 1985, there were only 13 billionaires in the United States. Today there are more than 1,000.
Together with hundreds of thousands of newly minted multimillionaires, they live virtually untouched by an economic downturn that is having a crushing impact on many Americans, indulging in a parallel world of luxury where multiple homes, personal staffs and countless possessions grow along with their outsized fortunes. This creation of unprecedented wealth has brought us to a moment in American history that has been described as the "New Gilded Age."
Once such wealth was a rarity, confined to a small group of people. But today their ranks have swelled so large that the Super Rich have created a world of their own populated by men like Tim Durham, a financier from Indiana whose net worth is over $75 million.
When most of us need a new car we take a drive to the local dealer. When Durham looks for an automobile he flies to Europe.
“I’m actually in London because there's an auction here, some fairly significant cars,” he said as he waited for the auction to begin.
Durham, 45, made his millions from leveraged buyouts. His strength is buying undervalued companies. His weakness is cars.
“It's a great privilege to be able to do this,” Durham said. “These days you can stay right home in Indianapolis and do an Internet auction. But it sure is nice to be in London.”
On this day, he has his eye on a Rolls-Royce, which is on the block for a colossal sum. The auctioneer speaks loudly into the microphone: “Do I hear 3,350,000 pounds now?”
Durham finds the weak dollar puts him at a considerable disadvantage as the bidding exceeds $7 million. So he returns home without a new car — for now. That doesn’t mean he has to worry about hitching rides.
On any given day, when Durham visits his two-story garage, he can drive off with the Rolls-Royce he already owns, a Lamborghini, a Duesenberg or his newest, high-maintenance purchase — a $1.8-million Bugatti.
“I had a nail in the tire," he said. "It cost $22,000. Then I got another nail in it. And so I had to change the same tire twice.”
Many of the cars in Durham’s collection are worth between $1.5 million and $2.5 million. In total, he has over 70 cars, about 20 of which are housed on each level of his garage. The others are scattered throughout the country in museums and shows and in restoration. He has so many cars he sometimes loses count.
Durham grew up in a middle-class family — a typical background for the Super Rich. Today he lives a life of opulence in which money, or the lack of it, is rarely a concern. His main residence is a 30,000-square-foot, eight-bedroom home with a pool, two state-of-the-art kitchens, three bars, an exercise room, home theater and about 20 televisions, including two in his bathroom mirror.
As striking as Tim Durham’s lifestyle may seem for its apparent excess, he is far from alone; the Super Rich have become a species unto themselves. In this New Gilded Age, more people are making huge fortunes faster, and at a younger age, than ever before.
This unprecedented wealth has been sparked by advances in technology that have allowed leaps in productivity and in turn created money. An explosion in global trade allowed that money to be invested all over the world. The result is that extraordinary sums have rained down on hedge fund managers, private equity partners, real estate tycoons and entrepreneurs. They aren’t merely rich. They are the Super Rich.
According to the Federal Reserve, 49,000 U.S. households have between $50 million and $500 million in net worth and another 125,000 have between $25 million and $50 million.
Historian Ron Chernow authored biographies of J.P. Morgan and John D. Rockefeller — the founding members of the last Gilded Age. He says what strikes him is not the size of the fortunes today but the amazing number of them.
“It's the breadth as well as the depth that has absolutely no precedent," said Chernow. "We've never seen such an explosion, a veritable carnival of wealth being created in the United States — along with the very same kind of extravagant and conspicuous consumption that we saw in the late 19th century.”
Chernow says the American economy has gone through several periods of creativity and technological innovation that lead to new technologies and new wealth.
“In the period immediately following the Civil War, we had the advent of the railroad and the telegraph, the telephone, still photography, motion pictures," he said. "And all of these things created tremendously profitable new industries and also a particularly extravagant and conspicuous kind of consumption that was so gaudy and so novel in American history that it was dubbed The Gilded Age.”
The toys of the first Gilded Age are not so different from the toys of the modern Gilded Age.
“The toys of the rich tend to change very little over time," said Chernow. "The superwealthy people then wanted to have large estates, amass beautiful art collections, have gigantic yachts. You would find exactly the same thing today. I guess the place where there would be the most obvious difference is that the private railroad cars of the first Gilded Age have been traded in for private jets in the second."
That’s true for Tim Durham. The divorced father of four makes frequent use of a private jet that can take him, on very short notice, wherever he’d like to go. A few times a year he flies to Miami, where he keeps his four-bedroom, 100-foot yacht. The maintenance of this $6 million yacht runs Durham $5,000 a month — just for docking fees. That’s a steep bill, but for Durham it’s all a part of the game.
A math major at Indiana University, Durham went on to get a law degree and worked as a corporate attorney in the 1980s. Then he started to buy undervalued companies and turn them around.
“When I started, I bought a forging operation. I virtually had no money, so I borrowed everything. And you know, I netted around $14 million or $15 million on that first deal. It helps if your first deal works. And so that propelled me into a lot of other ventures.”
In 1998 Durham founded Obsidian Enterprises — a holding company he uses to acquire small and midcap companies. For him and many like him, making money when you don’t need any more, becomes a way to keep score in life.
“I don't think anybody can sit there and say, you know, 'I need another billion dollars,'" he said. "Does another billion dollars help Warren Buffet? No. He doesn't need it to live on. He can probably make it on the first 50. But why does he keep going? Because it's a challenge. And I think that that's really what making money is about. After you get to a certain level where you're basic needs are paid for. The rest of it is not necessary."
As for his own wealth, Durham insists he doesn’t need all the luxuries he can afford, but he doesn’t want to apologize for them either.
“You know, I think it's what a lot of people strive for," he said. "Everybody wants to live the American Dream.”