the following is a CNBC original production have nice jewelry way you won't have a couple great houses way there's a paradox to the west you pick the number is a hundred million is it 200 million i don't know what the number is over some not you know what the numbers for you i would rather not say it makes me nervous that they're growing up a lot of money i think there's a lot of people out there that's how we're so lucky so why don't we just shower our children with everything that we didn't have growing up [Music] I don't need this just to live what do you say to somebody out there who's just sort of middle-class person when you tell them when they look at the life of your league you know I don't know what's a towel I don't apologize for it lot number 24 1933 rolls-royce phantom to continental you have all minus r1 stunning rolls-royce it is rolls devices long been a symbol with great well she was targeting these once such wealth was a rarity confined to a small group of people today their ranks swell swell so large that the super-rich have created a world of their own have 75 populated by men like Tim durham a financier from Indiana is worth over 75 million dollars 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 durham 45 years old made his millions from leveraged buyouts his strength is buying undervalued companies his weakness is cars everything they do have phone bidding and internet bidding so these days you can stay right at home in indianapolis and into the conduction sure is nice to be in London it's a great privilege to be able to do this on this day he has his eye on this rolls-royce which is on the block for a colossal some Oh they have 250 3.5 that's the big step thank you durham finds the weak dollar puts them in a considerable disadvantage as the bidding exceeds seven million dollars [Music] 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 during visits his two-story garage he can drive off with the roles he already owns a Lamborghini a Duesenberg or even this 1.8 million dollar bugatti there are several worth between one and a half into a half-million how many cars you have in here in here about 20 I've got 20 on this level and maybe 15 or 20 on the level below and then maybe 30 or 40 kind of a scattered around the country and in restoration and certain museums that kind of thing so almost 70 cars right around 70 lose count sometimes you have a favorite down here welded the Gottis the newest and so it's one of my favorites what's it cost to change the oil I don't know what the tires are expensive ahead i nail in the tire cost way 2022 thousand dollars that the change the times that when you hire durham grew up in a middle-class family typical of his peers at the very top of the income ladder today he lives a life of opulence in which money or the lack of it is rarely a concern his main residence is this thirty thousand-square-foot eight-bedroom home with a pool to state-of-the-art kitchens three bars an exercise room home theater and about 20 TVs including two in his bathroom mirror we want paper the ceiling and which is another unusual treatment but now like my decorator can do a lot with an unlimited budget so and that would want you back to guide came out to be an unlimited you're a a decorative favorite time as striking is Tim dirhams lifestyle macy for its apparent excess he is far from alone the super-rich have become a species unto themselves welcome to the new gilded age where huge fortunes have been made by more people faster and at a younger age than ever before this unprecedented wealth has been sparked by advances in technology which has brought leaps and productivity which in turn has created vast amounts of money an explosion in global trade has allowed that money to be invested all over the world the result extraordinary sums that have descended on hedge fund managers private equity partners entrepreneurs and real estate tycoons they're not merely rich they are the super rich in 1985 there were only 13 billionaires in the u.s. today there are more than a thousand according to the Federal Reserve 49,000 us households now have between 50 and 500 million dollars in net worth and a hundred twenty-five thousand households are between 25 and 50 million dollars what strikes me today even much more than the the size of the greatest fortunes is just the staggering number of fortunes it's the breath as well as the depth that has absolutely no precedent historian Ron chernow authored biographies of JP Morgan and john d rockefeller the founding members of the last Gilded Age we've never seen such an explosion a variable carnival of wealth being created in the united states along with the very same kind of extravagant and conspicuous consumption that we saw up in the late 19th century the history of the American economy is that periodically because through these great bursts of creativity and technological innovation where new technologies and new products are spawned that in turn create colossal new fortunes in the period immediately following the Civil War we had the advent of the railroad Telegraph the telephone still photography motion pictures and all of these things created tremendously profitable new industries and also a particularly extravagant in conspicuous kind of consumption that was so gaudy and so novel in American history that it was dubbed the gilded a I assume the toys of the incredibly rich then are somewhat similar or analogous to the toys of the incredibly rich now the toys of the rich tend to change very little overtime the super wealthy people then wanted to have large estates a mass beautiful art collections have gigantic yachts would find exactly the same thing today I guess the place where they 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 certainly true for 10 during the divorce father-of-four makes frequent use of a private jet that can take him on very short notice wherever he'd like to go you're wasting a big portion of your day now when you go commercially so it is a nice convenient to have nice is an understatement for research purposes we took a ride on Durin's play to see how the other half lives we flew on dirhams plane to dirhams boat which he keeps in Miami the four-bedroom 100-foot yacht which sells for between six and seven million dollars runs durham 5,000 a month just for docking fees how many times you actually been on this boat in the last year maybe four times greater four times a year yeah it's not a great allocation of resources now but so what I mean we're not going to make you a poor man right now no not at all it's just I'm probably harder on myself you know making money is a game and when I don't play the game well I get upset with myself a math major at Indiana University Durham went on to get a law degree and worked as a corporate attorney in the eighties then he started to buy and sell companies i learned how to look at undervalued companies and look at the turnaround situations when i started about a forging operation put a machine shop with it virtually had no money so Brown everything and you know I think I met it somewhere around 14 15 million on that first deal she made 15 million dollars off yeah we'll deal my first deal so that helps 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 mid-cap companies for Durham and many like him making money when you don't need anymore becomes a way to keep score in life keeping score is important it is keeping score and I you know I don't think anybody can sit there and say you know I need another billion dollars you know I mean is this another billion dollars help warren buffett know you can probably make it on the first 50 but why you 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 know your basic needs are paid for the rest of it is not necessary have you gotten to that level where I don't need it oh yeah sure I don't need this you know you don't just to live you know what do you say this to sort of somebody out there who's trying to make it work every single day is just sort of a middle-class person will tell them when they look at the life that you're leading well I you know I don't know what to tell i'm not you know I don't want to apologize for it and I think it's what a lot of people strive for because you know everybody wants to live the American dream obviously had great success as its defined and i would assume outcome we come a wealthy man you could describe me as wealthy and when you hear me say that you don't believe it makes me cringe a little SETI really wealthy and I think about okay if I'm wealthy what's the responsibility that comes with it [Music] it's 6am in an upscale neighborhood on Long Island you don't get to be master of the universe by sleeping in 43 year-old Anthony scary mucci grabs his liquid breakfast and is out the door a 12-hour workday starts the moment he gets in the backseat of his car heading to manhattan he makes a call to a partner in Tokyo about a potential investor ok so he's running like a billion three he's got it spread out into different hedge funds and different asset classes scary mucci with an estimated net worth over 85 million dollars is a beneficiary of one of the greatest money-making creations in the history of Wall Street the hedge fund and investment fund that uses borrowed money to enhance its returns and is only open to high-net-worth clients average capital his firm raises money from wealthy individuals and institutions it invest that money with promising young hedge-fund managers once we find the manager to give that manager anywhere from 25 to say 50 million dollars of capital and then exchange for that capital and give us a piece of their business share that piece of their business with our underlying investors scary moochies career has unfolded during the Golden Age of hedge funds which now managed two point six trillion dollars alright guys this unprecedented infusion of cash has made many in the business incredibly rich including scary moochies obviously had great success as its defined and i would assume you've become we come a wealthy man fair to say yeah you could describe me as wealthy and when you hear me say that you don't believe it makes me cringe little exegetes my really wealthy and I think about okay if I'm wealthy what's the responsibility that comes with that I've met a lot of rich people you get the spoiled entitled person and you get the hard-driving person to you know I mean Jesus whole blend like many of today's Wall Street Titans scary mucci grew up middle class and has always been a striver financially and academically i wanted to break out of that middle-class band of wealth no question about that you're first getting the family to go to Harvard Law School yeah definitely i can tell you there's no scaramouche in law library at harvard law school that i can tell you after law school scary mucci joined goldman sachs within a decade he was running his own hedge fund soon after selling that hedge fund scary mucci launch sky bridge in 2005 there's a two by hedge fund conference in march i want to get us to the conference's great networking opportunity scaramouche he makes his money the old-fashioned way with long hours of hard work and a relentless drive he may not have to work but boy does he have been traveling crazy i'm probably putting 70 to 90 hours a week on a given week i'm probably on the road something like a hundred 225 business days a year despite the tough economy there are still plenty of people with plenty of money to invest with his pitch at the ready Cara mucci spends a lot of his time hunting for new clients we just did a deal with a guy at a hundred million other management right we gave him 50 and 150 and we would have to raise them your strategies which guarantee often conducts business here at the exclusive core club it's populated by the newly money delete most of them from Wall Street will stretch the club opened in 2005 scary mucci a founding member paid a hundred thousand dollars to join it's an oasis for investment bankers hedge fund managers and private equity partners people who are both envy and occasionally scored there's righteous people out there that will throw eggs and tomatoes at the whole wall street crew there's another group of people say you know what a lot of giving its come from Wall Street one sale by fortune magazine as the king of Wall Street billionaire Stephen Schwarzman the founder and CEO of the private-equity firm the blackstone group with soon Hillary for spending millions to throw himself with 60th birthday party a year after that foresman one you did praise when he gave 100 million dollars to the new york public library fairly or not foresman has become the public face of Wall Street's excess but there's an endless parade of people you've never heard of who like Schwartzman have each earn hundreds of millions if not billions of dollars over the last several years even in the financial community accustomed to extraordinary wealth that's attractive scrutiny and criticism the hedge fund basically that's charging two percent and twenty percent of the profits that simply is as close to highway robbery when Bill Gross attacks the new heights of Wall Street's compensation he knows what he's talking about he's the founder of pimco one of the largest fixed income investment firms in the world and a billionaire himself we spoke to him at his weekend home in newport beach california located just a few miles away from his main residence we don't need a billion to a billion and a half dollars worth of income per year in order to justify your assistance grow spends a widely-read monthly letter to pimco investors this one entitled enough is enough attacks wall street's new rich the rich are different you right but they're not necessarily societies Paragons and let's face it I'm wealthy to your one of the wealthier men in this country yes Suh and I share a cornucopia of benefits and I'm not dismissive of that open space and hedge fund manager that's making a billion dollars a year is really looking at the scorecard not at something that he or she can buy I mean after the the first house or two and after those two or three majestic paintings and of course the airplane if hedge fund managers want to keep score let them go out and play a game of soccer or basketball these days with all the money that's descended on their industry grow says those hedge fund managers don't even know to be at the top of their game to make a fortune for example a billion-dollar hedge fund with a modest annual return of ten percent will generate 40 million dollars in fees a lavish windfalls lit by a very small group of people it wasn't always that way yeah really good numbers but this quarter Oscar Schaefer the manager of the 2.2 billion dollar hedge fund OSS capital has been in the hedge fund business for over 40 years back in the sixties give money to a hedge fund was like giving dirty pictures in an alley so what happened what changed well what happened was a lot of money was thrown at it you know in the eighties if you couldn't throw football or couldn't play guitar you can make a million dollars before you're forty then people got the hedge fund business it was easy to it and it's still pretty easy but now it's even easier why is it even easier because there's more money in that business if you have a lot of assets even if you have poor performance you can make a lot of money more money than Schaefer could ever have imagined when he started out i think when i graduated from Harvard if I'd going into a law firm if I became a doctor from became an analyst or hedge fund manager we don't make the same not anymore the stratospheric sums being made on Wall Street today have led to a new kind of disparity in wealth among the professional classes the highest-paid doctors our neurosurgeons and according to the medical group management association in 2007 the top 1% of neurosurgeons earned an average of 2.7 million dollars in that same year the top 25 hedge fund managers earned an average of 877 million dollars and according to institutional investors alpha magazine that top 25 made five times as much in 2007 as they did in 2001 schaeffer's hedge fund returned 26-percent to investors in 2007 which means that he and a handful of his partners took home over 130 million dollars for their work we've had extraordinary year this year and you run a fairly sizable hedge fund so we've been talking a lot about money here obviously Oscar schaeffer's having a pretty good year this year correct correct or paid very Howie there's no other business back then or now where you can make as much money enough money to afford the beautiful Vista from a penthouse apartment on Central Park for Shaffer the view from the top is dizzy and he's far from alone historian ron turner says a major difference between the Gilded Age of yesterday and today is the number of people able to take advantage of the riches to be made on Wall Street Wall Street if you go back accenture more was dominated by very small private partnerships limited amount of capital where is today there are some many firms and these are gigantic friends wall street is just don't you think about in terms of number of people and the command of money yes i have more stuff now I've got more homes and I've got access to different things that are really fun and really neat ok but I had enough you know back then I don't remember saying geez i really need to have a private aircraft when I was living as a middle-class kids on long island in the nineteen seventies for Anthony scaramouche eat the definition of wealth and its ultimate possibilities are hard to quantify want to have nice jewelry great you want to have a couple great houses great you know there's a paradox of the wealth David Wright you pick the number is it a hundred million is it 200 million for my parents maybe it's a million okay i don't know what the number is but over some know what the numbers for you i would rather not say I'm not quite there yet let's put it that way do you think the wealthy among us believe that they are worth just as little as everybody else on a human level the ones i like do the ones who don't those are the nurse assists and they're not that fun to be with I try to help them understand why they need to keep spending why they can only live in one mention for two years until they get tired of it and get the next one [Music] bill Fisher has become rich by catering to the rich his travel agency Fisher travel charges $100,000 just to become a client yep you heard that right hundred thousand dollars that become a client and after that twenty-five thousand dollars a year to stay on as before they pay for any travel that you booked for them exactly and they pay this they paying for those princely sums Fisher and his staff fly around the world making sure the places their clients stay fit for royalty I like to travel away the clients travel to know exactly what they need and what they want and while fishes clients aren't Dukes and duchesses they do share the same gilded lifestyle young people 2013 sporting usually would do a three children travel with a nanny so these are all the conveniences that they want because they live in these markets home and they don't want to travel any differently when you got to the top they want ironed out we joined Fisher on a trip to Turks and Caicos where he went to inspect a resort called parrot key located on its own private island he was greeted at the airport by the property manager holika trap and made his way to the island the only way you can get there by private boat parrot key is a favorite refuge of Wall Street's heavy-hitters mid-price villas here cost twenty two hundred dollars a day homes like this one rent for ten thousand dollars a day comes with a full staff and Butler and he's very sellable Fisher has been booking trips for the wealthy for over 25 years but it's only in the last few that the ranks of those able to afford his services have exploded plenty of clients that we have today are in the billion-dollar League and is more clients than places to get into the demand is unbelievable bigger than you've ever seen yes what kind of money are we talking about the people are willing to spend we did a wedding in Florence and that was 15 million you know we break down walls for people to give the larger accommodations but they don't happen i'll quote in general manager Jason Wolfgang I need three bedroom suite this is BB only have two bedroom seat I said no that may be it speak to your engineer break down a wall and connect another own music with you tomorrow you break down walls in hotel is next equals just for somebody may come and stay for it be you have your three bedroom suite if wall street has a really rough couple of years here is your business i don't think so i think the people that we're dealing with a pretty isolated I mean they'll have their ups and downs but these are people that could basically for their everything but Turks and Caicos is not an island unto itself a quick jaunt around another island of great wealth Manhattan reveals the lavish spending of the new super rich knows no bounds recession be damned according to wealth research from Princeton associates eighty percent of people with a net worth exceeding 30 million dollars say they plan to spend more in 2008 than they did in 2007 doesn't seem to be much of a recession around the fifth avenue and 57th Street location of town these twenty-five hundred dollar pumps and others like them are so popular than Saks Fifth Avenue recently expanded shoe department it's so large it was given its own zip code I love she's the shit looks with designer shoes and the I know it's not a question buddy at a recent store opening gucci debut $80,000 handbags but they're not even close to the highest priced item in the store this big trunk is probably the most expensive item in the store is a quarter-of-a-million dollars audemars piguet customers shop for watches that cost more than some homes we start a 10,000 art and the most expensive watch itself with a diamond on it retails for 800,000 arson the potential even within economy which is already tough right now is unbelievable at bolgheri sales of one-of-a-kind jewelry like this 1 million dollar engagement ring or its fastest growing segment and as for the ultimate prize the private jet in 2007 despite soaring fuel costs sales were thirty four percent higher than they were in 2001 and that's not the only spending that's gone sky high in stark contrast to the wretched housing market for the rest of the country the high end of Manhattan real estate has never been hotter this building 15 central park west is just the latest example an ultra luxury condo and a monument to exceptional wealth the building's 202 apartments were each sold for an average of ten million dollars long before they were completed now that the building is open tenants are being offered millions more to sell 15 CPW is home to a who's who of the new super rich goldman sachs CEO Lloyd Blankfein spent 26 million dollars on his pad google exec only Khorasani shelled out 29 million for his digs and hedge fund manager daniel loeb outspent them both paying 45 million dollars for a pen taps where does the desire to spend such vast sums come from and why are so many of today's super rich willing to spend so lavishly those are questions only a shrink could answer i try to help them understand why they need to keep spending and why they can only live in one mention for two years until they get tired of it and get the next one psychiatrist carry soccer wits council CEOs Wall Streeters and entrepreneurs on corporate strategy in negotiation but inevitably their conversations turn to the personal issue of conspicuous consumption there are people who choose to live extraordinarily conspicuous lives in some ways with many many homes with the plane with all the accoutrements so to speak that comes with great wealth what differentiates them in terms of the way they choose to use their money the ones who come from deprived backgrounds the ones who have deep insecurities emotionally for whatever reason it so they need to prove something with this wealth and so it's not just enough to have it and to have a more than comfortable life and to give money to charity they have to go beyond that and show everybody that they've really really made it I think spending money on these conspicuous items is also a form of competition and that's one of the ways they can flex their muscles is and who has the bigger house or the better plane do you think the wealthy among us believe that they are worth just as little as everybody else on a human level the ones who I like do the ones who you know I would probably want to have dinner with feel that way the ones who don't who have this air of superiority and who really believe that somehow they're better human beings because they have bigger bank accounts those are the narcissists and they're not that fun to be with but they build a lot hours you know I've got plenty of work to keep me busy but you're you're welcome nobody else I don't know what I'm gonna keep working i don't know if i can afford to have a hugely different lifestyle to be honest even with 10 million dollars yeah it's absolutely shocking [Music] you might think how steiger a fifty-year-old Silicon Valley entrepreneur worth a few million dollars could finally take some time to relax but steiger is eternally on the run that is the vice president of marketing at a software company good morning he works 12-hour days and weekends he's now in his 12th start up in 23 years that would assume you've seen a lot of people make a lot of money i have i've seen hundreds of people who have made at least single-digit millions if not tens of millions of dollars what are you doing after school huh how much money do you have we have between 3 million and three and a half million dollars that's our network most people in the country would say that is a rich man they would but it's all relative three million dollars it's not as much as it used to be you can't afford to have a butler and the limousines and things like that if you take into account things like saving for retirement for healthcare for a college education don't get me wrong we don't have to worry about our next meal or about her next mortgage payment but still it's not like when we were younger thinking like you would have a million dollars with a free a half-million-dollar network though what I'm hearing you say is you do worry about money absolutely yeah and so it has come to this more than 9 million people in the US are millionaires but many of them don't feel rich it's a condition so common it has a name middle-class millionaires do rich people buy more detergent and poor people Robert Frank and economics professor at Cornell University explains the phenomenon we have people who by any measure might be described as wealthy but who don't feel wealthy at all because they're in such proximity to the incredible wealth yes Brian in every group the patterns been the same so if you're a wealthy person the people at the top of your group will have gained wealth much much more than everyone else in the group so ninety percent in the of the people in any group feel poorer than before in relative terms the millionaires used to be able to afford nice views of central park west from a penthouse apartment now the billionaire's get those apartments in an apartment building in Brooklyn New York a woman worth more than 10 million dollars still slips up the stairs of a six floor walk-up in 1996 Laurel to be a freelance business writer making about forty thousand dollars a year started a website for media professionals called media be stroked by 99 we're making my name off the job listings and that's when it really started to pop and I raise capital in two thousand and then built the business from there in july 2007 to be sold her website for 23 million dollars more than enough when the ranks of the rich or so she thought oh my gosh you should have seen my family's faces that's gonna be life-changing right well that's what everyone said I was expecting a huge huge left hinge and it hasn't panned out yet after taxes to be ended up with about 10 million dollars she and her husband still live in the apartment she bought in 1994 they want to buy a larger law across the river in Manhattan but on that island a few million may not be enough for the home of their dreams you walk into a space that is four million dollars or upwards of four million dollars and it's no bigger than this apartment and it's dark I know it sounds like a huge amount of money but it's not in New York City right but you're you're wealthy you you little bridal bouquet I don't feel it i don't know why i'm gonna keep working so are you any happier with the 10 million and you were before I would say there's definitely less anxiety around money i don't know if i can afford to have a hugely different lifestyle to be honest so you decide what you are and then justice professor Frank described it was only when to be became a multi-millionaire that she recognized the huge Gulf that separates the merely rich from the super-rich when we first got a windfall as i like to call it i called up everybody I had ever met in business who was really wealthy and ask them a bunch of questions what are your luxuries that you expend on and one of the guys said oh you're going to want to get a percentage in a jet as it well I later discovered you've got hundreds of millions of dollars there's no conception of someone like me and what you can and cannot afford so it was kind of absurd it would be gone in a second if I did that so what was your takeaway from all those conversations after talking to really rich people i felt very humbled and I felt lucky that I could do anything at all which is by an apartment and have some savings put away for a rainy day and for retirement I was shocked by how different they were living life then how I was going to live like we're in a new Gilda eh this is the new railroad baron these businesses these hedge funds it's unbelievable what's going on out there you're just a bit player than aren't you oh yeah i feel that way with 10 million dollars i guess back I've told my children that majority of our estate will go to charity I do feel that to leave them everything would be a mistake you're really going to give most money we are definitely [Music] in October 2003 Leinster has got married in royal style the wedding attended by 500 guests was held its turns 15,000 square foot mansion in newport beach california the lavish affair included a 100-person staff a 60-year five-thousand-dollar wedding cake tree and fifty thousand flowers they're not all told stearns walk to the altar set him back a million dollars I Glenn stearns i glanced turns human de Bona take you in the paper banner for richer for poorer for richer for part that's hard to say Stearns is far from poor but given his humble origins it's understandable why the mere mention of the word makes him tongue time stearns grew up in this 800 square foot home in a working-class neighborhood of Maryland he failed fourth grade and fathered a child when he was 14 years old I thought the world was over but now you look back on it as an important beginning I think you need to learn through ping maybe you know and you need to find what is the the positives of anything you do by age 25 stearns had turned his life around he graduated from college with an economics degree moved to California where he got a job as a loan officer and started his own mortgage company today stearns company's financial services firm has brought the 44-year old a privileged existence and an estimated net worth inaccessible hundred million dollars but because turns believes his heart scrabble beginning was crucial to his success he tries to keep his children grounded it's about opportunity son and opportunity sometimes comes like that you gotta seize it ok turns has three sons from his first marriage a daughter with his new wife Mindy and triplets on the way the daughter stearns fathered at age 14 Charlene now has a child of her own and is expecting another it makes me nervous that they're growing up with a lot of money i think there's a lot of people out there that say well we're so lucky so why don't we just shower our children with everything that we didn't have growing up but the best way I think to make a difference in your child's life is to give them their own empowerment allow them to grow and feel that they are responsible for their own success to help instill that sense of responsibility stearns insists that his kids do chores to earn money fourteen-year-old Colby removes algae from the pond ten-year-old trevor was mowing the lawn you're not then the graph know you got your water go stearns and his life lessons are always close by you don't quit a job in the middle of the job all right but</fon