Monday, January 12, 2009

Ryan D'Agostino's 'Rich Like Them': revealing, banal

An unconventional look at America's richest people pays a visit to Austin ritziest zip code

By Edward Nawotka

Sunday, January 11, 2009

Ryan D'Agostino's mother probably never told him that it was impolite to ask strangers about their money. A former writer for Money magazine and now an editor at Esquire, D'Agostino visited 20 of the wealthiest ZIP codes in the United States to canvas homeowners for their success stories. The resulting book, "Rich Like Them," is a grab bag of "how I made millions" and "save your pennies" stories from tech entrepreneurs in Silicon Valley's (94027 — the richest ZIP), country clubbers in Las Vegas (89109), Manhattanites (10021) and our own local moguls.

The Austin ZIP he visits is 78730 — which is roughly bounded by Capital of Texas Highway (Loop 360), RM 2222 and the Colorado River — and was, surprisingly, the only Texas entry on the list of the 100 wealthiest. (D'Agostino used 2005 stats. 78730 fell off the list in 2007.)

In all, D'Agostino visited 19 towns in 11 states, walked 60 miles, knocked on about 500 doors and conducted 50 interviews.

Sure, he could have simply phoned, like any other reporter. But, D'Agostino argues, "Walking a few miles through a town on a regular day tells you a lot about its rhythms, the cadence of its goings-on, its values, even its history. Knocking on strangers' doors reveals a town's fiber, its small glories, its rust and dents, its quiet spots."

Rust and dents? Not in these neighborhoods.

Anyone who has done any canvassing knows it has its challenges. Big houses tend to be on big lots, with plenty of security and homeowners who work hard and therefore often aren't home. (During my college years, while canvassing for a group that advocated turning weapons factories into manufacturers of domestic appliances, I spotted an enormous house with a BMW in the drive, meaning someone was home. It turned out to be the residence of the CEO of Raytheon. His wife gave me $5 and told me to "go to McDonalds and get a real job.") D'Agostino encounters grumpy housekeepers, a threatening dog in Westport, Conn. (06880), and daunting gates in Beverly Hills (90210, natch), which he circumvents by tailing a UPS man and slipping onto properties after him.

Those people that do talk, he reasons, are likely to be worthy of reading about, "Because close-minded, unadventurous, uninteresting people wouldn't invite a stranger into their homes and share their life stories with him." (No, but someone lonely might. Ask anyone who's ever delivered pizza.)

D'Agostino organizes the book thematically, into a half dozen sections, with titles ranging from "Open Your Eyes" and "Luck Doesn't Exist" to "The Economics of Obsession" and "The Myth of Risk." He even defines different character "types" — The Visionary, The "Lucky" One, The Worker Bee, The Connector and The Renegade — an echo of Malcolm Gladwell's triumvirate of The Salesman, The Connector and The Maven in "The Tipping Point." This suggests, at least to the casual browser, that D'Agostino possesses a serious business intelligence.

But compared with Gladwell, whose new book, "Outliers," also tries to distill a formula for success, D'Agostino sounds a bit too much like an overeager junior executive.

Maybe it's his willingness to trust in complete strangers, or the way he labels cars and houses with price tags or the simple fact that so much of the advice he echoes is clich├ęd, along the lines of "be driven by more than money," "work for yourself" and "learn from failure." It's all timeless, if a bit pedestrian. D'Agostino admits as much when he writes: "Not everyone who makes $1.6 million a year is Lao-tzu."

When D'Agostino talks to a fortysomething Dellionaire, a woman he dubs "The Dell Lady," who was one of the first 900 employees of the company, she credits being in the right place at the right time but doesn't call it a lucky break.

"Luck?" says The Dell Lady, "Luck is when you're at your desk until 4 a.m. every night, chasing deals and trying to come up with the next big thing, and a few years later you look up and your broker tells you you're worth a few million dollars."

Perhaps, but for every Dell there are tens of thousands of other companies staffed by dedicated workaholics that never turn their employees into early retirees.

Another Austinite, Mark Banta, who founded a successful medical services company in his 20s, tells D'Agostino that he worked 15- to 20-hour days to make himself a success.

Work hard. That's timeless, if a bit dull, as far as advice goes.

The Austinites depicted in the book come across as relatively modest about their success, something Banta confirms when he tells D'Agostino that the city has "a lot of seven-figure folks, and you also have a lot of eight-figure folks, too. You just wouldn't know it. They wear blue jeans and golf shirts." They are also welcoming. D'Agostino remarks in passing that Austin was where he had his highest degree of success getting good interviews — about 40 percent compared with an average of 10 percent elsewhere.

As one would expect of a book based on the premise of knocking on doors in expensive neighborhoods, much of the advice D'Agostino gets concerns success in the real estate market. Austinite Steve Wolford, whose occupation isn't disclosed but who seems to be some sort of real estate investor — it's a signal weakness of this book that D'Agostino doesn't always make such things clear — greets D'Agostino while barefoot and wearing "khaki shorts and a faded lavender T-shirt." He then invites D'Agostino into his 4,300-square-foot custom built house to take in the view from his back deck.

"This view — this is my insurance," Wolford says of the vista, which encompasses the downtown Austin skyline and Lake Austin and guarantees that the house will always be sellable.

"Insurance is a good thing, and Wolford was right: Someone would always want that view," writes D'Agostino in agreement — putting Wolford's statement in the same category of seemingly unimpeachable wisdom as statements from earlier in the book that people "will always want to live on the water" and "forever want to live in Westport, Connecticut."

Such pronouncements underscore the glaring, fatal flaw in "Rich Like Them": A fancy house is no barometer of wealth. Since the recent mortgage meltdown, it's even among the most suspicious assets: "jumbo" and "Alt-A" mortgages blew a lot of hot air into the housing bubble and look to be among the largest categories of defaults in 2009. People who claim to have made their money in real estate cannot necessarily be trusted.

Even so, there are a number of heartening cases in the book that illustrate how diligence, intuition and, yes, a bit of luck can pay off handsomely. As it turns out, D'Agostino's "general philosophy of success—oversimplified," arrived at after so many interviews, boils down to little more than common sense: "never slack[ing] off and periodically socking away untold piles of cash into your bank account."

Tenacity + compound interest = wealth. Now that's advice you can bank on

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