The Difference How Anyone Can Prosper in Even The Toughest Times

by Chatzky, Jean

• ISBN13: 9780307407146
• ISBN10: 0307407144
• Edition: 1st
• Format: Paperback
• Copyright: 2010-03-02
• Publisher: Currency

Summary

Trusted financial coach Jean Chatzky shares the secrets her groundbreaking research of the self-made wealthy has uncovered so that anyone can break through the barriers that stand between them and true financial freedom. Find out why it's important to:

Author Biography

JEAN CHATZKY, award-winning journalist, bestselling author, and sought-after motivational speaker, has created a global platform that is making significant strides in helping millions of men and women battle an epidemic with devastating impact–debt. Jean is the financial editor for NBC’s Today show, a contributing editor for More Magazine, a columnist for the New York Daily News, and a contributor to The Oprah Winfrey Show. She also hosts a daily show on the Oprah & Friends channel, exclusively on Sirius XM Radio.

She is the author of numerous books, including Pay It Down!: From Debt to Wealth on $10 a Day, a New York Times and BusinessWeek bestseller. Her previous book, Make Money, Not Excuses, was a Wall Street Journal and New York Times bestseller.


From the Hardcover edition.

Table of Contents

Acknowledgments	p. ix
Introduction: What's the Difference?	p. 1
Meet the Neighbors	p. 10
Choosing The Difference	p. 36
Do I Have to Be a Rocket Scientist or a PhD?	p. 58
Ding, Dong, Your Passion Is Calling	p. 77
Get Happy (But Not Too Happy)	p. 96
In Praise of the Do-Over	p. 119
Taking Risks That Make Sense	p. 140
The Kevin Bacon Principle	p. 162
Grazie	p. 181
Working Hard and Working Smart	p. 194
The Healing Power of Saving	p. 216
Make Your Money Work for You	p. 236
Afterword	p. 257
Index	p. 259
Table of Contents provided by Ingram. All Rights Reserved.

Excerpts

Chapter one

Meet the Neighbors

The New Rich List

Back in the early 1990s, I was—for a short while—a reporter/ researcher for Forbes magazine. During my tenure there, I got a few plum assignments, including spending one weekend fact-checking the first interview Michael Milken had granted from prison and fact-checking another on the businessman who would eventually become New York’s mayor, Michael Bloomberg. I suppose I did well enough because I was soon tapped to do a little legwork on Forbes’s lists of billionaires and richest celebrities.

The preeminent Forbes rich list, of course, is the Forbes 400: the list of the country’s four hundred wealthiest Americans. It has been around since 1982, when just three families made up 13 percent of the list. There were eleven members of the Hunt family, fourteen Rockefellers, and twenty-eight du Ponts. In 2007, on the list’s twenty-fifth anniversary, these dynastic numbers had dwindled to almost nothing. There was one Rockefeller (David Rockefeller, Sr.), one Hunt (Ray Hunt), and no du Ponts. Fifty people fell off the list completely. Forty-five were newcomers—nearly half of whom had made their money in hedge funds and private equity (like Pete Peterson of Blackstone and David Rubenstein of the Carlyle Group); the others were a mixed bag, including Frank and Lorenzo Fertitta of the Ultimate Fighting Championship, a pay-per-view fight fest.

The point, notes Columbia University researcher Wojciech Kopczuk, is not just that wealth is less concentrated (the share of wealth in the hands of the top 1 percent of Americans has fallen by half over the last eighty years). The real point is that it has moved into a whole new set of hands. Over the past twenty-five years, as these families have lost their historical positions, a whole new set of people has gotten rich. Some are entrepreneurs that have made a splash. Others are high earners on Wall Street, in corporate America, at law firms or consulting companies. Still others bought the right stocks (or were handed the right stock options) at particularly opportune times.

This is an incredibly optimistic sign—and it’s not just coming from the pages of Forbes. According to the Harrison Group, a research firm in Connecticut, three-quarters of the wealthy families in this country—and nearly all of those who qualify as upper middle class—didn’t start out wealthy. Eighty-three percent came from the middle class. They’ve accumulated wealth over fifteen years on average, which means that some of them got there in significantly less time than that. And here’s a bonus: When you look at the wealth of the pentamillionaires (the folks with $5 million or more), only one-tenth of their money came from passive investments. They made the rest of it themselves. Survey after survey I pored over while researching this book shows that a shrinking percentage of today’s wealth came through a bequest. Research from the Spectrem Group, based in Chicago, found that only 2 to 4 percent of today’s millionaires became rich that most old-fashioned way. This means you no longer have to be born into wealth. Despite the hurdles presentd by the markets in 2008, the American dream is alive and thriving—and you have the ability to achieve it.

Where Are Women in This Mix?

The tide for women is turning a bit more slowly—but it is turning, nonetheless. Remember, there are two ways for people to become wealthy: They can inherit money or they can earn it. (Some people might argue that marriage is a third proven way to get wealthy. I don’t put it on the list because it can also take your financial life in the opposite direction. Nine percent of our survey respondents blamed divorce for a negative turn in their fortunes; 8 percent blamed marriage itself.)

Interestingly, the fact that the ranks of the wealthy are mor

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Excerpted from The Difference: How Anyone Can Prosper in Even the Toughest Times by Jean Chatzky
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