Friday, November 4, 2011

The Wealthy 1% and 5%

What's the first thing you do after buying a $43.5 million, 6,000-square-foot oceanfront estate on 6.5 acres in Sagaponack, Long Island, the country's most expensive zip code?

According to a June 2, 2010 post on the AOL homepage, if you're hedge fund billionaire David Tepper, you tear it down -- along with its guesthouse, swimming pool and tennis court -- to build an even bigger mega-mansion.

According to the Southampton Patch, Tepper bought the home in 2009 from ex-wife of former New Jersey governor Jon Corzine, in the area's most expensive transaction of 2010. In April, he got a permit for the demolition, and two months later the site was completely cleared.

The new house is about twice the size of the original, with ocean views from every room, "a sunken tennis court, a three-car garage, a widow's walk, second-floor decks, including one with a Jacuzzi, and a covered porch," according to the minutes of a recent town board meeting at which the construction was reviewed.

From Wikkipedia, we learn that in 2009, Tepper's hedge-fund firm earned about $7 billion by buying distressed financial stocks (including acquiring Bank of America common stock at $3 per share) in February and March of that year, then profiting from recovery of those stocks. $4 billion of these profits added to Tepper's personal wealth, and in March 2010, the New York Times reported that Tepper's success made him the top-earning hedge fund manager in the world in 2009. In 2010 he was ranked by Forbes as the 258th richest person in the world, clearly in the top 1% of America's privileged.

Before we point our fingers at others, though, we middle-class Americans should realize that we are all in the top 5% of the world's wealthiest people.

So we all need to reflect on the story Jesus once told of a well-to-do farmer who had an exceptionally good harvest one year, then said to himself, “I will tear down my barns and build bigger ones, and there I will store all my grain and my goods. And I’ll say to myself, ‘You have plenty of good things laid up for many years. Take life easy, eat, drink and be merry.’”

God labeled him a fool, one whose life was about to come to an abrupt end.

And as with all of us, he left it all behind. Every bit of it.
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