Career Salaries: Meritocracy vs. Family Money
You can’t pick your parents. Some of us are born into average families, while others’ last names are Trump, or were lucky enough to be adopted by Angelina Jolie. Does coming from a wealthy family guarantee high career salaries? Chelsea Clinton landed a six-figure job before finishing college, and Paris Hilton landed on the Internet. Can family wealth actually sap ambition?
Recently, the New York Times featured an article about one of the more interesting career salaries and famous families. Nathaniel Rothschild is a direct descendant of the legendary Mayer Amschel Rothschild, who arranged funding for Britain’s war against Napoleon, amassed enormous wealth and advised everyone from royalty to industry.
Born into old money, did Nathaniel Rothschild manage to amass nearly a billion dollars through hard work? Was it easier for Rothschild to become rich, with his ultimate old world connections, or for self-made American Ross Perot to get his first billion?
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Financial Planning For Wealth
In his younger years, Nathaniel Rothschild was reportedly a big partier, avid drinker and Playboy, jet-setting around the world with actresses and models. The 25-year-old finally took a job as an investment analyst for the Gleacher firm in 1995. According to the Times’ article, Chairman Eric Gleacher is an associate of Jacob Rothschild (Lord Rothschild), so it’s plausible that family connection may have helped him secure the job. Ironically, it was someone who would not hire Nathaniel who changed his fortunes.
At Gleacher, Nathaniel toiled away doing trainee investment banking work, looking for something bigger and better. During a cigarette break outside the office, Nathaniel met an ambitious 29-year-old investor, Timothy R. Barakett, who was trying to raise money for his Atticus Fund. Nathaniel asked him for a job, but Barakett said “no.” However, a year later Barakett took Nathaniel on as a minority partner in the Atticus Fund, and assigned him the task of using his family and other connections to raise new capital.
Above Average Job Salaries: Payout for Connections
The Atticus fund has grown tremendously over the last three years; its assets surged from $14 billion from $2 billion. In 2005, Nathaniel Rothschild was reportedly paid $80 million in compensation, and earned more in 2006. While none of the Rothschild fortune was invested in the Atticus Fund, certainly Rothschild family connections were instrumental in his success. In five years, Nathaniel is nearing billionaire status via his partnership stake in Atticus Capital, and private equity investments in Ukraine and Eastern Europe.
Before Career Search Engines: Getting Ahead Old School
On the unconnected side is Ross Perot. Long before becoming a multi-billionaire, political gadfly and one-time presidential candidate, Perot came from very humble beginnings in Texarkana, Texas, where his dad was a cotton-picker. Perot joined the Navy and climbed the ranks. After resigning his commission, he became a salesman for IBM in 1957, reportedly filling his sales quota for a year in only two weeks. Feeling stymied at IBM, Perot left in 1962 to start Electronic Data Systems (EDS).
Best Paid Career = Working for Dad?
Perot tried to sign several corporations to his data processing services, but he was turned down 88 times before getting his first client. His big break came when he got the contract to computerize Medicare records in 1968. When Perot took his company public, shares went from $16 to $160 in a matter of days. General Motors bought EDS in 1984 for $2.4 billion. After Perot criticized the company’s handling of EDS, GM bought him out for $700 million.
These two personal stories highlight a key difference between the US and Europe: Europe’s visionaries were last see in the 1700s; it has been connections ever since. 😉
American dynasties tend to peter out after two or three generations; heirs rarely sustain the original success. George Washington was one of the largest landowners in America (and first president); where are his descendants now?
Perot is trying to start his own dynasty. His son, Ross Jr., is the head of his latest venture, Perot Systems. I am not betting on Perot, or Hilton, being a dominant name in American commerce in 2250 🙂
Could you start a dynasty with your salary? Find out with our salary survey.
Dr. Al Lee