Super Rich: 'It's Not About Necessity'

Author says the wealthiest Americans live in a different world.


May 16, 2008— -- You probably wouldn't recognize Paul Parmar, but he is one of the fresh new faces of the super rich, and he says he's "not really" affected by the current economic downturn.

Robert Frank, the personal wealth columnist for The Wall Street Journal and the author of "Richistan," said there's a new model for wealth in America.

"Since the 1930s, more than half of America's wealth came from inherited wealth, so we all know about the Rockefellers and the Astors and the DuPonts," he said. "But in the last 10 years, it's all new money."

Parmar, 37, is a prime example of a modern-day multimillionaire, living a life most people could only dream of. Home for Parmar is a 40,000 square foot mansion in Colts Neck, N.J., complete with four swimming pools (one indoor, three outdoor), a tennis court and a two-lane bowling alley.

"They truly live in their own world or their own country that I call Richistan," said Frank. "And even I underestimated the degree to which the wealthy are almost oblivious to the fact that we are in a recession. The super rich are unaffected."

Parmar founded Pegasus Consulting Group in 1995 and, according to his firm's Web site, guided the company's growth to a staff of more than 700. Parmar is also the founder and Chairman of Pegasus Blue Star Fund, and his fortune is spread across a portfolio of investments from finance to aviation to movies, both Bollywood and Hollywood.

Most recently, he produced the movie "Before the Devil Knows You're Dead" starring Philip Seymour Hoffman.

And his new area of investment is health care.

"I say, what segment can I make the most impact in," Parmar said. "And if you look at health care, it's completely broken, it's inefficient. So we see us as someone who can make an impact on that inefficiency."

"Nightline" tagged along with Parmar and his girlfriend, Amanda, on a whirlwind weekend trip -- business mixed with pleasure (including Dom Perignon Champagne on his private jet, which took us to Orlando).

Parmar was picked up by a Rolls Royce and stopped at an exotic car club where you can rent a car so rare, you can't fill it up with regular gasoline.

"I have two aviation companies, so I have easy access to aviation fuel, which works," said Parmar. "You can put jet fuel in these cars and you'll be fine."

Then it was off to Anguilla for a two-hour business meeting before returning to New York.

As many Americans watch personal investments like their homes go belly up, many of the super rich have seen their fortunes grow.

"The median income in America is still around $48,000, and that's been flat for about the last 10 years," said Frank. "Meanwhile, the top 1 percent of Americans control 33 percent of the wealth. That top 1 percent owns $17 trillion in wealth, which for perspective, is greater than the GDPs of Japan, Germany, the U.K. and France combined."

Even the top 1 percent's dogs live well. Parmar's five purebreds are fed chicken and steak.

"I think it comes down to fundamentals of how I invest," Parmar said. "I didn't go rob a bank."

But even Warren Buffett -- the world's richest man whose estimated wealth hovers around $60 billion -- worries about the burgeoning wealth gap.

"My tax rate is courtesy of the U.S. Congress, and the people that pay very high taxes like my cleaning lady, who pays more on her payroll tax than I pay on capital gains," Buffett said. "This has been a prosperity that has been great for the super rich, and it's been bad for the middle class and I think that should be changed."

So Buffett lives modestly in a modest home and has pledged to give most of his fortune to charity. When asked if he has similar plans, Parmar said, "you're talking about Warren Buffet who is at the end of his career -- I have just started."

Parmar said that he gives 2 to 3 percent of his earnings each year to charity.

"Most of the time with me the question begins with someone who feels strongly in the story and makes me believe in it. And if that happens, I'll do a donation.

And Parmar said he is also helping in other ways, by spending more.

"If everyone at my level stops spending … it's going to hurt the economy even worse," he said.

Robert Frank disagrees. He said a problem occurs "when you say your private jet is for the sake of the greater good, when you say, 'Well, I'm buying this to benefit the larger economy' or 'Look at all the jobs I support.' Forget it. You know, trickle down has its limits, and if you're living in a 45,000-square-foot house, you're doing it for yourself, not for the rest of us."

As many of the rest of us struggle with the daily rigors of this economic downturn, Parmar remains a bit, shall we say, disconnected. Take his bills, for example:

"My staff pays them," he said.

And the value of his home?

"I probably think it's gone up in value," he said.

He said that the outcome of the presidential election will "probably not" change his lifestyle.

Frank said that Americans have a love-hate relationship with the rich.

"Americans have always been ambivalent about wealth," he said. "They aspire to be wealthy, but at the same time, they wonder, wait a minute, you know I'm a working schlub, I'm worried about gas prices, and this guy is making more than a billion dollars a year in some cases. They're wondering, wait a minute, how much is too much?"

Standing inside the bowling alley in his home, Parmar said his lifestyle is not a question of what he needs.

"It's not a question about necessity at all," he said. "You know if you ask the people that know me very well, there is probably less than 10,000 square feet of this house that I actually use on a regular basis."

"I think today's wealthy, in 2008, in the middle of recession, should not be parading around their wealth," said Frank. "But frankly, in their world, they don't see anything wrong with it. So, today's wealthy should be concerned about how they're perceived. For themselves, but also, for the preservation of today's wealthy. If you don't want a revolution in America, you should be quiet about your wealth."

Parmar does have some wealth management advice of his own.

When asked what he'd tell somone who said, "I have $50, what should I do with it?" he replied, "You could go skydiving."


"Yes," he said. "It's a good way to spend it."

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