WHAT IT TAKES TO BE RICH IN AMERICA A mere million still goes a long way, but if you want to indulge your every little whim and fancy, aim for at least ten million. Lots of people are getting there.
By Jaclyn Fierman REPORTER ASSOCIATE Christopher Knowlton

(FORTUNE Magazine) – HE LIVES up on the bluff, behind the wrought-iron gate, always on a plane just above eye level. Without fail, his grass is greener. He is the rich man, and he needs no introduction. As F. Scott Fitzgerald wrote of Jay Gatsby, there is ''something in his leisurely movements and the secure position of his feet upon the lawn.'' We all recognize him, yet each of us sees him differently. Ask a dozen Americans to define ''rich'' and expect at least 12 answers, all with the same bottom line: The rich man has what they lack. To a middle manager, rich is the guy in the corner office. To the investment banker, he is the client who got a seven-figure check when his company went public. To Dennis Levine, rich was the person he planned to become by trading on inside information. Almost everyone would agree that the rich can do what they want, when they want. They have, wrote Balzac, the enviable power of ''carrying out thoughts and feelings to the uttermost.'' They are people like Gilbert Kaplan, who sold Institutional Investor magazine to Capital Cities Communications in 1984 for an estimated $70 million. Kaplan hired the American Symphony Orchestra so he could conduct it in a performance of Mahler's Resurrection Symphony. Or Raoul Felder, a New York City divorce lawyer worth $10 million, who buys three copies of hard-cover books. Says he: ''One I keep next to the bathtub, one next to the bed, and one I rip up so I can take a few chapters along to work with me.'' The rich also are free to do absolutely nothing. As the sociologist C. Wright Mills once put it, ''They never have to look at the right-hand column of a menu, they never have to take orders from anybody, they never have to do really disagreeable things except as a self-imposed task.'' Says Barry Waldorf, a senior vice president at U.S. Trust whose clients all have $1 million or more in their trust funds: ''A rich man's independence is limited only by his conscience.'' Some economists and philosophers argue, with merit, that the sum total of a person's possessions is an incomplete measure of wealth. True wealth, they say, also encompasses someone's God-given talents and the breadth of his horizons (see page 28). Rich also is a relative term, not an absolute. The U.S. middle class, for example, lives as well as many of the elite in Central America. But within any society, the rich are always the ones with more of what there is to be had. Exactly how much does it take to be bona fide rich in America today? The short answer: It takes a bundle just to live comfortably; to live splendidly, a bundle of bundles. To get to the bottom of the question, FORTUNE separated the good life into three gradations and calculated price tags for each. They are: affluent, rich, and what some might call truly (or filthy) rich. The first two -- affluent and rich -- carry not one, but two price tags apiece. That's because it takes a minimum income to live an affluent or rich lifestyle, but to be affluent or rich also requires sufficient assets to sustain that lifestyle through minor financial setbacks. Being truly rich, however, is entirely a matter of assets; whatever income these folks earn is purely incidental to how they live. The affluent life -- a comfortable house in a good neighborhood, an aging Volvo wagon in the driveway and a new Olds in the garage, top private colleges if the children can get in, membership in a country club, and occasional vacations abroad -- takes a minimum income of $75,000 in most cities. Granted, that won't cover the more exotic trappings of wealth, and in a place like New York City it won't even pay for the Volvo. But the 3.3 million families who meet the test are doing better than 96% of the populace. And they have reached the point where another $5,000 of income probably won't buy more accouterments of the good life, simply better ones. But to be affluent, and not simply live that way, a family also needs a net worth of at least $250,000. In 1983, the last time the Federal Reserve Board charted the distribution of personal wealth, roughly eight million households qualified, a rather impressive number considering that the median net worth was $32,700. With that cushion under a $75,000 income, a family could keep up its lifestyle even if the boiler broke. Living the rich life, which is something beyond gilt-edged affluence, requires an income of $200,000 or more. That's what it takes nowadays to afford a spacious house or apartment in the best part of town, a nanny, private secondary schools, the choice of a Porsche or Mercedes to drive when you don't feel like being driven, and a piece of original artwork. If you squeak into this category, you're one of 600,000 rare birds. Being rich means you also have at least $1 million in assets to backstop that lofty income. The Federal Reserve estimates that the U.S. now has some 1.3 million millionaires, more than six times as many as 20 years ago. But only 200,000 of them have a rich salary to boot. With a million behind it, a family can continue living the good life even if one breadwinner winds up unemployed or the uninsured yacht goes down. To ascend into the stratosphere of the really rich, where you can quit your job and still live lavishly for your remaining decades, lounge in $800 monogrammed slippers like Raoul Felder's, and rest secure that your grandchildren will never go wanting, you don't need what Texans call a unit -- $50 million -- but you do need at least a fifth of a unit. If you have $10 million or more, you are certifiably elite, but the elite have become a surprisingly populous group. By the Fed's estimate, some 70,000 households meet this measure of the truly rich. That's less than one household in a thousand, but they still add up to an army of Astors. (Mere millionaires now number 15 per 1,000 households.) FORGET ABOUT the old saw that you can't get rich working for someone else. Plenty of people are doing it now. One is Gerard Drummond, 49, president of Nerco Inc., a mining subsidiary of PacifiCorp., a utility in Portland, Oregon. Drummond's income of nearly $400,000 a year puts him solidly among the working rich, and his net worth is fast approaching the $1-million mark. But only a handful of professional managers -- most of them chief executives of the largest corporations -- make enough on the job to accumulate huge wealth. Most of the truly rich either inherited their lucre or made it as entrepreneurs. The price tags for affluent and rich lifestyles are only the broadest of guidelines. The amounts that real people need must be adjusted up or down for a host of variables. Affluence, for example, can be an impossible dream for a remarried executive who scrapes by to support two wives and two sets of children on $100,000 a year. The same income will provide some true indulgence for a pair of DINKs -- Madison Avenue's acronym for couples with dual incomes, no kids. Take Cynthia and Walter Barnes, a young Chicago couple. Each earns around $50,000 at AT&T, he as a designer of microprocessor operating systems, she as a software engineer. They own a three-bedroom home in suburban Naperville and take frequent scuba diving trips to Mexico. ''We're affluent only because both of us work and we don't have kids,'' says Cynthia, 30. Age is another important component of financial well-being. A single, 26- year-old attorney earning $50,000 a year at a top law firm can properly consider himself rich. He makes more than most of his contemporaries, and his income will probably remain near the top of his age group as he matures. For people of similar age and circumstances, geography is the most critical determinant of lifestyle. Granted, nannies get about $250 a week wherever you go. A Mercedes 420SEL will set you back $55,000 in Manhattan or Manhattan, Kansas. Even country clubs cost about the same across the U.S., around $2,000 a year. But enough local differences remain that an ample salary in one city can be paltry in another. A bag of groceries runs 22% more in Philadelphia than in Cleveland. Even if you burn the same number of watts, you will pay more than twice as much for electricity in New York City as you will in San Jose, California. Los Angeles doctors charge 45% more than Memphis M.D.s. HOUSING is the variable that varies most. Coldwell Banker, the nationwide real estate agency, estimates that a 2,000-square-foot, three-bedroom house in an affluent neighborhood of Mobile, Alabama, or Colorado Springs can be had for just $73,000. The same house sells for $114,000 in Wichita, Kansas, $300,000 in Morristown, New Jersey, and $600,000 in Greenwich, Connecticut. Hitting the housing market at the right time also matters mightily. Prices have climbed so fast in New York, for example, that a 45-year-old middle manager who bought 15 years ago probably can afford a better abode than an infant investment banker who earns three times as much. Differences in housing costs can make or break the budgets of the working rich. Homes in Atlanta's exclusive Buckhead area list for as little as % $200,000. In New York, where you will pay $29,000 for a condo parking space, expect to lay out upward of $2 million to park yourself at an elite address. Many cooperative buildings, whose boards have the right to reject buyers, won't let you in unless your net worth is three to six times the price of the apartment. Generalizations about the lifestyles of the rich and anonymous are hazardous in the extreme. But researchers have uncovered a considerable amount about what different income groups buy as a whole. According to FIND/SVP, a New York market research firm, and the Conference Board's Consumer Research Center, families with incomes above $75,000 a year spend two to four times more than the rest of the populace on everyday items such as apparel and transportation. They shell out seven to nine times the national average on VCRs and safe deposit boxes, five times as much on child care, four times more on education, and three times more on musical instruments, life insurance, and books. Jonathan Robbin, founder of Claritas, a market research firm in Alexandria, Virginia, says the affluent and rich also are hearty consumers of scotch and gin, are fond of vacationing in Europe and the Caribbean, and are generous supporters of public television. A third of them own imported cars, compared with only 10% of the population as a whole, and 22% own personal computers, vs. 9% of households overall. While people in the upper brackets splurge on the basics, they are also known to go out of their way for bargains. The best-heeled tend to be sophisticated shoppers as well. Says Judith Price, publisher of Avenue magazine, a glossy lifestyle publication that targets the rich: ''If they're buying a fur coat, they know if it is a female sable or a male sable. They know about the cuts of diamonds. They know about clothes.'' They have to. As wealth has multiplied, so have the prices of the trappings of wealth. Which means that newly minted millionaires cannot afford nearly as many luxuries as the rich took for granted 50 years ago. A Steinway concert grand piano, for instance, cost only $3,000 in the mid-Thirties. Today's price: $41,300. A top-of-the-line Bentley sold for $6,800 50 years ago and sells for $173,200 now. A 48-foot Chris-Craft cabin cruiser cost a sleek $35,000 in 1937. Boating in similar style today would cost $401,000. Location seems to affect the style of life as well as the cost. Chicago, for instance, ''is not a show-and-tell town,'' says socialite Sugar Rautbord, ) 39, an heiress worth between $5 million and $10 million. ''This is a town of morals and values,'' she says. ''People with $100 million don't live very differently from people with $5 million.'' Residents of Portland, Oregon, apparently share that sensibility. Says Gerard Drummond: ''When you meet some of the wealthiest people here for the first time, it looks like they could use hangers for their wardrobe. It's their style and I love them for it.'' So down-home is Drummond, in fact, that he makes his own honey and wine, grows most of his vegetables, and raises the geese he and his wife, Sandra, 42, eat for Christmas dinner. ''I like the idea of being self-sufficient, even if it's not cost efficient,'' he says. A lawyer by training, Drummond spends weekdays nurturing one of the country's largest coal and silver producers. He has pushed Nerco's revenues from $72 million ten years ago to nearly $600 million in 1986. Profits rose more than 40% last year to $57.5 million. Sandra is a vice president of a PacifiCorp travel subsidiary that books flights and hotels for the company's employees. But her income -- less than $50,000 -- has little impact on how the couple lives. ON WEEKENDS the Drummonds head to an 80-acre farm 30 miles outside Portland. When he is not gardening, Gerard is tending his flock of 100 sheep or steering his tractor through rows of filbert trees. ''Being a corporate executive is not terribly hands-on,'' he says. ''I like to get dirty.'' With his three children grown, Drummond could afford a much more lavish life. But apart from the farm, his only indulgences are traveling and hunting pheasant and quail. He and Sandra fly to Europe frequently and vacationed in Hong Kong and Hawaii this winter. ''Some people are flashy about money,'' he says, ''but that doesn't fit my pistol.'' Wealth has never been understated in Newport, Rhode Island, where summer ''cottages'' are among the most opulent dwellings in the world. But the town's old-money residents rarely discuss the subject. ''People who flaunt their money, well, that's completely alien to me,'' says John J. Slocum Jr., 45, a financial planner. Slocum won't even tell how much it costs to join the local beach club: ''I think any member would be reluctant to do that.'' (A mere $1,000 will cover the bill, but don't plan on building sand castles at Bailey's Beach unless you can persuade several members to sponsor you.) Big money probably sings loudest in the Southeast. Consider how June- ! Collier Mason, president of National Industries, an Alabama auto parts company, celebrated her daughter Onda's wedding last year. Mason rented snow- making equipment to transform her Montgomery estate into a winter wonderland. But the weather turned steamy, so Mason used 50,000 feet of white canvas to simulate the effect. The bride wore silk trimmed with ermine, and Jerry Falwell officiated. Cost: $500,000. When the rich aren't spending, they are probably giving their money away. That's hardly surprising; Americans are philanthropic by nature. Almost 90% of households gave to charity in 1984, according to a study commissioned by the Rockefeller Brothers Fund. They contributed $66 billion that year, nearly 3% of household income. About 70% of the money went to religious organizations. But people don't part with big money until they decide they have it to spare, and some of the newly rich feel that they are among those least able to give. ''Entrepreneurs tend to wait until their businesses mature before they start giving philanthropically,'' says Teresa Odendahl, co-author of America's Wealthy and the Future of Foundations. Some people seem to pass through an acquisitive period, getting and spending until a sense of their own mortality impinges and conscience takes over. But others grow generous at a young age. ''You can only wear five suits a week and eat three meals a day,'' says 29- year-old Robert Shapiro, who has made the ranks of the truly rich by investing in New York real estate. GUILT CAN BE a powerful motivator for giving, especially among those who inherited their riches. A prime example is Tracy DuVivier Gary, 36, whose ancestors started what later became GTE. As a child Gary shuttled between homes in Palm Beach, New York's Sutton Place, Minnesota, and Wisconsin, each with a staff of servants. She got most of her upbringing from a black woman named Bessie. ''I was struck one day by how little money Bessie made compared with my father,'' she says. When Gary got the first installment of her trust fund, $2 million at age 21, she resolved to give away half her annual income to women in need. In 1981 Gary helped set up the San Francisco Women's Foundation to fund a shelter for battered women, provide health education for the poor, and finance other feminist causes. Last year the foundation and 27 affiliated organizations around the U.S. raised over $20 million. The San Francisco group also runs seminars that teach heiresses how to cope with guilt, lack of motivation, and other symptoms of affluenza, an ailment she says is rampant among children of the wealthy. ''We talk about our sense of isolation,'' Gary says. Such pangs of conscience are the exception among today's rich because few of them inherited their money. Nor are they particularly bothered by the spectacular inflation in the prices of rich people's playthings. That's because Joe Millionaire of 1987 lives a comparatively humble existence. He is typically a he, one on the far side of middle age, father of three grown children, and still married to his first wife. He earned his money at the laundromat or lumberyard or car dealership he started after graduating from the state university. These millionaires rarely look up from the grindstone. They are men like Jack Cakebread, 57, a Napa Valley vintner and garage operator who is now worth over $10 million. Cakebread drives to work, seven days a week, in a 20-year- old Chevy El Camino pickup. ''Why should I get a new one?'' he asks. ''I've driven this one up here so much it knows its own way.'' Or Robert Henry Watkins, 38, who owns 50% of a Little Rock lumberyard that he built into the largest in Arkansas. Watkins, who is worth $2 million, can't remember the last time he left his mountaintop home to go on vacation, and he reinvests much of his $100,000 salary in the business. His idea of the good life: ''firing up the grill or walking in the woods with my wife and three Dalmatians.'' MOST MILLIONAIRES keep their hands off their money, spending only the income their assets produce and a smidgen of the principal each year. Prototypical rich man in the making: Lebron Morgan, 33, Southern advertising sales manager for Essence magazine. Morgan, who lives in Atlanta, carefully budgets his $80,000 household income so that he will be a millionaire by age 60. ''I always figured if I could get to my money, I'd spend it,'' he says. ''I don't even keep money in a savings account.'' Instead he socks it away in bonds, real estate, stocks, and diamonds. He quit driving Audis -- he used to own three -- and now drives his company's Buick. ''You've got to work for the money, then let the money work for more money, and then let that money buy the Audi,'' he says. That mentality is anathema to most Americans. Signaling one's success with the requisite cars, clothes, houses, and gadgets is such a national obsession that most people live paycheck to paycheck in order to acquire them all. But ^ keeping up with the rich world is no way to get rich. Most of America's millionaires don't even know the Joneses.