It is a far cry from the life that Mr. Martin and his family enjoyed until recently at their Adirondacks waterfront camp at Tupper Lake, N.Y. Their garage held three stylish cars, including a yellow Aston Martin; they owned three horses, one that cost $173,000; and Mr. Martin treated his wife, Kate, to a birthday weekend at the Waldorf-Astoria, with dinner at the “21” Club and a $7,000 mink coat.The article goes on to describe various indulgent and wasteful decisions that largely frittered away that inheritance, with an allusion to the housing market as if to suggest that this was simply a case of bad luck. Having poured more than half of the inheritance into building a luxury home, which is nonetheless subject to a seven figure mortgage, a prospective buyer has offered them barely more than they owe. But if they accept the offer and they're lucky they'll end up with six figures in the bank, which puts them in pretty rare company these days.
That luxurious world was fueled by a check Mr. Martin received in 1998 for $14 million, his share of the $600 million sale of Martin Media, an outdoor advertising business begun by his father in California in the 1950s. After taxes, he kept about $10 million.
Did this heir never heard the admonition, "Don't spend the principal"? I know, that oversimplifies economic reality. Sometimes it's necessary and even sensible to spend part of the principal. But not on six figure cars and racehorses, and self-indulgent luxury housing that, even in a good market, could not reasonably be considered as an investment with a sale unlikely to result in massive losses. There is no reason a family of four cannot be set for life based on a $10 million after-tax windfall.
In seeing how people handle (and mishandle) money, I have come to the conclusion that if you redistributed all of the nation's wealth equally among its citizens, you would be back to the same, skewed wealth distribution within two generations, possibly one. Many among the wealthy would object to this "wealth redistribution" not because they reject that probable outcome, but because in their hearts they know that regaining their wealth and privilege would require luck, sacrifice, and possibly even hard work. That is, once wealth again approaches its current distribution, there would be a significant shift in who ended up wealthy and who ended up less privileged.