Palm Beach has just 10,200 residents on a land mass that is not quite three times the size of Central Park. It’s so packed with wealth that the joke here is that calling someone a “millionaire” is an insult. Given the density of the superrich, given the roughly 20 percent decline in the value of real estate since the housing bust, and given the concussive impact of Mr. Madoff, Palm Beach might well have this dubious distinction: the net worth of the average resident here has recently plunged, in absolute terms, by more than the average net worth of residents in any other town or city in the country.
By David Segal, April 12, 2009, NYT Sunday Business
Excerpt: “At a men’s store called Crease Liberty, a longtime customer recently told Jennifer Inga, a saleswoman, that he wouldn’t be buying anything for a while, because his net worth had dropped to $12 million from $30 million.“He said, ‘Now is not the time.’ It’s mind-boggling to me,” Ms. Inga said. “How can someone with $12 million feel like they can’t afford a new pair of pants?”
As she was talking, another businessman, Bruce Beal of Boston, came out of a dressing room, barefoot, in a pair of trousers he was trying on. He’d overheard the question and he had a very detailed answer.
He imagined a hypothetical couple, in their 60s, who started last year with $15 million — one-third with Madoff, one-third in the stock market and one-third in bonds. The Madoff millions are gone; the stock market money is down 40 percent. Maybe they’ve got $350,000 a year in income from bonds and dividends.They’ve also got expenses. “Taxes and maintenance on their New York co-op and their Palm Beach house are $150,000 a year. They belong to two country clubs, at $50,000.” Plus taxes, living expenses, medical, cars, charitable commitments. And perhaps they have children and grandchildren who depend on them. It doesn’t take a huge stretch of the imagination to see how these people feel poor,” Mr. Beal says. “One feels poor the day you spend a dollar more than your income”.
Soon after, a man who Ms. Inga, the saleperson, says is a member of the Palm Beach Country Club — where the initiation fee is reportedly $300,000 — entered the store. He looked over the merchandise on sale, then turned to the full-price stuff and asked for a 50 percent discount.“