Dick Fuld was named by Time magazine one of 25 people most responsible for the 2008 financial meltdown. The last chairman of Lehman Brothers, who despite losing as much as $900 million in stock he owned at the time of his company’s bankruptcy, is thought to still have a net worth of at least $500 million.
He’s kept his toe in the waters of finance with his own advisory firm since and various SEC filings show he has been able to gain a few high profile clients, including AT&T. When it came to light a few days ago that he will probably pocket $30 million and possibly $50 million in August auctioning his 71-acre Sun Valley Ranch, it barely made a ripple, outside of reports by The Wall Street Journal, CNBC Wealth Reporter Robert Frank, Fox Business, CNN Money, some local Idaho newspapers and real estate. He wasn’t available for comment, and he has kept away from the media since 2008.
Of course he is not running to be POTUS. Then again, neither was Jeff Green when he made comments during the World Economic Forum that it might make sense that Americans don’t spend more than they earn. Forgetting that he came from a blue collar household, worked his way through college and started his first business by saving instead of partying, he was widely flamed in the media for the lavish estates he owns today and his expensive lifestyle. Yes, he arrived in Davos with wife, children and nannies aboard a private jet. Since then, we haven’t heard much from the billionaire.
Donald J. Trump may yet rue the day he decided to join the Republic primary for President. So far, he has stood his ground, slightly qualifying his comments about illegal immigrants. But first let me give you a disclaimer. In his 2005 book, “Think Like A Billionaire” Trump dedicated a chapter to me and the magazine I co-founded Elite Traveler. I had only met him a couple times and frankly didn’t know I was even going to be included until after the book was published and somebody told me. He kindly described me as somebody in the know about all the best places to go, although he did add that he prefers his own hotels. He also described the magazine as a must-read or something to that effect. It was very nice of him, and indeed it was terrific publicity for which I will always be grateful.
Back to Trump’s current situation. Since his initial announcement, he has lost a number of business relationships. Were their ends mutual decisions? Was it because executives at those companies, who had been profiting from the relationship all along, came to the sudden realization that Trump has strong opinions they disagreed with, not always articulated with feel-good flowery prose? Was it they felt like they were going to lose customers if they didn’t cut ties? It’s impossible to really know. Either way, they’ve cut their losses soundly sleeping with the knowledge previous profits are safely banked.
The relevant part is I am sure that many other Super Rich and Ultra High Net Worth folks are watching Trump’s current plight and taking notes. Clearly, if you want to be in the public profile, you better make sure you are really well coached so you articulate controversial opinions in the most palatable way. Even better, you might want to stay clear of these type of divisive issues. Worst case, the message is that you should support issues covertly. Just donate money to folks who will get out the pitchforks and keep quiet and hide behind the scenes.
Douggollan.com is dedicated to marketing and selling to the Super Rich, so I want to look at it from that perspective. The other day on Bloomberg Television, they dedicated a segment to Trump’s company 401k plan. It is something that you can get details of through public records. But we can be sure, as things move forward, there will be more things that will come to the surface, and they will be reported without context in the race to get headlines.
For luxury sellers, I think the lesson is quite straightforward. As private jets became a lightening rod for critics of the rich during the Great Recession, if you are selling or marketing to UHNWs remember privacy is paramount, not just for today but for 10 years from now. While it is fine if they post pictures of their yacht or earrings on Instagram or Twitter – some do, most don’t – building a successful relationship means honoring that what you and me do and don’t think twice, for the Super Rich is a potential land mine. What do I mean? Did you take a vacation to a luxury Caribbean resort the same year that you had to restructure your team. Did you buy your partner a nice watch three months after you had to close the branch office in Cleveland, forgetting that you offered everyone transfers and actually opened new offices in Buffalo and Cincinnati. Oh, and did you get a new car at the same time people in your company had their wages frozen. Yes, your wages were frozen too and certain workers got raises per contract. But lots didn’t and you got a new BMW!
In a Google search world, it’s relatively easy to dig up stuff on anybody and put it in a bad light. That’s not what happened to Trump. But luxury marketers should make sure they have “best practices” in making sure they don’t provide any fodder when customers get caught in a firestorm. Now critics of this column may get a bit irate, but the worst thing is to “scare” down Super Rich purchasing, particularly when one considers that their lifestyle spending alone creates over 5 million jobs, many that simply are lost when their money stays in the bank.