Some of the World’s Richest Dogs

These dogs know how to live the high life. Seriously. They give a whole new meaning to the phrase “being treated like a dog.”

1. Gunther IV, the German Shepherd: This dog actually received his inheritance from his father, Gunther III, a German Shepherd who received an inheritance from Karlotta Liebenstein, a German countess. Gunther IV has bought a Miami villa from Madonna and won a rare white truffle in an auction. Learn more about Gunther IV on a Web site devoted to him and those he hangs out with. He’s worth about $372 million right now, thanks to his growing trust fund.
2. Oprah’s dogs: Oprah Winfrey has several animals, including some dogs. She wants to make sure that her dogs are cared for when she is gone. Her will specifies that that her dogs receive $30 million for their care. (Just a drop in the bucket when you look at the billions Oprah is worth.) True, that money will be split amongst all dogs that she has, but even so, each and every one is probably richer than you are. They’re definitely richer than I am.
3. Trouble Helmsley: New York’s “Queen of Mean”, Leona Helmsley, famously cut her grandchildren out of her will, but left her Maltese terrier $12 million. However, a judge knocked $10 million off that amount, so that brings the amount to $2 million. Additionally, Trouble will be not be so well taken care of after death, as the dog can’t be buried in the Helmsley mausoleum, due to cemetary requirements and state law.
4. Flossie: Drew Barrymore’s yellow Labrador retriever and chow mix, Flossie, has been left a home. Flossie awakened Barrymore and then-boyfriend Tom Green when a fire raged through the home. Barrymore amended her will to leave the home, valued at $3 million, to Flossie in return for this possibly life-saving deed.
5. Tina and Kate: These two collie crosses received $1 million for their care upon the death of their owner Nora Hardwell. In addition to the provision for their care, Tina and Kate also enjoy unlimited use of the lovely home Hardwell occupied near Bath, England, in a town called Peasedown St. John. The home comes with five acres, so these millionaire dogs have plenty of room to run.
6. Jasper and Jason: These dogs live in luxury, since the death of their owner. Jasper is a Labrador and Doberman mix. He was destined for euthanization after being abandoned. However, Diana Myburgh, a brewery heiress, rescued him. Jason is a Whippet. They were both given trust funds of $50,000. As you might imagine, now their funds have more than tripled. It may not be $1 million, but it’s still a hefty fund. Besides, they own a 1,236 acre estate that is worth waaaaaay more than $1 million, and enjoy the finest steaks prepared by a personal chef and ride around in a stretch limo.
7. Tobey Rimes: A reclusive poodle who is worth $92 million. Tobey descends from a poodle who inherited $30 million from his New York owner, Ella Wendel, who died in 1931. Now Tobey is the poster dog for the benefits of trust funds and compounding interest. He makes #3 the list of richest pets ever, behind Gunther IV and a chimp named Kalu.

Some of the World’s Richest Cats

Cats already think that they are royalty. This list of cats rich enough to live like royalty is likely only to increase this feeling of pet entitlement.

1. Tinker: This is the classic rags-to-riches story. Tinker was a stray, regularly visiting Margaret Layne, an old widow. In return for Tinker’s loyalty, he was awarded a fortune. There is a $226,000 trust fund for Tinker, as well as a new home — worth about $800,000. Tinker has been joined by two lovely female cats, Lucky and Stardust. Of course, if Tinker returns to his wandering ways, the will strips him of his money.
2. Beryl Reid’s Cats: Beryl Reid was an actress. She had a lovely $1.8 million cottage. She was also famous for her love of cats. So, when she died, her cats Hamish, Boon, Eileen, Coco and Tuffnel inherited. A friend was commissioned to look after them as they lived in their house.
3. Lola, The Millionaire Cat: This cat isn’t a millionaire — yet. While the other cats on this list inherited their wealth, The Millionaire cat is trying to earn money through blogging.  The Millionaire Cat has a blog that shows videos of this entrepreneur doing every day cat things. The Millionaire Cat is taking donations via PayPal, and hoping for enough money to become a millionaire. It’s an interesting concept, but, unfortunately, this cat hasn’t got a cent yet.
4. Red: A tabby cat who kept bachelor David Harper company. When Harper died, he left is $1.1 million estate to Red. The cat is cared for the United Church of Canada, and will enjoy the benefits of the best food, bedding and medical care for the rest of his life.
5. Blackie: When British recluse Ben Rea died, he left $15 million to various cat charities — and to his cat Blackie. Rea left nothing to his relatives, however. Everything went to Blackie and to help cat charities. We don’t have a picture of Blackie, who seems to be as reclusive as his owner, but here is a picture of a black cat enjoying life.
6. Fluffy: Mary Burton was a church organist in Great Paxton, Cambridgeshire, Enlgand. She left her entire estate to the Wood Green Animal Shelter, provided her cat — a ginger tom — was well cared for. Fluffy, the ginger tom, received $60,000, plus the ability to live in the house and be well cared for. His diet was even specified: steamed cod, lean roast beef, milk, frexh pilchards and vegetables. Fluffy also requires plenty of sun and relaxation. He’s probably not worth quite $1 million, but Fluffy lies better than a lot of humans. This is what Fluffy likely looks like (we couldn’t find a picture) — a regular ginger tom.
7. Brownie and Hellcat: These felines each received $415,000 in the 1960s when their owner, Dr. William Grier, died. Charlie Chan, another cat beneficiary of Grier, received $250,000. The legacies of Brownie and Hellcat live on, even though they are dead; each legacy is now worth $4.1 million. Not bad. I don’t know what Brownie and Hellcat looked like, but the cat pictured here is definitely living the high life.

As impressive as Stewart was, he seems misguided on two points.

First, he gives way too much credit to Cramer. Cramer is a TV personality. Period. Cramer actually used the E word (entertainment) in his defense towards the end of the interview. I have no knowledge of Cramer’s true level of success as a hedge fund manager, but it strikes me as odd that a successful hedge fund manager would become a TV personality. I’m not saying it can’t happen, but if it did happen it only happened once.

Second, CNBC is for entertainment purposes only. I’ve had the opportunity to be a guest on the network on more than one occasion, and when you see the process from the other side of the camera you get a real good feel for the level of detail involved.

In advance of your appearance you get a call from the producer. The producer goes over some basic information and some general questions. This is your opportunity to get the facts straight, and generally the producer appreciates the effort. Unfortunately this information tends to leak out of the bucket by the time the interview actually takes place. This shouldn’t be too big of a surprise; the host is on TV for several hours a day and rolls from one interview to another. The prep time spent with the producer may have been upwards of 30 minutes for a three-minute segment. But the host has nowhere near that amount of time to prepare as the host also has to be on TV most of the day. This is a source of frustration for the guest but is a true disservice to the viewer.

Also understand that conflict makes for great TV. Stewart has been rightly critical of CNBC for fawning over “rock star” CEOs and failing to challenge them. In truth, however, many of these hosts DO try and get into it with their guests, but they don’t do it in an effort to get to the truth. They do it to create conflict because conflict and drama make great TV.

One final point. Everyone in the financial business knows most of these TV personalities have a poor understanding of business and finance. Most professionals that have CNBC on during the day have the sound off.

I’m not saying not to watch CNBC or other financial news channels. In fact, they do a great job disseminating market news (here I mean things like statistical releases, earnings reports etc.). Learn to recognize when the news reporting stops and the analysis/entertainment begins.

The Madoff Ponzi Scheme

By now everyone has heard of Bernie Madoff and his massive financial scam. What usually isn’t explained however is how he was able to keep investors and regulators in the dark over so much money, over such a long period of time.

If you’re looking for a hundred word, concise summary, you’re probably out of luck. The Madoff scheme came about because of a confluence of many factors, some of which are pretty complex. Still, Lew Rockwell does a pretty good job of pulling it all together in his article, Madoff Explained. He cites the following factors (summarized in my words):

• Bernie Madoff was very smart. Especially with money and finance.
• Bernie Madoff does not appear to have a sufficiently developed moral conscience.
• An extended boom period–in turn caused by many other factors, like artificially cheap money from the Fed (more in the next point)–allowed him to pay off earlier investors, with sufficient return, to keep current and future investors “believing.”
• The Federal Reserve, American people, and US executive branch were unwilling to weather even a slight recession, thereby causing the Fed to keep interest rates low, thereby causing many financial bubbles to continue to inflate.

I might also add two other contributing factors:

• The theme of “deregulation,” which was highly prevalent in the 1990s and 2000s, decreased the authority, manpower, and budget of Federal regulators and investigators to uncover this kind of scheme.
• Federal regulators appear to be, on the whole, extremely incompetent. Choosing to work for the government may in fact be a negative selection bias.

But of course, each of the above bullet points could be expanded to a 900-page thesis. So if you’re interested in reading more about the Bernie Madoff scheme, I’d recommending the following Web pages:

• The US Dept. of Justice: United States vs. Bernard L. Madoff: Official Web site on the court case brought by the DOJ Southern District of New York.
• The New York Times: The Talented Mr. Madoff: An in-depth profile with a lot of information on the man himself, and “why” he did what he did.
• The Wall Street Journal: Bernie Madoff News: A portal with all the latest Wall Street Journal content and news on Madoff, his victims, the trial, etc.
• The Wall Street Journal: Madoff’s Victim List: A helpful visual (geographic and tabular) representation of the victims (including the amount by which each victim was swindled).

Definition of a Ponzi Scheme: What Is It, Exactly?

Alright, so we’ve discussed the Bernie Madoff Ponzi scheme, but still haven’t defined precisely what a “Ponzi scheme” is. A lot of people use the phrase Ponzi scheme incorrectly, when referring to MLM organizations, etc. But according to Webster, the term is actually defined as an investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.

But how does this work in practice? Here are some good resources on how Ponzi schemes actually work:

• SEC.gov: Ponzi Schemes: The federal government is probably a good source of information about scams, since they’re often the ones left cleaning up the mess once the scams are uncovered.
• Wikipedia: Ponzi Scheme: I like this page because it has a section on what isn’t considered a Ponzi scheme, including a “bubble,” a “pension fund,” “robbing Peter to pay Paul,” and “Multi-level marketing.”
• TIME Magazine: A Brief History of Ponzi Schemes: The History of Ponzi schemes, from their namesake (Charles Ponzi) to the present day.

The Largest Top Ponzi Schemes: Scams that Echo in History

Ponzi schemes have existed throughout modern history, and we’ll probably never uncover all of them that succeeded. Still, it’s interesting to take a look at the ones that did succeed (and then subsequently collapsed). Business Pundit has a great article on the top Ponzi schemes in history. Here is their top ten:

1. The Namesake: Charles Ponzi
2. Madman Madoff: Bernie Madoff
3. The Retiree Plunderer: Michael Eugene Kelly
4. The Boy Band Bandit: Lou Pearlman
5. The Biblical Bilker: Gerald Payne
6. The Costa Rica Crooks: Enrique, Osvaldo and Freddy Villalobos
7. The Lottery Uprising: The Albanian Government
8. The Scientologist Snake: Reed Slatkin
9. The Haiti Haters: various Haitians?
10. The Fraudulent Feminist: Sarah Howe

Read the entire BusinessPundit article here. HowStuffWorks also has a page on notable Ponzi schemes, though it’s not as in-depth as the BusinessPundit post. Finally, TIME Magazine’s A Brief History of Ponzi Schemes is a nice write-up that features a few more recent scams.

How to Avoid a Ponzi Scheme

Of course, if there’s one thing you should take away from all this, is that it’s probably not a good idea to get involved with, or invest in, a Ponzi scheme. I’d encourage you to remember two investing maxims:

• If it sounds to good to be true, it probably is.
• Be fearful when others are greedy, and greedy when others are fearful. (Warren Buffett)

But if you’d like to educate yourself further, here are the resources I’d recommend:

• LectLaw: How to Avoid Ponzi and Pyramid Schemes
• CBS: Tips to Avoid Ponzi Schemes (video)
• FBI: Common Fraud Schemes

All that reading is enough to make me nervous. I’m glad to be sticking with my portolio of Vanguard ETFs, TIPS, and high-yield savings… I’ll leave the “300% returns” to the suckers!

• Wealthiest Chap: Wikipedia: List of the 100 wealthiest people. You want filthy? Take a look at these guys. The No. 1: Warren Buffet. Net worth: $62 billion. My verdict: Bill Gates, currently at #3 was actually worth over $100 billion for a short while in 1999 before the dot-com bubble burst. Oh well!
• Wealthiest Company: FT Global 500: Wealthiest Companies as of 31 December 2008 [PDF]. Despite plummeting oil prices, five of the top 15 are oil companies. The No. 1: ExxonMobil. Market cap: $406 billion (as of 12/31/2008). My verdict: Texas tea tastes so sweet when you’re the one selling it.
• Wealthiest College: Wikipedia: List of colleges and universities in the United States by endowment. An endowment is a donation to an institution with a stipulation that it be invested for the long-term, instead of spent all at once. The No. 1: Harvard University. Endowment: $36.556 billion (2008). My verdict: Harvard, one of only six colleges that tops the $10 billion, mark crushes everyone else on this list. There’s even been some discussion to use the enormous endowment to get rid of tuition fees.
• Wealthiest Country: CIA World Factbook: Richest Countries by Per Capita GDP. No, the United States is not at the top of the list. The No. 1: Lichtenstein. Per Capita GDP: $117,000 (2007 estimate). My verdict: Good to know that if I started my own country, population me, that my nation would top this list.
• Wealthiest Canine: PetsDo: 10 Richest Pets in the World. Unfortunately, this is not a joke. The No. 1: Gunther IV, dog. Net worth: $372 million. My verdict: This trend of bequeathing an estate to your pet is quite a disturbing trend. Well, what else are the wealthy dead to do with their money now that poverty and hunger are things of the past? Oh, wait a minute.

Well, if one thing’s for certain, reading these lists all day isn’t making you any wealthier. Seriously, have you read that Rule of 72 article yet?

• Forbes.com: The Most Valuable Teams in Sports. Forbes is quick to point out the rise in the value of sports franchises: in 2004, no team was worth $1 billion dollars; in 2008, a whopping 24 teams’ values top that mark. The No. 1: Manchester United, English Premier League. Value: $1.8 billion. My verdict: Does anyone else find it mildly ironic/hilarious that AIG is this team’s title sponsor?
• Forbes.com: Most Valuable College Football Teams. Despite what some college administrators may want the public to think, amateur collegiate athletics–particularly football and basketball–is big business, bringing millions to universities each season. The No. 1: Notre Dame. Value: $101 million. My verdict: Notre Dame’s exclusive television deal with NBC, and the fact that they aren’t tied to a conference, give them a clear advantage. Nevermind that Forbes.com can’t seem to spell the name of their head coach correctly.
• Sports Business Journal: Top 10 Naming Rights Deals (via The Dallas Morning News). We may be in the midst of a global economic recession, but you wouldn’t know it from recent stadium naming rights deals. The largest two deals in history were signed just within the last year. (And by financial service firms no less!) The No. 1: Tie between Barclays Center in Brooklyn, NY (Brooklyn Nets, NBA) and Citi Field in Queens, NY (New York Mets, MLB). Cost: $400 million (20 years). My verdict: After receiving $50 billion from TARP, I suppose a $20 million annual budget for having your name on a baseball stadium seems cheap for Citigroup.
• Wikipedia: List of Major League Baseball teams by payroll. Of the four major American sports leagues (MLB, NBA, NFL, and NHL), only Major League Baseball is without a salary cap. Therefore the teams at the top of this MLB list have the highest payrolls of all American sports teams. No data is available on wealthy non-American sports leagues, such as the English Premier League, as payrolls in these leagues are not publicly disclosed. The No. 1: New York Yankees, MLB. Payroll in 2008: $209 million. My verdict: The Yankees have had the highest payroll in the big leagues since 1995, but haven’t won a World Series since 2000. I guess money can’t always buy you happiness (or even championships).
• SI.com: The 50 Highest-Earning Athletes in the U.S. Some of these top athletes’ earnings eclipse the national GDPs of a handful of small countries. The No. 1: Tiger Woods. Total Earnings: $127.9 million. My verdict: Tiger’s yearly earnings dwarf that of most major American sports teams’ entire payrolls. In one year, he can afford to purchase one of the world’s most expensive homes in cash, completely debt-free!

Okay, so sports isn’t exactly Wall Street in terms of dollar amounts changing hands. But hey, at least we don’t have to bail these guys out!

• HowStuffWorks: Top Ten Most Expensive Houses in the World. Donald Trump’s $125 million home ranks last on this list, so you know there’s some good stuff here. The No. 1: Antilla in Mumbai, India. Price: $1 billion. My verdict: What does one family do with a 27-story mansion stocked with 600 servants?
• Forbes.com: World’s Most Expensive Homes. This list comprises only homes that were on the market and/or properties that sold in 2008, as of Nov. 17. The No. 1: Hillandale in Greenwich, Connecticut. Price: $125 million. My verdict: According to some other sites, this home is currently listed at a mere $95 million, but Forbes still has it at $125 million.
• ABC News: Home Is Where the Money Is. The layout of this list could be easier to navigate, but at 34 homes, it is our biggest list. The No. 1: Villa Leopolda in the French Riviera. Price: $745 million. My verdict: The Russian oligarch who bought this mansion set a world record for purchase price of a home. But hey, Frank Sinatra used to party here.
• Wall Street Journal: World’s Most Expensive Homes, Now at Reduced Prices. A sobering look at how the decline of the housing market has impacted the most expensive homes. The No. 1: Fleur de Lys in Beverly Hills, California. Price: $125 million. My verdict: This 45,000-square-foot mansion, modeled after Louis XIV’s Palace of Versailles (pictured above), is in the same Holmby Hills neighborhood as Hef’s Playboy Mansion. What’s not to like?
• Newsweek: America’s Most Expensive Homes. Although there’s no date given, the intro to this list cites statistics from the first quarter of 2007. The No. 1: The Beverly Hills Compound in Beverly Hills, California. Price: $165 million. My verdict: This house has been home to William Randolph Hearst, served as honeymoon quarters for John and Jacqueline Kennedy, and was featured in the famous horse-head scene of The Godfather. Now, that’s an offer you can’t refuse!

What’s that? You aren’t worth hundreds of millions of dollars? Well, then I suppose this has all been fun and games. Recess is over. Time to get back to class. Remember, when buying a home, you should always buy less home than you think you can afford.

In my boredom-induced search for car pr0n around the Web, I can say that there’s no definitive ‘most expensive car list’. The following however are great lists of super-expensive cars that you can drool over:

• MSNBC/Forbes: The Most Expensive Cars of the Year. This list is of current autos only. The No. 1: Saleen S7. Price: $562,700. My verdict: OK, car enthusiasts, please don’t kill me, but what the $%@& is a Saleen?!
• About: The 10 Most Expensive Cars. I’ll be honest: I like this list because they put all the cars on one page. (Dang you, Forbes, with your CPM-based monetization!) The No. 1: 1961 Ferrari 250 GT SWB California Spyder. Price: $10,976,000. My verdict: Doesn’t everyone have a Ferrari these days?
• TheSuperCars.org: Most Expensive Cars in the World 2008-2009. I already like this site, just because of the domain name. The No. 1: The 1931 Bugatti Royale Kellner Coupe. Price: $8.7 million. My verdict: Looks alright, but it’s no Darrin.
• USNews: The Most Expensive Car Ever Sold Is… Interesting list with a bit of history in it. The No. 1: 1961 Ferrari 250 GT SWB California Spyder. Price: $10,976,000. My verdict: Nice to see some concensus, a second vote for the ‘61 Ferrari.
• Forbes: The Most Expensive Collectible Cars. (I had to include an old school entry or else my dad would be massively disappointed.) The No. 1: 1931 Bugatti Royale Kellner Coupe. Price: $8.7 million. My verdict: There goes the consensus! Looks like the ‘61 Ferrari wins anyway, by a few mil.

Alright, now that I’ve got you all hot and bothered, promise me you’ll read this before driving to your local luxury car dealership: Run Your Car into the Ground (Motley Fool).