When The "Money" Leaves {Part I}

My bride and I vacated Chicago a few weeks ago.  We were tired of being cooped up and all of this was before the February snow and cold.  We took a big shot of courage and hopped on a plane for Florida.  I have to say that Florida was a welcome relief.  We hear stories about Florida being lax in terms of Covid precautions, but at least where we were that was not the norm.  You had to wear masks when going inside places and people were just as careful with disinfecting etc. as you see in our neck of the woods, but the combination of warmth and being outside felt like being released from prison.  You could eat outside and have a cocktail with friends on the beach along with proper social distancing.  I'm not going to tell you where we went but I will say that it was on Florida's West Coast and it wasn't Naples.  What I will also say is that we stayed at a very old resort that attracts affluent people from across the South and then largely it seemed from the Midwest.  There were a lot of people from St. Louis and Cincinnati where we stayed.  There were also many folks from the Chicago area at this place.  Many stay for months at a time.  A month where we stayed can run you north of $20,000.  Florida's west coast beaches are known for miles of white sand and fantastic sunsets.  Here's what dusk looked like each night from our beach:

This picture was shot on my iPhone and it doesn't do justice as to how amazing it actually looks on a clear night.  But this post isn't intended to be a travel guide.  The view is meant to set the table for the rest of the article.  See, sunset brought the resort residents each night to a beach bar on the property where you mingled and watched the colors change across the sky as the sun drifted below the horizon.  Since it takes awhile for this to occur you had a chance to talk to other like minded people.  In a setting like this Midwesterners tend to find each other and I ended up striking up conversations with multiple people from the Chicago area.  What was striking to me was all these people I talked to had already completed or were in the process of becoming former residents of both Illinois and the Chicago area. Later I'll get to what these people told me.  

Now I've written often about the fiscal problems in Illinois, Cook County and the city of Chicago but I don't spend a lot of time discussing the other issues that have engulfed in particular the Chicago region over the years.  I write about investments and many of these problems don't really have a place in columns about money and the markets.  Crime, corruption, poverty and racial tensions existed up by us long before the virus invaded our area.  Besides as I've said more than once there are many other places for people to go if they want a dose of politics.  But Covid has made many of our existing problems much worse if not downright frightening to many depending on where they live.  For the "Money" at least those I met, it seems the virus, the issue of fiscal insolvency and in particular the violence that has come in the last year has been the tipping point for a great reset in the lives of many of these people.

One of the gentlemen who trained me back in the day was somebody I've always referred to as the Consigliere.  Mr. C, as I'll call him here, had 25+ years under his belt when I met him and he was one of the smartest fellows I ever met when it came to understanding individuals and their financial assets.  Mr. C taught me to always pay attention to those he referred to as the "Money" and what they were doing not only with their assets but also what they were doing with their lives.  Now there's no perfect definition of who would be considered the "Money" but they're usually business people, medical professionals, families with intergenerational wealth etc. who on their own have become successful, usually live somewhat modestly and often have quiet influence within their respective communities. For the most part they're the type of people who were originally profiled in books like "The Millionaire Next Door" back in the 90's.  

In general I'd profile these folks in the following manner.  Also please understand there's variations of these people depending where in the country they live, but this will give you some idea of who I'm talking about.  The "Money" may live in a nice home in an affluent suburb or the nice section of town but it's often understated to what they could afford.  The "Money" doesn't necessarily buy a new car every two years.   The "Money" may or may not serve on local charitable boards but they know who to call if they need to talk to somebody in charge of something.  The "Money" can often cut through local red tape to get something done.  You can often find the "Money" at country clubs or other local institutions where they rub elbows with other people like themselves.  Before you decide these people are conservative snobs, understand that their politics cuts across the political arc.  If they have one thing politically in common they are not big fans of debt unless they can see a return on that type of investment.  If there's one area where the "Money" is universally willing to spend its money extravagantly it will be on educating their children.  They will choose where to live based on the reputation of the public schools and if that's not an option, they choose to then live where there's decent private schooling.   They expect their children to go to some form of higher education and for the most part there is an expectation, either explicitly or implicitly stated to their kids that they expect them to make something of their lives.  The most important fact about these type of people is they're quiet.  They don't tend to like to draw attention to themselves.  They prefer to remain hidden in plan sight if possible.  The "Money" is often behind that large anonymous donation at a charity event or that large bequest to some institution when they die.  The "Money" in a local community or neighborhood in a larger city is often the mover and shaker behind that new park or that new local community center.  Their only reward is perhaps their name on the establishment or a name on a plaque somewhere on a wall.

Now with that general definition out of the way,  let's profile the "Money" that I ran into at my little resort.  While I've changed some facts so that the individuals with whom I shared drinks won't be recognizable the basic underlying story is true.  First the people I met weren't inherited wealth.  That kind of Chicago money, if it goes to Florida instead of Arizona, often goes to Naples on the west side, Sarasota or Marco Island.   If it's really old money perhaps it winters or lives full time in Palm Beach.  That money may have roots in these old time Floridian resort communities going back generations.  Think in that regard the Kennedy family and their long time association with Palm Beach.  Rather the people I met for the most part had started up businesses up home and had either now sold them or passed on the running of the company to their kids.  One gentleman was a retired C-suite fellow at a major Chicago corporation.    From what I could tell all of these people had worked to build up a business or a career. 

As I said earlier, all of them were done with Illinois.  We'll talk about the why in our next post.