The tale of how the Astor cousins demolished two homes to build the first Waldorf-Astoria hotel was told in the Community Wealth chapter. Three decades earlier, Cornelius Vanderbilt’s favourite grandson and namesake and his wife invited a public outcry when they expanded their Fifth Avenue mansion to cover an entire block. What once were viewed as monuments to a new nation’s wealth became objects of admonishment with the onset of the Progressive Era of the late 1890s.
Of ten Vanderbilt mansions that lined Fifth Avenue, each one had been demolished by 1947. They were not the only ones. One of those to fall was W A Clark’s, whose Gilded Age wealth of unmined copper was reported in The New York Times to have rivalled J D Rockefeller’s Standard Oil. Costing some $10 million (more than a quarter of a billion dollars in today’s money) and thirteen years to build, “Clark’s folly”, as the mansion became known, was sold for $3.5 million within two years of the magnate’s death. It was demolished in 1927.
There is an almost universal assumption, acknowledged in Vance Packard’s book How Rich is Enough, that “the richer you are the more magnificent [is] your place or places of abode.” This was certainly true of the Fifth Avenue mansions built by W. A. Clark, Andrew Carnegie, Clay Frick, JD Rockefeller’s brother William, Charles Schwab, Cornelius Vanderbilt, and Felix Warburg. Of those still standing, each now fulfills a social, as opposed to domestic or commercial, purpose. Notably, the homes of JD Rockefeller, Andrew Mellon, JP Morgan, and Henry Ford are not amongst America’s 100 largest to have been built.
What is often unsaid about the magnificent residences constructed by former and current captains of industry is that their seemingly immense cost to construct commonly accounts for small percentage of their total wealth. For example, Microsoft co-founder Bill Gates’ 66,000 square foot home in Washington State cost less to build than one-tenth of one percent of his current wealth. As much as that is an anomaly, percentagewise, more so is his good friend Warren Buffett’s home in Omaha. Buffett has resided in the same house he purchased for $31,500 in 1958, which he called “Buffett’s Folly.”
In Buffett’s mind, according to biographer Alice Schroeder, the cost of his home was like spending a million dollars after compounding the forgone rate of return on investing the same amount for a dozen years or so. It is not that housing isn’t a good investment. The 2019 Forbes 400 lists some 8.5 percent of billionaires having made their fortunes in real estate. For the majority, whose home doesn’t create income, the National Bureau for Economic Research has found that housing creates more financial distress than anything else. The superrich have an inverse proportion of their wealth in stocks to the average mortgaged household.
When Warren Buffett sold the family beach house that he bought for $150,000 around forty-seven years ago he took a haircut of near to a third of what he first asked. The sale took twenty months and yielded an annually compounded return of around 8.5 percent, before accounting for holding costs. In terms of comparison, $1,000 invested in Buffett’s Berkshire Hathaway in 1975 would have been worth around the same amount of money that he received for his Laguna Beach holiday house.
 Arthur T. Vanderbilt, Fortune’s Children: The Fall of the House of Vanderbilt (New York: Morrow, 2013).
 Bill Dedman, and Paul Clark Newell , Empty Mansions: The Mysterious Life of Huguette Clark and the Spending of a Great American Fortune (New York: Ballantine Books Trade Paperbacks, 2014), xvii, 119.
 “List of Largest Houses in the United States – Wikipedia,” (website), https://en.wikipedia.org/wiki/List_of_largest_houses_in_the_United_States.
 Alice Schroeder, The Snowball: Warren Buffett and the Business of Life (London: Bloomsbury, 2009), 182.
 W. Yakowicz, ‘How America’s Rich Get So Rich’ (Forbes, 2019), < https://www.forbes.com/sites/willyakowicz/2019/10/06/how-americas-rich-get-so-rich/#760c0d9b2f56 >.
 4. E. N. Wolff, ‘Household Wealth Trends in the United States 1962 to 2016: Has Middle Class Wealth Recovered?’, (2017), < doi:10.3386/w24085 >.
 5. J. Rekenthaler, ‘Would You Have Found Berkshire Hathaway in 1975?’ (n.d.), < https://www.morningstar.com/articles/875075/would-you-have-found-berkshire-hathaway-in-1975 >.