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CNBC WEALTH EDITOR

Palm Beach real estate nears the $200 million mark, wealthy women may be better financial planners than men, and entrepreneurs learn about concentrated wealth the hard way. 

Pity the poor Palm Beachers these days.

With Trump back in the White House, the portion of South Ocean Boulevard near Mar-a-Lago will be closed when the President is in town. The closures have already created massive rush hour traffic jams and bottlenecks around both main bridges.

Even worse are the private jet headaches. With the FAA imposing temporary flight restrictions over Palm Beach due to the President’s presence, taking off or landing your G7 at Palm Beach International (which ranked as the second busiest private-jet airport in the country in 2023) will now be subject to delays and extra security stops, according to Private Jet Card Comparisons.

There is one upside to living in Palm Beach these days: real estate. With Mar-a-Lago once again becoming White House South, Palm Beach has become a hive of activity,  power meetings and mansion demand. The average sale price of a house in Palm Beach is now $16.7 million – and forget about trying to find an ocean view.

This week I take a look at why $200 million is the new $100 million in Palm Beach and why it could soon surpass Manhattan for the national price record.

I also look at Schwab data showing that wealthy women are better financial planners, especially when it comes to multi-generational wealth. And Hayley looks at why entrepreneurs have a hard time cashing in – even when they should.

This week’s newsletter is slightly abbreviated, since we’re working on some exciting Inside Wealth events that we will tell you about soon. Meantime, thanks for reading. Keep sending me your story ideas, comments and suggestions on how we can improve. And a special thank you to all of you who sent me you favorite Groucho Marx quotes last week.

Let’s keep spreading the Inside Wealth!

Best, Robert

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Credit: Thomas Barwick | Digitalvision | Getty Images

Wealthy women hold onto more of their wealth during their lifetime than men, but start planning for the next generation earlier, according to a study.

In a survey of investors worth $1 million or more, 82% of men said they would transfer wealth during their lifetime compared to 75% of women, according to Schwab. Men also plan to transfer a larger amount of their wealth during their lifetime, at 44% compared to 39% for women. So more men pass down wealth, and more of it, while they’re living.

Women, however, plan to pass on a larger share of their wealth after their death, at 65% compared to 60% for men. Men are also more likely to pass on their wealth to their spouse or partner, at 79% of men vs. 59% of women.

Why the difference? Longevity is clearly a factor, since women live longer and therefore needing to preserve more of their wealth during their lifetime. Susan Hirshman, director of wealth management for Schwab Wealth Advisory and Schwab Center for Financial Research, said women also tend to earn less than men and have more responsibilities later in life caring for elderly parents or other family members. So they need more of a safety net.

“Women need to be more focused and purposeful because they don’t have as many opportunities compared to male counterparts,” she said.

When it comes to planning, however, women start earlier. According to the survey, 28% of wealthy women started planning before the age of 35, compared to 18% of men. Women were also more likely to start planning before they reached $1 million in wealth, and they are more likely to have comprehensive estate plans.

At the same time, women are less likely to consider themselves “knowledgeable” about tax planning and tax considerations around wealth transfers. Nearly three quarters of men (73%) say they’re “very knowledgeable” about the income tax compared to about half (57%) of women.

Hirshman said men are often more confident about their financial expertise, even at high wealth levels.

“Women often they know more than they think they know,” she said.

Palm Beach, Florida. Credit: Felixmizioznikov | Istock | Getty Images

Call it the Trump effect, or mass wealth migration or Palm Beach prices getting even Palm Beachier. But two real estate properties on the storied island made headlines over the past week for nearing the $200 million mark.

First came news that William Lauder, the Estee Lauder heir, sold two adjacent parcels of empty land for “close to his original $200 million asking price,” according to the Wall Street Journal.

Lauder bought one of the parcels for $25.4 million in 2020 and paid an undisclosed sum for the other a year later. The combined 2.8 acres has 360 feet of direct ocean frontage (the true measure of status in Palm Beach).

The sale, when closed, will almost surely set a new record for Palm Beach, topping the $170 million sale last year of an oceanfront estate on Palm Beach to a car dealership owner.  

On Monday, news came of another parcel of land, just about 2 acres, with an asking price of $200 million. The plot is just south of Mar-a-Lago and stretches from the intracoastal to the ocean, according to the listing.

If it sells for its asking, Palm Beach would have two sales around $200 million — both of them just dirt (or sand).

Speculation about the buyer has been swirling around the private clubs and charity circuit of Palm Beach. Names like Jeff Bezos, Richard Saghian and even Elon Musk are making the rounds. Hedge fund names were also floated along with tech tycoons.

Given that the buyer of the $170 million estate last year turned out to a relatively unknown name (luxury car dealer Michael Cantanucci) the Lauder buyer may also be an under-the-radar billionaire. 

Whoever bought it will likely spend several years designing the house, getting approval and building it. So it’s unlikely to be someone trying to curry favor with President Donald Trump.

Still, Palm Beach real estate is getting a strong post-election bump. The average sale price for a single-family home in Palm Beach soared to $16.7 million in the fourth quarter — up 53% from a year ago, according to a report from Miller Samuel and Douglas Elliman. The median sales price was up 24%, to $10.9 million.

Credit: Thomas Barwick | Stone | Getty Images

Many entrepreneurs struggle to build a thriving business and a healthy portfolio at the same time, according to a new survey by UBS. The Swiss bank polled 156 entrepreneur clients whose businesses represent $19.1 billion in combined annual revenue with an average of $123 million each.

Fully 42% of respondents said they had not grown their personal wealth outside of their business as much as they could have. The concern was especially acute for American respondents, with 49% saying they could have amassed more wealth. Even a third of retirement-age entrepreneurs (65 and older) reported the same issue.

While part of the problem can be attributed to executives spending most of their time on their businesses, there are often emotional issues at play, according to Josh Pottinger,  senior vice president and wealth advisor at UBS. 

“The business is truly their baby, and they want to hold onto that baby,” Pottinger told CNBC. 

He added some clients have told him that they fear they will jinx themselves by cashing out.

James Jack, who oversees the business owners unit at UBS, said that executives who are used to being in the driver’s seat can be reluctant to invest their earnings outside their business.

“Business owners like control, or at least the perception of having control,” Jack said. “When a business owner has $1 and can invest that into markets or can invest that back into their business, a lot of times they are investing back into their business because they feel that they can control the output of that dollar.”

Part of Pottinger’s job is getting risk-friendly business owners to hedge their bets instead. There are ways to get liquidity without fully exiting the business, he said, such as issuing a cash dividend by borrowing against the business’s assets, selling a minority stake, or even taking a loan against the privately held shares.

The key is to reinvest those proceeds without tying up too much of their money in illiquid assets like private equity or angel investments, which is a common problem, Pottinger said. He generally recommends clients have enough liquid assets to cover two to three years of cash flow needs. 

“We see time and time again,”  he said. “They get so excited, and they’re like making investments in all these little deals, and they wake up three years later and they got 20 different investments in these illiquid deals.”

While many entrepreneurs haven’t planned for their second act as investors, they have an appetite for it. Nearly half of survey respondents reported wanting to invest in a range of asset classes or in other companies.

— Hayley Cuccinello

The Joachim-Ma Stradivarius violin. Credit: Sotheby's. 

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