President's Message - Making Room for the "New Money"!
November 2003

"In America, we greatly respect those who have raised themselves up by their own bootstraps and who have established their own success. We almost value that more than those who inherited their wealth from their parents."

The more I learn, the more I understand there is so much more I do not know.

Each year Belinda and I take the 10 top Melaleuca Businesses somewhere "exotic" on President' Club. Each President's Club trip has been a totally new experience for us, providing us with new insights into various cultures and a greater understanding of the history of the world. 2003 President's Club did not disappoint us in that regard.

We started learning firsthand about the cultures and attitudes of Austria and Switzerland long before we arrived in those countries. Director of Special Events, Annette Griffin and her staff began organizing our trip several months before Convention and began making arrangements for reservations at elite hotels and blocks of first-class seats (my management team and I always fly coach except on President's Club when we all fly first class).

This year we were going to stay at the Hotel Sacher in Salzburg, Austria and at the Victoria-Jungfrau Grand Hotel in Interlocken, Switzerland. Each of these hotels was listed as the absolute finest hotel available in their prospective countries and each dated back to the mid-1800s.

Over the years it has become a tradition for the men on President's Club to play water basketball wherever we are staying. This rough and tumble sport creates an opportunity for some serious male bonding and a whole lot of fun. We usually send our basketball hoop ahead and usually the hotel, no matter how swank, will cooperate in setting up the hoops for us in preparation for our arrival. But then we had never stayed at the Hotel Sacher or the Victoria-Jungfrau Grand!

As Annette explained our tradition and her request for the hotel to set up our water basketball hoop, the manager at The Hotel Sacher denied her request. The conversation went a little something like this, "We have traditionally only catered to 'old money' and you folks are obviously 'new money' and we are not willing to cater to your wishes. Most of our guests are 'old money' people and would not appreciate watching your rough and tumble sport of water basketball. It would be a distraction." When Annette reported back to me I laughed. The term "old money" and "new money" were new terms to me, but I soon learned the meaning and the significance of these terms.

"Old money" in Europe means those wealthy families who have long had money and who have passed their wealth on from one generation to another-in other words, inherited their wealth. In America the "old money" people would be the Rockefellers, the Kennedys, the Vanderbilts, etc. "New money" people would be Bill Gates, Steve Jobs and those who have created their own wealth rather than inherited it.

In America (I'm not as familiar with Canada), we greatly respect those who have raised themselves up by their own bootstraps and who have established their own success. We almost value that more than those who inherited their wealth from their parents. That is not the case in Europe where today's culture has evolved from the feudal system where serfs and peasants served the land barons and rulers of the kingdom. Europe has a much more established class system than does either the U.S. or Canada. This class system has been designed for centuries to make it very difficult for someone to break through the ceiling of one class and advance in financial status to a higher class. Businesses are passed on to the next generation and very seldom are new entrepreneurs successful. It is almost certain that the children of yesterday's peasants will end up working for and serving the children of yesterday's land barons and ruling class. It has been that way for ages and they intend to keep it that way!

As in most countries and cultures, wealth is the most important factor in establishing class. Should someone dare break out of the established class by accumulating wealth from their own entrepreneurial efforts, the old establishment will still snub their noses and disdainfully call them "new money" people. I found this extremely interesting and rather fun!

The Hotel Sacher in Salzburg, Austria has almost exclusively served "old money" clients because those are usually the only people who can afford to stay there. It was fun to see how they dealt with all these "new money" Americans and Canadians from this Melaleuca company. In truth they treated us really well, but I think they had to swallow pretty hard to do it.

Here's how I read it: In Europe there is "old money," "new money," and "no money," but they are mostly used to it being only "old money" (5%) and "no money" (95%), with "new money" making up probably less than one tenth of one percent. With Melaleuca opening up Europe starting with the United Kingdom this month, there is soon going to be a lot more "new money" people around.

I'm expecting the process to be a great deal of fun! - At least for the "new money" folks!

Sincerely,

Frank