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COMMODITIZING COLLEGE • WEARABLE TECH: BE WARY MARCH • 2014 EDITION SPECIAL ISSUE RETIRE RICH! PAYPAL’S DAVID MARCUS ÒWE WANT TO REDEFINE MONEYÓ DODGE TAXES TAKE (SMART) RISKS CASH IN ON MUSIC PLUS SECOND-ACT SECRETS FROM SPORTS LEGENDS JACK NICKLAUS, CHRIS EVERT AND MORE THE $15 TRILLION GOLD RUSH PAYPAL WANTS TO CONTROL EVERY TRANSACTION ON THE PLANET SO DO APPLE, GOOGLE, AMAZON (AND CARL ICAHN) contents — MARcH 3, 2014 VoLUMe 193 nUMBeR 60 | the mad dash to mobile money PayPal made its mark as the Web’s wallet Now it must fight off Google and Apple for the cash spent offline 13 | FACt & COMMEnt by steve forbes President Obama: I’m the law BrandVoice by northwestern mutual women need to take an Active Role in Retirement planning 15 lEAdERBOARd 16 | tHE $50 BilliOn gAMES Russia’s oligarchs clean up at Sochi 18 | nEw BilliOnAiRES A startup founder, a Facebook executive and a circus master Plus: Scorecard 20 | FORBES MAkEOvER A new look for Craigslist’s Craig Newmark 22 | Big BuCkS BOllywOOd The top-earning celebs in India’s movie business 24 | wEAtHER wAtCH The world’s frst mechanical meteorology station worn on your wrist 26 | ACtivE COnvERSAtiOn Patent trolls: heroes or villains? tHOugHt lEAdERS 28 | CuRREnt EvEntS by paul johnson In contests of strong, decisive policy, Obama comes up short 30 | CApitAl FlOwS by avik roy Refocus conservatism around economic mobility 32 | innOvAtiOn RulES by rich karlgaard John Chen speaks: saving BlackBerry StRAtEgiES 34 | tHE invEntiOn MACHinE John Nottingham and John Spirk: the most successful inventors you’ve never heard of 68 | classroom capitalist Randy Best’s Academic Partnerships recruits warm bodies for virtual desks cover photograph by eric millette for forbes | FORBES MARCH 3, 2014 by dan alexander 38 | CREAting A BEttER dRug Medidata Solutions believes software can revolutionize the way Big Pharma develops new medicines by matthew herper contents — MARcH 3, 2014 34 | the edisons of the mundane Nottingham Spirk has brought you everything from the Dirt Devil to a better Pepto-Bismol bottle tECHnOlOgy 42 | tHE CASE AgAinSt wEARABlES Smartwatches and bracelets are all the rage among the digital elite, but troubles lie ahead with the mass market by connie guglielmo and parmy olson 47 | MERCEnARy HACkERS’ nExt ACt Endgame wants to rewrite its reputation as a cyberwar arms dealer—without apologies by andy greenberg invESting 50 | lEgg MASOn’S SlOw tuRn Joe Sullivan aims to overhaul Legg Mason from top to bottom Only patient investors need apply by halah touryalai 42 | what’s wrong with wearables Do you really need a smart dog collar? EntREpREnEuRS 54 | king OF tHE CRAFt BREwERS Decades before the boutique beer boom Ken Grossman tasted opportunity Sierra Nevada is now a juggernaut—and he might be worth $800 million by brian solomon 58 | Fix-it RiCHES Break your iPhone? Good news for AJ Forsythe, who is scaling the repairman model by j.j colao tHE nEw REtiREMEnt MAtH 38 | software rx Medidata Solutions has the cure for runaway drug R&D costs 76 | gOOSing tHE gOldEn gOOSE In the new retirement, sprinters fnish last while distance runners prevail And risk is not necessarily a four-letter word by daniel fisher BrandVoice 54 | stout strategy Ken Grossman keeps Sierra Nevada fresh by never running dry of new brews— or new partners by td ameritrade investors look Ahead (And like what they See) 79 82 | ROMnEy iRA SyndROME Challenge: Extract the money from an oversize retirement account without getting destroyed by the new higher tax rates by william baldwin 86 | FREEBASing yOuR EStAtE Time to stop worrying about death taxes and start worrying about the capital gains tax by deborah l jacobs 88 | gEnERAtiOn ROtH Millennials need fexibility and a hedge against higher tax rates by ashlea ebeling | FORBES MARCH 3, 2014 SM INTRODUCING FEDEX ONE RATE Simple, flat rate shipping with the reliability of FedEx Now you can fill a box and ship for a flat rate Find a location at fedex.com/onerate #onerate Terms, conditions and weight limits apply Proper packing required © 2013 FedEx All rights reserved contents — MARcH 3, 2014 SpECiAl gAtEFOld 91 | pOSt-SEASOn How four sporting greats drew on a new playbook to chart their life beyond the feld by steve schaefer 97 | pORtFOliO StRAtEgy by ken fisher Big, fat, gross: my kinda stocks! 98 | FOllOw yOuR BliSS 76 | stop playing it safe The old retirement numbers no longer add up Time to bet bigger Twenty-fve top places to retire—based on your passions by william p barrett 100 | gOldEn OldiES Music copyright: an investment that throws of both cash and good vibrations by zack o’malley greenburg 103 | FixEd-inCOME wAtCH by richard lehmann The 6% solution 104 | invEStOR CHECkup by william baldwin Zen investing FEAtuRES 60 | wAllEt wARS PayPal is in the center of two battles: one for control of every transaction on the planet, the other for control of its own destiny by steven bertoni 68 | nO COllEgE lEFt BEHind The easy money in higher education: digitizing a school’s professional programs Now an entrepreneurial Texan named Randy Best is rapidly commoditizing it by caroline howard liFE 106 | A SplASH in tHE gREnAdinES special gatefold 91 | keep moving your feet Best retirement advice? Never stop playing Just ask Chris Evert 100 | buy a ballad Music to your ears and for your wallet | FORBES MARCH 3, 2014 Irish billionaire Dermot Desmond made Sandy Lane a Caribbean legend Now he’s trying to turn a cursed piece of paradise into something even more luxurious by laurie werner 112 | tHOugHtS On aging 98 | live where you love Find the perfect city for your post-career pursuits + ÷√ + + - THe neW reTIreMenT MaTH alternative investments Golden Oldies If you’re looking for an investment that throws of both cash and good vibrations, take a page from the songbook of ex-Wall Streeter Josh Gruss By Zack O’Malley GreenBurG 100 | FORBES maRch 3, 2014 tra, Aerosmith, Bruno Mars and Katy Perry, as well as six of the Beatles’ early hits An ex-Wall Streeter, he started the company three years ago not only because of his passion for music—he still occasionally plays guitar in a rock band called Rubikon— but also for the profts The music publishing business generates $6 billion in royalty income per year and attracts some savvy investors In 2009 a Dutch pension fund bought the Rodgers & Hammerstein catalog In 2012 Sony/ATV led a consortium that included David Gefen, Blackstone’s GSO Capital Partners and Michael Jackson’s estate in the $2.2 billion purchase of EMI Music Publishing and its 1.3 million songs “Publishing is a great asset,” says billionaire Ron Burkle, a frequent investor in entertainment securities “People obviously went through a moment in time when they thought these assets weren’t going to be worth very much because everybody was going to get it for free.” They were mistaken The Napsters of the world have mostly been shut down or transformed Harsh penalties for illegal downloading have certainly contributed, but the real change comes from services like YouTube and Spotify, which ofer a relatively painless way to listen to free music on demand That’s Royalty king: Josh Gruss controls nearly 8,000 songs, including early Beatles hits a boon to the copyright owners, who have long been more insulated from industry turmoil than record labels have The explanation traces back to the two main fnancial components to any song: the master recording, typically owned by a record label, and the rights to the underlying composition, owned by the composer and usually a music DaviD Yellen For Forbes I n a sunny conference room high above midtown Manhattan Josh Gruss is explaining how to buy a song Seems simple enough—$1.29 for an iTunes download But Gruss is talking about the purchase of a much more complicated item: the copyright for the music itself “Let’s just say you really love the band Tesla,” he begins, looking at the website for Ascap, the performing rights organization, and guiding the cursor to the search bar “And you say to yourself, ‘I want to buy their ’80s ballad, “Love Song.” ’ You’d just simply type in the performer Tesla.” A few clicks later a menu appears, showing that the tune was written by the hair metal group’s front man, Jef Keith, and its guitarist, Frank Hannon There’s other information, too, including contact details for the frm overseeing the song rights For someone interested in buying the group’s publishing catalog, or even a single song, that would be the most direct route “If you went to Tesla and said, ‘I really love your song, I really want to own it,’ and if you wanted to ofer a trophy price,” says Gruss, “they might be willing to that.” He should know Gruss, 39, is the chief of Round Hill Music, which controls nearly 8,000 copyrights, including songs by the Rolling Stones, Frank Sina- publishing company The rights holders split a mechanical royalty of 9.1 cents per track sold on iTunes or CD, and they earn a royalty every time one of their creations is licensed for a television ad or radio commercial Same goes for spins in bars, stadiums and shopping malls and plays on Spotify Licensing fees for flms and TV shows can result in six-fgure payouts Songwriters, unlike recording artists, also get paid for all U.S radio plays “Happy Birthday to You” still generates about $2 million per year in publishing royalties For every dollar a music publisher collects, it typically pays out half to the songwriter and keeps the rest for itself—while maintaining the copyright, collecting passive royalties and seeking out new licensing deals to generate more cash A well-managed song can yield the publisher and writer each a payout of 10% to 15% a year of the song’s current market value—a ratio that has stayed fairly consistent over the past decade Think of it as an income play with the potential for capital gain or loss maRch 3, 2014 FORBES | 101 THe neW reTIreMenT MaTH alternative investments prIce THaT Tune When aRtists make a sonG famous, its composeRs collect ReGulaR Royalties and sometimes sell that income stReam sales pRice is an estimate foR WRiteRs’ full shaRe annual payouts usually equal 10% to 15% of the sales pRice WrITers anita mccloud, edmund clement prOducers edmund clement, Jimmy Jam, terry lewis sales prIce1 $352,000 to $452,000 Frank Sinatra “a nIGHTInGale sanG In Berkeley square” TLC “GIrl Talk” WrITers Earth, Wind & Fire “sHInInG sTar” Aretha Franklin “WHO’s ZOOMIn’ WHO?” WrITers eric maschwitz, manning sherwin lisa lopes, anita mcloud, edmund clement, kandi burruss, tionne Watkins maurice White, larry Dunn, philip bailey aretha Franklin, preston Glass, narada michael Walden n/a edmund clement maurice White narada michael Walden $152,000 to $274,000 $40,000 to $64,000 $575,000 to $675,000 $40,000 to $60,000 WrITers prOducer sales prIce prOducer WrITers prOducer sales prIce sales prIce prOducer sales prIce All prices Are estimAtes bAsed on recent sAles of portions of writers’ royAlties through royAlty exchAnge; the writers And producers listed Above weren’t necessArily the sellers in these trAnsActions 1 Michael Jackson famously bought a catalog housing the Beatles’ biggest hits for $47.5 million in 1985; he later merged it with Sony’s catalog, and his estate’s share of the joint venture is worth about $1 billion today “It’s very stable; it’s also uncorrelated [with equities],” Gruss says of the business, adding that global music publishing revenues dipped less than 4% from 2008–10 “That’s a big, attractive factor for a lot of our investors.” So what’s the catch? The biggest is that opportunities for retail investors, while growing, are still very limited One is Round Hill, which Gruss started after working at Bear Stearns, Warner Music Group and his family’s hedge fund Round Hill has spent about $50 million buying publishing catalogs and last year launched a private-equity-style fund that allows outsiders to invest in its copyrights There’s a minimum investment of $1 million and hefty (albeit standard for private equity) fees of 2% of assets plus 20% of profts FORBES estimates that Round Hill’s annual return is about 15% In that case, investors would get a 10% payout For a similar minimum and fee, investors can buy in through other outfts too, including Kobalt Music Group and Bicycle Music You can also bid on individual 102 | FORBES maRch 3, 2014 royalty rights (often going for $10,000 or less) through the startup Royalty Exchange (You still have to be what the SEC calls an accredited investor—for example, with an investable net worth of $1 million plus.) Most of what’s for sale here, says Royalty Exchange cofounder Wilson Owens, is the writer’s share—producing passive income, with no management or licensing responsibilities Songwriters sometimes sell just part of their royalties; a 25% cut of the writers’ share of the song “U Remind Me,” performed by Usher, recently fetched a cool $113,000 Buying individual songs associated with unknown acts is cheaper and comparable to speculating in penny stocks In the unlikely event such a song gets discovered and licensed in a TV ad, you could make a killing For the catalogs and songs that generate steady royalty income, payouts ofer the added beneft of favorable tax treatment In the U.S the purchase price of a song can be amortized (written down) over a ten-year period, making most of the payout tax free for the frst decade If you sell, however, what you’ve previously amortized is recaptured and taxed at ordinary income rates of up to 39.6%; any gain above recapture is taxed at the lower long-term gain rate that tops out at 20% If you’re not actively managing song copyrights as a business, payouts and gains are also subject to the new 3.8% net investment income tax, says Anthony Nitti, a CPA in Aspen, Colo and a Forbes.com contributor So what about that second big catch? Under U.S law, written works (including songs) copyrighted on Jan 1, 1978 and later revert to the public domain 70 years after the last writer’s death But writers (or their heirs) can reclaim U.S rights they’ve sold to publishers after 35 years This can lead to expensive legal battles, although as a practical matter it’s mostly used by writers to quietly negotiate a better deal with their publishing companies This can reduce both the publisher’s income from a song and the composition’s market value—another reason to invest in a catalog and not a single song Back in his conference room, Gruss continues to explain how an individual investor could buy copyrights directly from a band Still using Tesla as an example, he scrolls down his screen and points to an entity listed as City Kidd Music—the name the members of Tesla picked for their copyrights, which they still owned at that moment Interested? Too late Round Hill has since bought the whole catalog F Jamie mccarthY / GettY imaGes For Gabrielle’s anGel FounDation; cbs via GettY imaGes; christopher polk / GettY imaGes For clear channel; valerY hache / aFp / GettY imaGes; JaG GunDu / GettY imaGes Usher “u reMInd Me” INVESTING RICHARD LEHMANN — fIxED-INCoME wATCH THE 6% SOLUTION Income InvestIng was the Rodney Dangerfeld of the market in 2013 Only gold got less respect My FORBES picks sufered last year, with a 4.7% loss, mostly occurring after Ben Bernanke made his hasty tapering comments last May This year will be better for both gold and bonds, despite the prospect for rising interest rates Don’t worry about a Bernanke taper bluf in 2014 I think we will see fewer headlines under Janet Yellen as Federal Reserve chief Since Bernanke managed to relaunch tapering without the expected volatility, it is unlikely that Yellen will want to change course But then, it’s a critical election year, so if stocks falter Yellen may be pressured into getting back into the QE groove Deleveraging will continue in 2014 as hedge funds and others continue to sell bonds, unraveling their interest rate arbitrage plays Thankfully the strong dollar will continue to attract foreign capital, and the slowing bull market in stocks will mean less capital feeing bonds As for political stubbornness, there appears to be an increased awareness by Congress that “compromise” is not a four-letter word, but “lose” is All this should work to keep bond price volatility to a minimum Believe it or not, it’s still possible to build a reasonably safe income portfolio yielding north of 6% This will provide plenty of protection against a rise in rates Your primary focus should not be on duration, quality, coupon rate or a strategy such as laddering; the key element is diversifcation, not only by market sector but also by security type It’s important to remember that income also comes from dividends, capital gains and cash-fow-dependent distributions, call price I like BARCLAYS (BCSPC, 7.75%), DEUTSCHE BANK (DCE, 7.35%), MERRILL LYNCH (MERPE, 7.12%) and GOLDMAN SACHS (GSPB, 6.2%) • Closed-end funds with a predictable rate of return and the ability to correct for changes in the interest rate outlook These come in a variety of specialties and ofer signifcant yields after their 2013 pummeling Consider NUVEEN LONG/SHORT COMMODITY TOTAL RETURN FUND (CTF) with an 11.2% yield, FLAHERTY & CRUMRINE PREFERRED SECURI- such as those from MLPs and REITs Now, 6% may sound puny in the light of last year’s 30% stock market rise But is it reasonable to expect even half that much from an economy that’s growing at a real return of 2%? In fact, I’m using trailing stop losses on my stock portfolio because I’m worried about a big correction in 2014 There’s always a chance that infation will suddenly reappear, making 6% look totally inadequate My approach is to hedge with a gold bullion ETF such TIES INCOME FUND (FFC) with a 9% yield and Eaton Vance’s TAX-MANAGED GLOBAL DIVERSIFIED EQUITY INCOME FUND (EXG) with a 9.1% yield • Master limited partnerships ofer attractive returns and signifcant opportunity for gains, especially with the pipeline MLPs I buy them via closed-end funds Two favorites are FIDUCIARY/CLAYMORE MLP OPPORTUNITY FUND (FMO), which yields 6.5% and uses 22% leverage Also KAYNE ANDERSON MLP INVESTMENT COMPANY (KYN), yielding 6.1% IT’S a crITIcaL eLecTION year, SO If STOckS faLTer yeLLeN may be preSSUred INTO faLLINg back INTO The Qe grOOve as SPDR GOLD TRUST (GLD) While gold was a big loser in 2013, down some 27%, it is precisely at times like these when it is cheap Its 2013 decline refects a decline in gold as a short-term investable rather than a change in its fundamental value as portfolio insurance I recommend 5% in gold Here are some of the places to lock in that 6% return: • Callable preferreds yielding 6% to 8% are available at or below their with 27% leverage If you don’t like the leverage and want more favorable tax treatment of dividends buy ENTERPRISE PRODUCTS PARTNERS (EPD, 66), ENERGY TRANSFER PARTNERS (ETP, 54), PLAINS ALL AMERICAN PIPELINE (PAA, 53) and KINDER MORGAN ENERGY (KMP, 80) I expect that year-end 2014 will see interest rates close to where they are today That makes investments yielding 6% something you can both live on and sleep with f RiCHARd lEHMAnn iS EditOR OF tHE forbes/lehmann income securities investor And AutHOR OF income investing today (jOHn wilEy & SOnS, 2007) FOR MORE inFORMAtiOn FOllOw HiM At FORBES.COM/lEHMAnn MARCH 3, 2014 FORBES | 103 INVESTINg wIllIam baldwIN — INVESTor chEckup Zen InvestIng Vanguard Group and SCHB, SCHZ and SCHF at Charles Schwab liquidate some of his retirement account Following the advice of an expert, he had maximized his contributions by creating a “defned beneft” plan Now he needed a chunk of capital and couldn’t get at it The dentist had paid a penalty in the form of actuary and legal fees to get the money into the super-duper retirement plan But since he wasn’t yet 591/2, he was going to pay a tax seek Inner peace elImInate some accounts penalty to get the money out He’d have been much better of putting his spare cash in a brokerage account If you’d rather not spend your free time hunched over spreadsheets, take some preventive measures to keep your portfolio simple Put your 401(k) contributions entirely in index funds: half in U.S stocks, a third in bonds and a sixth in foreign stocks If you have access to exchange-traded funds, the tickers for these things are VTI, BND and VXUS at the GO TO FORBES.COm/SITES/BalDwIN fOr MOrE ON TAX-WISE INVESTING STrATEGIES GO TO FORBES.COm/INVESTORCHECkUp fOr MOrE YEAr-END TAX ADVIcE 104 | fOrBES MArch 3, 2014 Don’t rebalance this account Don’t look at the balance more often than once a year Never buy a tax shelter or investment real estate Don’t invest in a hedge fund; you’ll lose sleep wondering if you have the right one Master limited partnerships are not for you If you buy through a fund you lose the tax benefts, and if you buy directly you wind up with K-1 forms and accounting bills For your energy sector exposure just buy a stock like CHEVRON (CVX, 111) Don’t have a nondeductible IRA; the small tax beneft isn’t worth the paperwork Don’t own cash value life insurance Buy cheap term insurance and put the extra cash in a brokerage account Don’t set up a trust If you are worth less than $10 million, don’t have an estate plan beyond a simple will that leaves everything to your spouse and, as contingent heirs, your children (see related story, p 86) What’s the wealth reduction from this kind of simplicity? Just some probate court fees and a state inheritance tax, which is surprisingly low in most of the country Will your children forgive you for not optimizing your estate? Probably Will they forgive you for not having time for their soccer games? F thomas kuhlenbeck for forbes Are your finAnces too complicated? This isn’t just a question about your portfolio It’s about your personality Some people relish opportunities to beat the system They’ll jump on a nifty tax trick or a way to shelter assets on college aid forms Some people not Whatever dollars they might get out of exotic strategies are not worth the mental wear and tear If you are in the latter category, this column is for you It will give you a simple buy-and-hold portfolio for your retirement account It will give you a list of tax complexities to avoid I am as guilty as any fast-talking planner of adding complexity to personal fnance The story on page 82 explains the Roth optimization game Should you play? Maybe; the sums involved are very large But maybe you’d be happier giving this brainteaser a pass It depends on what you want out of life Some years ago I heard a preacher decrying careerism He talked about a man whose success came at the expense of time with family Then came a cancer diagnosis, and the fellow devoted his considerable resources and talents to trying, in vain, to delay the inevitable What is the point of all the striving? the preacher asked Why spend most of your life trading time for money, only to spend the last six months of it in a desperate bid to trade money for time? It is easy to make the mistake of striving too hard with your investment decisions Recently a prosperous dentist asked me about how to Simply open and fund your IRA in minutes with Merrill Edge® You can open a no-minimum-balance Merrill Edge IRA quickly and fund it instantly online from your Bank of America bank account Rolling over a 401(k)? A Merrill Edge specialist can help with the paperwork and contact the plan administrator for you Merrill Edge It’s investing, streamlined merrilledge.com/streamlined Bank with Bank of America Invest with Merrill Edge Certain banking and brokerage accounts may be ineligible for real-time money movement, including but not limited to transfers to/from bank IRAs (CD, Money Market), 529s and Credit Cards and transfers from IRAs, Loans (HELOC, LOC, Mortgage) and accounts held in the military bank Merrill Edge is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation Banking products are provided by Bank of America, N.A and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value © 2013 Bank of America Corporation All rights reserved ARQ853KR/11ES45 FORBES LIFE TRAVEL A Splash in the Grenadines Irish billionaire Dermot Desmond made Sandy Lane a Caribbean legend Now heÕs trying to turn a cursed piece of paradise into something even more luxurious By laurie werner B illionaire Irish fnancier Dermot Desmond, founder and chairman of the Dublin-based private equity frm International Investment & Underwriting, is a busy man, but when it came to selecting salt and pepper grinders for his new Caribbean resort, the Pink Sands Club on the island of Canouan in the Grenadines, he tested 29 versions before greenlighting the (presumably) perfect pair “He is so detail-oriented,” says the resort’s sales and marketing director, Patrice Van Isacker “He wants everything to be perfect.” Thanks to Desmond’s credibility—he also owns the venerable Sandy Lane on Barbados— the ambitious, $120 million Pink Sands is already widely anticipated, though it won’t of106 | FORBES maRch 3, 2014 cially open until the spring The property itself has led several previous lives, but so far perfection has been elusive The original owner, Swiss-Italian banker Antonio Saladino, attempted to capitalize on Canouan’s abundant island charm with previous hotels, all of which failed, a fact that obviously didn’t dissuade Desmond Saladino’s frst attempt in 1999, Carenage Bay Beach & Golf Club, was constructed as a multicolored doppelgänger of the Sardinian resort Porto Cervo and designed by the same architect It was a miss: The hotel was too big—156 rooms in 61 spread-out villas—and clumsily designed The villas were nicknamed “the bunkers.” Add to that the limited fights to Canouan, insufcient to fll 156 rooms, and a marketing strate- Sandy lane sister: Desmond spent an estimated $120 million to build the Pink Sands Club on Canouan island Sand castles: each of the Pink Sands Club’s 26 suites and 20 villas comes with a view of the ocean suites (and only suites), each measuring a minimum of 1,300 square feet, plus 20 sprawling villas, all new or thoroughly redesigned You can get an idea of the resort’s ambitions from its published rates ($2,050 to $5,300 per night for the suites; $10,000 to $22,000 for the villas), which, in high season, are higher than those of Sandy Lane, Necker Island and other chic Caribbean enclaves In addition to the golf course, the spa and four restaurants, what you’ll get for your money are design elements generally seen in the elite hotels of New York and London, not in a small Caribbean hideaway: the highest-quality mahogany furniture, cool, gray Carrara marble and a range of hightech accessories, including a mirror that, with the touch of a button, turns into a TV set and with another touch reveals the living room Every element was sent during every stage to Desmond for his approval “He really only wanted the best,” says Van Isacker, pointing out the Pratesi bed linens, which are priced at nearly $2,000 a set Desmond wanted the rooms to be user-friendly, so he built a model suite in Milan and had focus-group guests stay in it for several months to test the accommodations Still, the place had some bugs to work out Construction problems and complications with new technology that uses iPads to operate everything from the sliding doors to booking spa appointments forced the Pink Sands Club to delay its planned December opening One part of the construction that went smoothly was the extension of the airport runway to accommodate private jets (If traveling commercially, guests fy to Barbados and are transferred by private jet.) The Canouan runway also neighbors an 80-berth marina that will be able to accommodate 100-meter yachts when it is fnished in early 2015 The idea, according to Van Isacker, is that you can fy in on your jet and go directly to your yacht The topto-bottom reimagining of Canouan is undoubtedly an upgrade, but the question remains: Will Desmond’s enhancements entice the Sandy Lane set to this small island when all previous attempts have failed? “It is over-the-top gorgeous, [with] quality that I have not seen in a long time,” says Albert Herrera, senior vice president of Global Product Partnerships of Virtuoso, who believes the resort has the potential to become something like Sardinia’s VIPmagnet, Costa Smeralda “It brings a whole new level of sophistication to the Caribbean.” F TRENDING what the 63 million Forbes.com users are talking about For a deeper dive go to FOrBeS.COM/liFeSTyle PERSON BrunO MarS The Seahawks ran away with Super Bowl XLVIII, but Mars might’ve been the biggest winner The 28-year-old’s dynamic performance will boost his concert sales and likely land him on FORBES’ highest-paid-musicians list for the first time COMPANY CVS It will stop selling tobacco products by Oct 1, costing the company an estimated $2 billion annually To make up for kicking the habit, CVS will ofer a new business: ofering patients smoking-cessation therapy IDEA GEORGE GOJKOVICH / GETTY IMAGES gy aimed at Europe but not the much closer U.S., and the result was low occupancy numbers Then Rosewood Hotels & Resorts came along in 2000 to manage the property and step up marketing efforts to U.S travelers, but that tenure lasted only 15 months, and the resort closed to regroup in 2002 Two years later another major hotel brand, Raffles, came in and changed the look of the resort, bleaching out the Sardinian colors for softer tones while bringing in the Trump Organization to operate a casino and a golf course designed by Jim Fazio Raffles’ best efforts didn’t work out, either When Raffles exited in 2010, Saladino began casting about for a partner Enter Desmond, who bought in on a 50-50 basis and began some three years of construction Desmond was taken with Canouan, a verdant, hilly island with beautiful beaches, a coral-reef-protected turquoise lagoon and very little development “It’s the perfect equilibrium,” says Pink Sands Club General Manager Jeff Morgan, who came over from exclusive Parrot Cay in 2013 “Predevelopment but not a pile of sand There is a village here, so you get a real sense of Caribbean island charm.” The new partnership’s frst move was to tear down most of the previous hotel and build a new one in a different location—Desmond and his partners own 1,200 of the island’s 1,800 acres—directly on pristine Godahl Beach The size was also downscaled dramatically: 26 COlOr PSyCHOlOGy Want to take a company into the black? Pay attention to the ofce hue According to color psychologists at Design Within Science, green sparks creativity, pink is calming, white leads to boredom The best option? Change colors often—but wisely maRch 3, 2014 FORBES | 107 FORBES // MARKETPLACE TECHNOLOGY HEALTH & FITNESS Total Fitness In Only Four Minutes a Day? Preposterous, Right? 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In fact, that image of poverty is false.” —From the FeB 18, 1980 issue oF ForBes OTHer THOUGHTs FrOm THAT IssUe: To keep the heart unwrinkled, to be hopeful, kindly, cheerful, reverent—that is to triumph over old age 100-mILLION-sHAre DAYs “January 1980 has a good chance of going —thomas Bailey aldriCh down in history as the weirdest stock market month ever Gold doubles and the Dow Jones soars The Russians crush Afghanistan, and the new-high list lengthens Iran refuses to release the hostages, and the tape runs 20 minutes late due to upside buying pressure Whoever said that the stock market doesn’t like uncertainty must have been smoking something funny.” ImAGINe—A WAsP mIGHT mAKe IT “George Bush is apparently of the pad Mebbe brains and backbone will overcome the presumed political disadvantage—these days—of WASPness.” 112 | FORBES MARCH 3, 2014 Old age has its pleasures, which, though diferent, are not less than the pleasures of youth —w somerset maugham Old age is the most unexpected of all the things that can happen to a man —leon trotsky Gray hair is God’s grafti —Bill CosBy SOURCES: THE COLUMBIA DICTIONARY OF QUOTATIONS; THE INTERNATIONAL THESAURUS OF QUOTATIONS; THE NEW INTERNATIONAL DICTIONARY OF QUOTATIONS; THE OXFORD DICTIONARY OF HUMOROUS QUOTATIONS; THE 2,548 BEST THINGS ANYBODY EVER SAID Read the story behind our performance 100% of T Rowe Price Retirement Funds beat their 5-year Lipper average as of 12/31/13.* T Rowe Price Retirement Funds are low cost so your investment goes further How smarter research helps us fnd opportunity A few times a year, T Rowe Price media and telecom analysts get together with college students and have pizza Not because our analysts are interested in pizza consumption, but because they’re always on the lookout for new media and technology habits of “early adopters.” Our analysts’ pizza get-togethers help us find insights into technology trends that are ahead of the curve, leading to better investing decisions That dedication to more thoroughly researching investment opportunities is just one reason 100% of our Retirement Funds beat their 5-year Lipper average Past performance cannot guarantee future results Visit our website to learn more about our Retirement Funds and determine whether they are right for your IRA Or call your advisor, 401(k) provider, or a T Rowe Price Specialist troweprice.com/openira | 1.866.575.9648 Request a prospectus or summary prospectus; each includes investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing The principal value of the Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate year an investor plans to retire (assumed to be age 65) and likely stop making new investments in the fund If an investor plans to retire signifcantly earlier or later than age 65, the funds may not be an appropriate investment even if the investor is retiring on or near the target date The funds’ allocations among a broad range of underlying T Rowe Price stock and bond funds will change over time The funds emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus on supporting an income stream over a long-term postretirement withdrawal horizon The funds are not designed for a lump-sum redemption at the target date and not guarantee a particular level of income The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility over shorter time horizons *Based on cumulative total return, 12 of 12, 12 of 12, 12 of 12, of 5, and of (86%) of the Retirement Funds for individual investors outperformed their Lipper average for the 1-, 3-, 5-, and 10-year and since-inception periods ended 12/31/13, respectively The Retirement 2010, 2020, 2030, 2040, and Income Funds began operations on 9/30/02; the 2005, 2015, 2025, and 2035 Funds began operations on 2/29/04; the 2045 Fund began operations on 5/31/05; and the 2050 and 2055 Funds began operations on 12/31/06 (Source for data: Lipper Inc.) T Rowe Price Investment Services, Inc., Distributor RDFT082149 IBM Cloud supports 24 of the top 25 Fortune 500 companies When you’re among the highest-performing businesses in the world, you can’t afford to roll the dice on underperforming alternatives That’s why more and more of the best companies are tapping into 100-plus Software as a Service (SaaS) business solutions in the IBM Cloud Start powering your cloud at ibm.com/getstarted This is Cloud on a Smarter Planet IBM, ibm.com, Let’s Build a Smarter Planet, Smarter Planet and their logos are trademarks of IBM Corp., registered in many jurisdictions worldwide See current list at ibm.com/trademark ©International Business Machines Corp 2013 ... AMERICA’S NEW RAIL BOOM @KOPPANAP1 FORBES, FEBRUARY 10, 2014 5,754 VIEWS ON FORBES. COM NIX THE KNICKS FORBES, FEBRUARY 10, 2014 86,704 VIEWS ON FORBES. 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