(MONEY Magazine) – There are lots of ways to make money in America, always have been. One is to start young, keep your eye on the dollar, and try, try again until you finally come up with something people will pay for.

Twelve is a good age to start out. Take this tale of two kids desperate to be rich. One was 12 when he began selling newspapers on the trains passing through his hometown in Michigan. The other, from Massachusetts, was 12 when he began trying to track down the people listed in newspaper advertisements of dormant bank accounts. He figured he could get 20% commissions if he led folks to their forgotten money. Both of them were too impatient to finish school. They both attracted their first big investors at the age of 21, coming up with ideas to increase the capacity of telecommunications lines--producing faster and cheaper transmissions of words and data.

The young man from Michigan was Thomas Alva Edison. His first important success, in 1874, was the quadruplex telegraph, which doubled the capacity of telegraph lines by transmitting four messages over one wire at the same time. The one from Massachusetts is named Andrew Perlman (pictured on page 168). At age 22, he has just signed a deal for his first $14 million in start-up financing to develop an idea for getting more stuff on international telephone lines. The biggest chunk of that money is coming from a New York City financial firm, Spencer Trask, which is named for its founder, a guy who raised money for Edison's electric lighting experiments in the 1870s.

Like Bill Gates of Microsoft or Andrew Perlman, Edison was more businessman than scientist, a determined guy pushing the envelope in a time of technological revolution and easy money. Edison, the man from Menlo Park, N.J., the godfather of American hustle, had a genius for figuring out what came next, what people needed or were willing to pay for. "Anything that won't sell, I don't want to invent," he said. That pragmatic philosophy resonated across the American century with words I heard this summer from a software designer in Menlo Park, Calif., Kuo-Hsiang Liou: "If they can sell it, I can make it."

Big money. Sudden money. The frantic scramble to discover new technologies--and cash in on them. People were doing it in the last century, and they're doing it again at the end of this one. So the quest of Edison's heirs is not new. What's new is the acceleration of the chase--at warp or warped speed. When Sanjiv Sidhu (pictured at right) brought his software company public last year, 25 of his employees became millionaires. "This is the golden age of capitalism," said Leonard Riggio, the son of a Brooklyn cabdriver, who built Barnes & Noble into a $2.4 billion company. "The wealth is more expansive and deeper than in the past--not four hundred or a thousand rich, but tens of thousands."

As usual, the innovators are young, building on or challenging the work of their elders. And the money is new, going to the sons and daughters of housemaids, cabinetmakers and teachers. "Old money is no longer important," said David H. Komansky, the 58-year-old chairman of brokerage giant Merrill Lynch. "New wealth far outstrips old wealth.... That is what has happened over the last 20 years."

It is an amazing time. To try to understand more of what has happened between the two Menlo Parks, I traveled back and forth, coast to coast this summer, talking to the people who are making it big in America today. Here is some of what I learned:

Economics 101 has become the national text. To update Calvin Coolidge: Business is once again the business of America. Any attempt to understand the news of the day has to begin with the triumph of economics over politics (or capital over labor) in, first, the United States and then in most of the rest of the world. Warren Buffett, Bill Gates and Alan Greenspan have become the philosopher kings of our time. Capitalism is no longer just a spectator sport. Today, more than half of American families have more than $5,000 invested in stocks or mutual funds. "It's a different country," said Franklin Mutual Advisers president Michael Price, 46, one of the superstar money managers celebrated like movie stars or professional athletes these days. "Over the past 20 years, Individual Retirement Accounts, 401(k)s, the growth of the stock market and business journalism educated the American people about money and its uses."

We are financing--and gambling on--the future. Much of our sudden money is based on new definitions of value. Old money was based on finite natural resources--land, minerals and such. Then Texas banks allowed oilmen to borrow against oil still in the ground instead of oil already extracted. Credit moved from things past to things present. Today's investors and venture capitalists are reaching into the future, far beyond their grasp, willing to put up millions on ideas believed to be hatching in the heads of heroic hackers tapping away in Silicon Valley or other computer-friendly venues.

The U.S. imports the world's best and brightest. "Immigration is still the American turbocharger." The quote comes from Komansky of Merrill Lynch, whose office overlooks the Statue of Liberty and Ellis Island. "Look at the names on the Supreme Court. That's the story," he added. Or look at the names of the M.B.A.s hired by Merrill Lynch this year--Cha, Kim, Khan, Sawa, Gupta, Onyemelukwe and Ogbomo among them.

Style is the substance--or the brand. Creating or marketing the shoe of the day or coffee of the hour has made a lot of people rich. Now they want to stay that way for a long time by branding their products or, even better, themselves. There is absolute faith in many arenas that the nature and future of commerce (or consumption) is in designer icons, celebrity above all. Put a name or a swoosh on it. Jordan. Lauren. Trump. Bloomberg. Disney. "I have this seven-foot giant who runs like a deer but has a tiny heart of gold," said Leonard Armato, the 44-year-old agent of basketball player Shaquille O'Neal. Armato hopes to complete the transformation of his client from endorser to icon to brand, maybe even to institution--that is, to immortality modeled on Mickey Mouse.

The freedom to fail is the key to our success. Alexis de Tocqueville, the young Frenchman who would write Democracy in America, was told of casual American bankruptcy laws and wrote this in his first notebook on April 24, 1831: "The greatest blot on the national character was the avidity to get rich...by any means whatever. There are in the United States a great number of business failures, and these do not sufficiently injure those who are responsible."

What shocked de Tocqueville is one of the things that made America rich. "In Silicon Valley, bankruptcy is treated like a dueling scar in a Prussian officers' mess," wrote another European, the British magazine the Economist, a few months ago.

Flexibility makes America great. "Inventing," as it was called in Edison's day, is still a flexible business, learning from its own mistakes. The most creative find something whether they were looking for it or not. "Entrepreneurs are not necessarily geniuses or even particularly innovative," said Judy Estrin, 42, who has co-founded three successful companies with her 47-year-old husband, William Carrico. "What they are is flexible. If the trail changes, we change with it." Which may suggest that Bill Clinton is the right President for the times in Silicon Valley, Hollywood or Wall Street.

Of course, all that glitters now may not be gold but only the glow of a long stretch of sunny days before the darker seasons come, as they always have. Much of the sudden and working wealth of today's markets seems tenuous to an outsider: paper profits unrelated to old-fashioned visible assets. And there are old-fashioned questions too. How long can this last? Is this truly a golden age or just a concentrated transfer of wealth to those who need it least? Other than creating an archipelago of great private wealth, what are the consequences of income differences that look more like canyons than gaps? What is the price of outsourcing instead of manufacturing--or marketing instead of manufacturing? How will democracies react to the jettisoning of the social discipline of government in the cause of record highs?

"There are too many people around here who have never known a downturn," grumbled Michael Bloomberg, a 55-year-old New Yorker who got billionaire-rich in this economic cycle creating the business news and data empire branded with his own name. In Dallas, Raymond Nasher, 76, who made his fortune in the real estate boom that followed World War II, wondered: "Are we going to be able to control this? Or is it going to destroy us?"

Another Dallas mover synthesized those concerns in a single sentence. "Life is out of control because human beings can't change as fast as technology," said Mort Meyerson, 59, who ran Electronic Data Systems jointly with Ross Perot and built it into a $4.4 billion company.

We are breaking away from the known. Both the economy and the technology of the United States does seem to be racing toward a breakthrough, this era's rendezvous with destiny.

But break through what? What I heard and said reminded me of what I heard and read as a kid in the late 1940s about breaking through the sound barrier. I tried to keep up with the arguments about what would happen if a plane flew faster than the speed of sound. Would it be like crashing into an invisible wall? Would the whole world explode? On Oct. 14, 1947, an Air Force pilot named Chuck Yeager did it, went 670 miles per hour in a rocket, a Bell XS-1. The men pushing that envelope did not care about the dangers, real or imagined, of their experiments. They wanted to know. To paraphrase a brand slogan of today, they just did it!

Life went on. It got richer and richer, people lived longer and longer in better health and better houses. Anything seemed possible, including going to the moon. Barnes & Noble's Riggio, 56, whose cabby father was also a professional boxer, told me: "My real capital was not money. It was the positive energy of growing up in the 1950s."

VENTURE CAPITAL SOWS THE SEEDS

I first met Kuo-Hsiang Liou and his wife, Pi-Yao, in 1990. I traveled the country for MONEY magazine that year to write about the American dream. By the time I got home it was obvious our dream had become a world dream. Liou came from Taiwan in 1974 and found a job on the graveyard shift in the computer room of the Crocker Bank in Los Angeles. His wife slept alone with a knife under her pillow because she feared the American violence she had read so much about.

Their lives seemed a good place to start in 1997. Leo, as Liou calls himself, and his wife, who goes by Peggy, are now 42. She had just left her six-figure job in computer systems sales, and was traveling in Europe with their two children, Edward and Christina. Leo suggested we meet at a restaurant in Cupertino called the Mandarin Gourmet. It turned out he owned the place with four partners. Not a bad hobby, and the food was great.

Leo's day job (12 hours a day) is helping to launch a company called Luminate Software. It's a typical Silicon Valley start-up: an idea, four guys with personal computers and some financing. Their money comes from Mayfield Fund, one of the more than 50 venture-capital firms clustered in two-story buildings along Sand Hill Road in Menlo Park--a street of ideas whose time may or may not come. With names like Technology Venture Investors or Institutional Venture Partners, the VCs represent about a third of the nation's venture capital, perhaps $7 billion there for the betting.

And gambling it is--knowledgeable gambling on knowledge. More often than not, the start-ups fail or the original ideas change--as in any technology race. "Remember the pony express," said Meyerson, who is now the chairman of Perot Systems. He reminded me that the storied speed business of yesteryear--carrying mail from St. Joseph, Mo. to Sacramento in 10 days for $5 an ounce--lasted only 18 months. The pony express closed down on Oct. 28, 1861, only four days after telegraph lines were linked from coast to coast. The original investors lost almost half a million dollars.

IMMIGRANTS ADD TO AMERICA'S HUMAN CAPITAL

Perhaps it is more than coincidence that America's high-tech geography lies at the ends of the old pioneer trails to Oregon, Washington, California and Texas. Silicon Valley is the ultimate American place: the last stop for serial pioneers. The pattern of moving on, starting up, failing, starting up again is a miniature version of how the West was won in the 19th century: It was the same people and families, the restless ones, who crossed the Alleghenies, moved on to the Mississippi and Missouri rivers and then pulled up stakes again and set out on the Oregon Trail. Now the trails are 35,000 feet above the earth, and the emigrants are programmers coming from India, Taiwan, Russia and other far points east and west--with jobs and green cards supplied by high-tech firms that lobby Washington lawmakers for higher quotas on immigrants with critical skills.

After closing time at Liou's restaurant, I sat talking into the night with him (he's now an American citizen) and two of his partners, both Silicon Valley techies. One of them, Fanny King, originally from China, said: "There is something wrong with people who attack America." I asked her about discrimination. "Yes, I was discriminated for," she said. "Everybody favored me. They wanted to help me because I was a foreigner and I worked hard."

Talking to successful immigrants about the United States is a patriotic, spiritual experience. A week later in Dallas, at i2 Technologies, I spoke with a transplanted Indian, Sanjiv Sidhu. Sidhu came from Hyderbad to get a master's degree in chemical engineering at Oklahoma State University in 1980 and is now worth more than $400 million. He said this: "I often read criticisms of the United States, and I couldn't understand what they were talking about.... At home, people would say, 'Why live in the United States as a second-class citizen, when at home you can be first class?' Well, I think I'm first class here, if anyone cares. I came here with no relatives and no influence. I know discrimination and racism are human nature, but I've never experienced it here."

Sidhu, who is 40 now, put together i2 Technologies in 1988 in a small apartment with his pregnant wife, on the salary she earned as a technical writer. He calls his business "decision support," creating software to help make repetitive or predictable decisions in supply chains. Like others, what he's really selling is time--the speeding up of production, inventory, sales and delivery anywhere in the world. That's artificial intelligence, quantifying decisions. He offered a "primitive" (his word) example: "There is no reason you or I should have to drive around parking structures looking for an empty space. The ticket machine should 'know' which spaces are empty and guide you to one." As for the impact of such technology, he said: "We change the nature of work--eliminate the drudgery, give workers more time to think."

I was tempted to ask whether he was sure the thinking workers would still be needed to do what he can program. But I decided not to. This is a guy who came to America as a student, started a business from nothing in a small apartment and now employs more than 900 people. "I pay a lot for people who are like me," he said. "Working out problems is my passion. I don't do this for money." You have to watch these guys. Obsession is their charm. They don't care about the consequences of their work except as it opens new doors and reveals new barriers.

FOR SOME, WEALTH IS ACCIDENTAL

There are two kinds of people making big money these days: those who intended to do just that, and those who did not. Jerry Yang, son of a maid in Northern California, said his greatest ambition had been to get a Ph.D. and live on $80,000 a year. Now he's a cyberspace tycoon: co-founder with his Stanford roommate David Filo of $1.6 billion Yahoo!, the wildly popular online guide to the Internet.

"Do it for money?" said Yang. "We would be surfing the Internet for fun. In fact, we were." This is how Yang told the story of Yahoo!'s birth as we walked around the Santa Clara headquarters, which looked like an industrial-strength version of my kids' rooms:

"David and I were just fooling around on the Internet, making our own database of Websites and clicking them onto our page.... We didn't know what our list was worth. We just liked doing it, like watching TV.... Luckily, greedy people were thinking for us. Everyone was using our service because it was free. Our site was collecting eyeballs, and that meant we could charge companies to appear on our pages. We had become a medium that could sell advertising." In January 1997, Yahoo! reported that it had 550 advertisers and posted its first quarterly profit, $91,000. In April, Yahoo! announced that Internet surfers were using Yahoo! to view 1 billion Web pages per month.

Yang never did get his doctorate. But he and Filo each made $132 million on April 11, 1996--the day Yahoo! sold stock in an initial public offering. Click. Click. Yahoo! We're millionaires!

Not that the money has changed them much. Yang, whose corporate title is now "Chief Yahoo," is 28 years old. He came to the United States from Taiwan at the age of nine. The other Chief Yahoo, Filo, is 31 and came to Stanford from Moss Bluff, La. Filo sometimes sleeps on a futon in his cubicle at corporate headquarters. "I don't have a life," he said. "It's pathetic." Added Yang, who does have a new house and a new wife: "I think I'm getting too old for this business."

Beyond clever chatter and moldering pizza boxes on the floor, Yang does realize that he has become part of something big, and he doesn't mean the company. Like the folks at Microsoft and other technology hothouses, he and Filo are changing the world--at least until someone else figures out a way to order all this information. "Our job now is to track changes," he said, as we walked by cluttered cubicles of surfers clicking away and away. "All of the stuff they're seeing is self-publishing, self-distributing--creating a new genre of content.... It's irreversible, and it's incredibly democratizing. The technology is the least of it. It's social change. It has to be open, and it responds to demand. It's always on the edge."

FOR OTHERS, WEALTH IS ALL THERE IS

If Sidhu, Filo and Yang are actually rich by accident, Andrew Perlman, 22, isn't. "I wanted to be a millionaire by my 21st birthday," he said. "I missed, but not by much." With a buddy, Mark Land, 23, Perlman dropped out of Washington University in St. Louis in 1994 and went to Washington, the capital. The two hung around business and government offices, knocking on doors, asking anyone they could find about some kind of new technology they could turn into a business. After the usual run of failures, they put together a device that converts voice calls to a data format, which allows more calls to be transmitted and for far less money. They called themselves Cignal Global Communications.

The two Cignal kids were literally laughed at when they showed up in New York last November at a global networks conference sponsored by the Yankee Group, a research firm. Yankee's research director, Bryan Van Dussen, told this story:

"Here are these 21-year-olds standing there with a bunch of boxes attached to each other. Andrew said, 'I'll prove to you this works.' He led me over to a pay phone, and I called my London office. It was a totally normal call, I couldn't tell any difference. 'That was on a data line,' he said."

Yankee is now a Cignal customer. So are Harvard University and the publishers of Christian Science Monitor. "There may be problems on larger applications," Van Dussen says now. "But if they can get patents, they're going to be the 'Intel' inside somebody's long-distance network."

How did Perlman and Land do it? They themselves hardly know. They have little formal technical education and did the job by reading books, asking questions and by trial and error.

Kenny Troutt had the same goal as Perlman and Land--money. He is 49 now and very rich. He grew up poor, the son of a single mother, in housing projects in Mt. Vernon, Ill. He made it to Southern Illinois University, supporting himself by selling insurance. He began setting up companies the day he graduated in 1970. Over the years he has run a construction firm in Nebraska and an oil and gas outfit in Texas. Profits from those ventures helped him create Excel Communications, now the fifth largest operation in the residential long-distance telephone business.

Troutt found his opportunity in the breakup of AT&T. He became a switchless reseller, which means he purchases blocks of long-distance time (an electronic commodity) on existing transmission lines and resells them at a profit. He had two big ideas that set him apart from hundreds of competitors.

First he noted that business telephone lines were little- used at night and on weekends. Troutt approached companies like WorldCom, AllNet and MCI Business as a customer, not a competitor. He offered to fill their lines with residential calls if he could purchase blocks of night and weekend time at deep discounts. Then he organized a commission-based sales force, modeled on Amway or Avon, to peddle long-distance service to their friends and relatives.

That is as good an example of entrepreneurship as the world will ever see. Troutt started his career with no capital. Everything he did at first was salesmanship, selling his ideas. Now Excel has 4.1 million customers, annual sales of $1.4 billion, and Troutt is worth more than $1 billion.

Troutt is hungry. He has attitude, an inner anger. Like many other entrepreneurs, he sees himself beating the system, not becoming part of it. Riggio is another one, describing himself as "a radical."

Troutt holds rallies of his "independent representatives," the sales force, but the style there is more evangelical than political. He told me his average subscriber spends only about $28 a month on long-distance calls. "We change lives," he said. "Because of the way I grew up, because I was poor, I know what $200 a month can mean to people. It is the difference between a vacation or no vacation, a house instead of an apartment.... I know why lottery is so popular. You buy hope for a dollar.... That's the one thing Wall Street will never understand--the difference $100 or $200 makes in a person's life."

IN THE LAND WHERE BRAND IS KING, STYLE RULES

"What was the most important factor in Yahoo!'s rise?" I asked Jerry Yang.

"The name," he answered quite seriously. "We found a name people would remember, like a brand." Whether or not you could figure out what Yahoo! did, you remember the name.

Brand. In rich America, the word is sounded in hushed reverence from sea to shining sea. "Brand stewardship" and "360[degree] branding" and "brand heroes" are the phrases that Shelly Lazarus, the 50-year-old chairman of Ogilvy & Mather, uses when she pitches the services of her $8.3 billion advertising agency to potential clients around the world.

What does that mean? That in a world where everyone can make the same TV, the same jeans, the same detergent, a brand is what makes you choose one product over another--and stick with it, year in and year out. In Lazarus' words: "Seventy-five percent of the women who use Tide in their washing machines say the reason is that their mothers used it.

"A brand is not about rational reasoning and logic," she said. "A brand is all about emotional connection.... A brand is what is created in the hearts and minds of the consumer."

And one of the ways the smart rich get richer is by making themselves the brand. The greatest walking example (Michael Jordan doesn't walk, he flies) is Donald Trump. To his critics, too numerous to mention, The Donald may be the idiot savant of earned American wealth. At 51, he comes across as ignorant of most subjects, wrong on others. But he knows a couple of things and knows them very well. One of them is the value of becoming a brand name rather than a person.

Trump also loves to drop other names. When I mentioned Shaquille O'Neal, Trump got up and walked over to a table near his desk and picked up a sneaker about the size of a Volkswagen. "Shaq's!" he said. "He gave it to me. He actually wore this one. Look how wide it is!"

Wider even than his eyes. The man has a good time being Trump. "I studied the movie business. It's marketing," he said, sitting on the 26th floor of the Fifth Avenue tower bearing his brand name. It was originally to be called the Tiffany Tower, after the famous jewelry store on the same block. He could use that name but not sell it, so he chose his own. "I made real estate into show business... I wanted to make Trump mean something. Trump stands for quality."

Many have learned this lesson, that in America anyone can make his name stand for something, can sell his style, his taste--himself. Take a look at Anthony Mark Hankins, a 28-year-old fashion designer. Hankins' mass-market line of clothes--$70 for mix-and-match outfits sold everywhere from Nordstrom's to Home Shopping Network--grossed $40 million last year for the company that bears his name. He grew up in Elizabeth, N.J. and is now based in Dallas. But he's really from all-America, he's from television, jumping right out of the set into your life. A big, talented kid with a huge laugh that fills his office and work space.

"I'm designing my own success," he told me as he pranced around his densely packed work space. "I saw everything on TV, and I thought, 'I want to be wealthy.' I thought, 'I'm going to make enough money so my mama doesn't have to work.'"

When I met Hankins, he was about to begin a 20-city national tour to promote his latest line of women's apparel for Sears. He is designing, he said, for his people, not black people but "'entrance people.' People who want to be seen. Fashion is important to minorities, poor people. When you're out, you show what you can get: car and dress. They don't have choices between 401(k) and DKNY...

"My mama would always say, 'I don't have a money tree out back that I can shake.' I'd say, 'Well, I'm going to get you a money tree, so you can shake it all you want.' Amen."

I moved on to Los Angeles, where a 32-year-old man named Shawn MacPherson gave me a quick education on selling and using style. He is the owner of five celebrity hangouts--including Bar Marmont, Swingers and Jones.

"I see the restaurants in my head as three-dimensional artworks," he said. "I'm applying style. I think Marshall McLuhan was right about the medium being the message..."

"You've read McLuhan?"I asked.

"I know it from that Woody Allen movie..."

He saw disappointment or something pass over my face. Then he said: "No one reads, you know. They speak television, and it's just fine!"

TV! TV! TV! Know my name! Sports. Movies. Rap. Style. Brand. Shaquille O'Neal's day job, playing basketball, is worth a reported $10 million a year to the Los Angeles Lakers. But that is not nearly enough for Shaq. He has an agent named Leonard Armato, chairman of Management Plus Enterprises. He is the guy trying to make O'Neal into the larger-than-life Mickey Mouse of the 21st century. The second sentence of his official biography reads: "Armato is best known for his management of Shaquille O'Neal, already a global 'brand' at only 25 years of age."

"We are at the convergence of sports and entertainment," said Armato in his office in Santa Monica. "It's a tremendous economic force.... Compare the National Basketball Association to Disney: We have characters named Michael and Shaq. Arenas are theme parks. A brand is intellectual property that stands for something and lives on in the mind of the consumer."

Don Phillips agrees. He's the president of Morningstar in Chicago, which rates the performance of mutual funds and their managers. "People want superstars," he said. "The baby boomers are bringing the same fanaticism to investing that they brought to the hedonism of the 1960s and 1970s. They are used to tracking personalities, whether it's rock stars, sports stars or fund managers."

Little wonder then that some of the most popular journalism today is a new shorthand: lists and ratings. The top 10...the top 100...the Fortune 500...the Forbes 400...of the year...of the month... of the week...of the day...up to the minute. The two-page Awards and Honors list distributed in Kenny Troutt's Excel Communications' press packet includes such items as 72nd in Inc. magazine's 500 (fastest-growing, privately held companies), seventh in the Dallas Business Journal's Fast Tech 50 and first in CEO Institute's Top 100.

My favorite list, topped last year by James Chu of ViewSonic in Walnut, Calif., is the TransPacific Top 10 Asian-American Entrepreneurs Under 40.

MAKING MONEY STILL BEATS HAVING IT--OR GIVING IT AWAY

There are also several "top" lists for people giving money. Eleven months after the Yahoo! IPO made Yang and Filo suddenly rich, they drove over to Stanford with a $2 million check to endow a chair, the Yahoo! Founders Chair of the Stanford School of Engineering. (Filo also sent $1 million to his undergraduate alma mater, Tulane University.) But most of the young and restless rich are too busy to think about what to do with all their money. The richest of them all, Bill Gates, has put it this way: "Giving away money is almost as hard as earning it in the first place. I'm many years away from wanting to divert a lot of my attention in that direction."

There is a time for reaping and a time for sowing. Raymond Nasher, who made his fortune in an earlier time, thinks the new rich need to think about more than just making lists. He is spending $32 million on a property adjoining the Dallas Museum of Art to display his $50 million collection of modern European and American sculpture. "Accumulating wealth is just a game," he said. "It should be only a small part of one's life."

It is certainly difficult to argue with that. But the truth is that the listmakers are right. Money is the score of the great game called America. In our national pursuit, we redeem ourselves by cheering not the prize but the chase. What Americans really admire is not having money but making money--that's what makes it the true national pastime.

Reporter associate: Joan Caplin