money

How many millionaires are there in the world today? It depends on what you mean by "millionaire". The Economist reports that there are two different "official" methods for determining who makes the cut. Capegemini, a financial consultancy, defines a millionaire as anyone with investable assets of $1 million or more – meaning that they actually have over a million dollars as that doesn't include the home in which they live, for instance. By this measure there are about 10 million millionaires on the planet, according to Capegemini and Merrill Lynch. Mega bank Credit Suisse uses a different definition, however, denoting anyone whose net assets exceed $1 million a millionaire. In those terms, there are 24.2 million millionaires on the planet – about 0.5% of the world's adult population, or more than the entire population of Australia. 41% of them live in the U.S., 10% in Japan and 3% in China.

Usually Monet's waterlilies paintings are hot sellers but Claude Monet's 1906 painting "Nympheas" failed to sell during an auction of Impressionist and Modern Art at Christie's London on June 23, 2010. Monet's work was estimated at 30 million pounds to 40 million pounds ($44 million to $59 million) but bidding stalled out at 29 million pounds.

The sale brought in 153 million pounds ($227 million). The total set a new London auction record, beating a 147 million pound sale set by Soethby's in February, but fell short of estimates of 164-231 million pounds. The other top lot, a Blue Period portrait by Picasso put up for auction by Andrew Lloyd Webber's charity, sold for 34.8 million pounds. Although the sale wasn't as strong as hoped it still indicates that there is strength in the art market.

Nice makeover, Benjamin. The new $100 bill -- due to be released February 10, 2011 -- is super secure and full of new, hidden features.

"As with previous U.S. currency redesigns, this note incorporates the best technology available to ensure we're staying ahead of counterfeiters," said Secretary of the Treasury Tim Geithner. What's especially nice is that with this new hundred dollar bill, you don't have to be an expert to see if you're being fooled.

For example, see that blue ribbon? That's a "3-D Security Ribbon." The bells and 100s move and change back and forth like those hologram cards from the 80s. There's also a bell in that inkwell you can just barely see; it changes color from copper to green when you tilt the note. The watermark portrait of Benjamin Franklin is also very hard to replicate, so know your Founding Fathers and you should be all set.

This delicate little piggy bank vase is unexpectedly attractive considering it's meant to represent the ushering in of digital currency and the extinction of physical money, paused at the exact moment the hammer hits the piggy. I suspect in this recession some will also be inspired to see it as representative of the need to break into savings to survive. The Killing of a Piggy Bank is the result of a collaboration between Marcel Wanders and Royal Delft for Moooi, and is the latest addition to the Delft Blue Collection of porcelain vases. $1,288

Although we don't like to talk about it, it's hard not to speculate, when purchasing the work of a living artist, if the work will be worth more once the artist shuffles off the mortal coil. Tasmanian millionaire David Walsh takes that speculation to a new level by buying the life of an artist. He has entered a unique arrangement to film an artist's entire life until he dies. The French artist Christian Boltanski will be filmed 24 hours a day in his Paris studio. The Herald Sun reports that the video will be streamed live to Walsh's $70 million Museum of Old and New Art once it opens in 2011. Boltanski will be paid a fee until he dies so the longer he lives, the better a deal it is for him. Boltanski is currently 65. Boltanski has called the deal a game, to win he must stay alive at least eight years. Walsh is essentially gambling that he won't. Filming began yesterday.

Another article goes deeper into the terms of the agreement. Apparently if Boltanski dies within the first two years during the project, Walsh will pay Boltanski's next of kin a discounted price for the footage in installments over eight years. But should Boltanski live beyond the eight years, Walsh will pay full price. Should Boltanski die before the eight years the footage goes to Walsh but if he lives then it belongs to him. Boltankski wants to prove to Walsh, who says he never loses a bet, that no one can beat the odds all the time. In an earlier AFP piece, Boltanski said that Walsh told him he would die before the eight years are up because he never loses and while Boltanski conceded that he doesn't take the best care of himself he still is willing to bet with the man he calls a devil.

Market research firm Synovate surveyed 8,100 people in Brazil, Canada, France, Hong Kong, India, Netherlands, Spain, Taiwan, the United Arab Emirates, Britain and the United States about luxury and what it means. Over a third of the respondents defined it as "everything above what is necessary." That's recession mentality if we've ever heard it.

Being frugal is a virtue to some. Perhaps that's why over half of the 72 percent of Britons (66 percent of women!) who say they treat themselves to luxury report feeling bad about it. "It's a classic case of British guilt. It's seen as much more acceptable to buy something 'needed' for the home than it is to indulge yourself in any way," says Jill Telford, Synovate's CEO for the UK. The survey showed a similar majority in the US.

If you don't feel guilty about luxury purchases, you're thinking more along the lines of the Indians, Dutch and Brazilians, of whom the majority feel just fine with spoiling themselves a bit, thank you very much (or perhaps you're a man; men showed far less guilt than women worldwide).

Check out more of Synovate's luxury research here.

[via Reuters]

In a recent article in the Telegraph rap star 50 Cent spoke out about the recession. To 50 Cent economy apparently means selling his "old diamonds" before buying something new. Not to criticize his strategy, clearly 50 Cent has more money than I do, but it seems that selling off old diamonds to buy new pieces is one of the most financially foolhardy ideas around. Resale on diamonds (large rare high carat stones excepted) is notoriously low. Even if he is essentially trading in his pieces with the same jeweler it is likely a losing game. He may be able to resell some pieces at a decent price because of his name but quickly turning over jewelry and constantly getting new pieces is not a way to accrue wealth.

He went on to say that anyone who didn't lose money in this recession "didn't have enough to start off with." He shrugged off his losses and believes he is still a savvy businessman who could even advise President Obama should he need it. Big words from a man who is still in the process of trying to sell one of the great white elephant pieces of Connecticut real estate, Mike Tyson's former mansion in Farmington, Connecticut. Tyson's mansion has been nothing but a headache for Fiddy. He bought the home for $4.1 million (Tyson's ex originally wanted $25 million) and spent $6 million renovating it. He has been trying to sell the home since 2007 when he wanted $18.5 million for the property and it is now listed at $10.9 million.

Billionaire George Soros has made a big move for climate change. Recently in Copenhagen he announced that he will commit more than $1 billion of his estimated $13 billion fortune to clean energy investments and political efforts which help to benefit the environment. The money could help startups with an eco focus get much needed money to go forward at a time when venture capital is at a major low. Analysts say that Soros will likely focus on "mezzanine" investments helping relatively mature startups with some proven success get to the next level. Soros is a savvy investor and this isn't strictly an altruistic move. He says that he is looking for opportunities that will be both profitable and "make a real contribution to solving the problem of climate change." Soros also pledged $100 million over a 10-year period to the Climate Policy Initiative, a foundation created "to protect the public interest against special interests."

That millionaire next door might not be a millionaire anymore. A recent report from the Boston Consulting Group shows that the number of millionaire households around the world fell from around 11 million in 2007 to 9 million last year, around 18 percent. In North America the number was even higher, a 22 percent drop. Global wealth overall has also declined dramatically.

The world's richest people are responsible for doing a greater share of the resource consuming and economy driving. While many say that the economy is beginning to recover there is the possibility that as 24/7 Wall Street put it, that we are looking at not just a jobless recovery but a "wealthless" one as well. While it can be hard to be sympathetic for the rich who are losing their ability to buy yachts or stay in five-star hotels, those indulgences are major economic drivers. The lack of disposable wealth also ends up affecting not just providers of luxury goods and services but also various philanthropic organizations.

The Wharton School of Finance and Northwestern University are currently collaborating on a paper called "Fatal (Fiscal) Attraction," concerning the spending habits of husband and wives.

According to the authors, Scott Rick, Deborah Small and Eli Finkel, "Surveys of married adults suggest that opposites attract when it comes to emotional reactions toward spending."

Rick also worked on a separate study with Carnegie Mellon's George Loewenstein and Cynthia Cryder about "tightwads" and "spendthrifts" (which I always thought those were synonyms. Oops), and the "pain of paying." The study "found that the extent to which people said they found a pain of paying strongly predicted their savings and credit card debt, but were unrelated to income," reports Kristina Cooke, Reuters.

Whie you might think that there would be less drama if you and your mate had similar spending habits, it turns out that if you dislike spending, you might have sought out someone who likes it, and vice versa.

Basically, next time your husband or wife asks "Why are you spending so much?" in exasperation, you can truthfully answer: "That's why you love me, baby."

[via Reuters]

Coming this summer: more guilty-pleasure TV! Joan Rivers will host TV Land's "How'd You Get So Rich?" There are still millionaires out there, and Rivers hunts them down and "leaves no stone unturned in getting to the story behind the moneybags who walk, or rather drive their Ferraris, among us. In this funny and engaging series, she searches the country to find out how wealthy people got that way and, more importantly, how they spend their money. It's an escapist fantasy and an inspirational tale for these tough times."

TV Land hints that those profiled are more likely to have made their money inventing products than through hedge funds or the market. Premieres August 5 at 10 p.m.

A couple years ago, the world marveled at the rate at which the ranks of millionaires swelled. Now we are watching them shrink. A new survey by Capgemini and Merrill Lynch & Co. shows that the amount of millionaires shrank at the fastest rate on record in 2008. The number of millionaires sank by 15 percent to 8.6 million basically undoing the gains of the last two years. Millionaires saw their assets diminish by 20 percent down to $32.8 trillion.

The survey also shows that we won't have to wait to long to see the financial wealth of Asia-Pacific millionaires eclipse that of North American millionaires. By 2013, as the value of millionaires' assets globally are rising again, China and other nations will be ruling the roost. Currently the U.S. is home to the most millionaires and last year China moved into the fourth slot behind the U.S., Japan and Germany. The U.S. also lost more millionaires last year, the number fell by 19 percent. Dan Sontag, president of Merrill Lynch Global Wealth Management says that 55 millionaires are being created in China every day.

What's particularly interesting is that almost 30 percent of wealthy clients surveyed either took assets out or left their wealth management firms entirely in 2008 and 46 percent report that they confidence in their advisers. These types of numbers seem to indicate that a profound shift in the wealth management business might be required. In a press release Bertrand Lavayssiere, Managing Director Global Financial Services, Capgemini says that the research shows that "while client satisfaction remains a top priority, many wealth management firms and advisors may not fully understand what drives clients to leave or stay." He calls for firms to look at their capabilities to "ensure simplicity and transparency" in their business.

Last week, I sat down with representatives from American Express Publishing and Harrison Group to see a presentation and discuss a question which is on many of our minds: How are the wealthy reacting to the recession?

Well, to start with, more than half (53%) are worried they could run out of money. Dr. Jim Taylor, vice chairman of Harrison Group, and Cara David, senior vice president of corporate marketing and integrated media of American Express Publishing spent approximately an hour display charts that showed the results of countless hours spent crunching the first-quarter responses of 1,300 Americans with discretionary incomes over $100,000 (that means income after tax, mortgage, home maintenance, and child education costs are subtracted).

This year there are 120,000 fewer households that fit in that range.

Of the 1,300 moderately-to-very wealthy Americans surveyed, 70% believe that the recession will last longer than a year, and 35% think this could be a long term depression. 78% report that the crisis has affected their sense of financial security.

So how does the spending look? "Luxury is not dead, there's simply a filter on risk," says Taylor. 77% said they are buying fewer "big ticket items" this year -- so it's a safe bet that they're buying brands they trust. There seems to be a trend among the wealthy of pride in their willingness to not buy things. This goes beyond the usual chatter of talking about great bargains you got; people are actually feeling an increase in their self-esteem related to their ability to take control of their own lives. Believe it or not, spending less is making people happier. People checking the "Very Happy" box went from 58% last year to 66% this year -- women up 10%, men up 4%.

It's been 15 years since Kurt Cobain died and now his widow, Courtney Love, is saying a whole lot of money has gone missing from his estate. Love says that Cobain's estate which was left to her and their daughter, Frances Bean Cobain has been "looted" by some of the people handling her money. Love's team of lawyers says that more than $30 million is missing and as much as $500 million worth of real estate was bought and sold using Cobain's, Love's and their daughter's Social Security numbers. Love's lawyer, Rhonda J. Holmes, of Gordon & Holmes in San Diego, is quoted in Page Six as saying that the case " is going to make Bernard Madoff look warm and fuzzy."

Why did it take Courtney Love so long to realize something was wrong? Her lawyer says that Love's substance abuse issues were a factor and that Love didn't realize that there was a problem until there wasn't any money left. Love's lawyer has promised that any real estate they can uncover and get back will be donated to people who have lost their homes in foreclosures. Love's lawyer also describes her as "pretty frugal."

This isn't the first time Courtney Love has accused people of stealing her money although this may be the grandest example. Last year she took musician Ryan Adams to task on MySpace over money she said he owed her. And check out this article from 2004 when Love said that her daughter's trust fund was basically gone due to estate mismanagement. Whatever is going on with Courtney Love's money certainly has been happening for a while.

My colleague Deidre Woollard just reported that the number of millionaire households in the U.S. has shrunk to its lowest level since 2003. To that we can now add that the number of billionaires in the world has also seen a steep decline.

According to Forbes' newly-released annual list of the world's billionaires, there are now only 793 billionaires around the globe, down from 1,125 a year ago. That means 332 people lost their billionaire status.

This year the exclusive group has an average net worth of $3 billion, down 23% in 12 months, making for a loss of some $1.4 trillion. Americans now account for 44% of the money and 45% of the list's slots, up 7 and 3 percentage points from last year, respectively. Some billionaires have fared better than others, though most have lost masses of money.

Bill Gates lost $18 billion but regained his title as the world's richest man with a $40 billion fortune. Warren Buffett, last year's No. 1, saw his fortune decline $25 billion as shares of Berkshire Hathaway fell nearly 50% in 12 months, and is in the No. 2 slot with $37 billion. Mexican telecom titan Carlos Slim Helú maintains his spot in the top three but lost $25 billion, and is now worth $35 billion.