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.

Over the past few years the number of millionaires has been rising but that trend has ended in a big way. A new report "Affluent Market Insights 2009," released by Spectrem Group indicates that the number of millionaire households in the U.S. has shrunk to its lowest level since 2003. In 2008 there were 6.7 million households with a net worth of $1 million or more, not including the primary residence. This number represents a dramatic drop from 9.2 million just a year before.

And it's not just the millionaires. The number of ultra high net worth households, those with a net worth of $5 million or more not including the primary residence, dropped 28 percent to 840,000 in 2008, down from 1.16 million in 2007. Meanwhile the affluent households, defined as having $500,000 or more in net worth not including the primary residence, also declined 28 percent in 2008 to 11.3 million, down from 15.7 million in 2007.

Even as the luxury market started to fall apart in the second half of this year, French luxury brand Hermes remained strong, almost freakishly so. While other luxury groups such as LVMH and PPR began to lag, the share price for Hermes is up 16.7% over the past year. But Forbes predicts that the company's currently level of profitability is not sustainable and that shares will start to fall next year. Most of the stock is held by the controlling family with approximately 30% freely traded. Rumors that Hermes will be sold have also boosted stock prices at various points although denials have always been speedily issued. The stock is still up so this is a good time to collect gains and perhaps move on. In the Forbes article John Guy, an analyst with MF Global picks Burberry as a smart bet for the future.

At least the right Hermes bag is still a good investment...

When it comes to gifts usually it's what's on the inside that counts, but that's not necessarily the case for the gifts Edwina Rogers gives -- she wraps her presents in money. Uncut sheets of real, government-issued, dollar bills.

The wife of Washington lobbyist Ed Rogers gets the money sheets from the United States Bureau of Engraving (you can order them for yourself here) and then slices and dices as you would any wrapping paper to best fit the gift and get the best pattern on the front of the package (in this case it's lining up Washington's face just right). No matter that she regularly cuts several bills in half in the process, to be frugal she sticks to the dollar paper and only uses it to wrap "small" gifts.

A sheet of money paper consisting of 32 $1 bills sells for $55.

Via Trendhunter

It's an old adage that's floated around for years, but now we finally have scientific data to back it up: money really can't buy happiness. A study published in the June 30th issue of the journal Science says that income really doesn't have much impact at all on a person's daily happiness level. The study goes on to say that the more money people have the tenser they tend to be and the less time they spend on simple leisure activities.

So although most people (myself included) tend to think that having just a little more money would go a long ways towards reducing stress levels, it might not be as green as we think on the other side of that fence.

As we've mentioned on this blog many times, the number of ultra wealthy people is growing at an unheard-of rate. Even as we struggle with rising gas and food costs more and more billionaires are being created all the time. In 1985, there were only 13 billionaires in the U.S.; today there are more than 1,000 as well as a whole host of people with hundreds of millions in their coffers. A new CNBC special "Untold Wealth: The Rise of the Super Rich" explores a world where multiple homes, personal staffs, fleets of cars and multi million dollar art collections are the norm. Think of it as the television version of "Richistan."

The one-hour special on CNBC had its premiere on Thursday and will air tonight at 10pm ET as well as several more times in July. At times it's tough to watch the stories of the ultra wealthy but what is really interesting is the segment on "middleclass millionaires" in which Laurel Touby, who sold Media Bistro for 23 million in 2007 says that her remaining $10 million won't even buy her the apartment she wants in New York City. She goes on to discuss her conversations with the "really rich" (over $100 million or more) about shares in private jets and other services far over her price level. For every person you see and think they are rich and have it all, there is probably someone they look at as being rich and think they really have it all.

The importance of family-owned businesses in terms of the economy is pretty amazing. A full 68 percent of businesses are in private hands. Many of those family businesses however, don't have a succession plan in place, even when there are millions of dollars at stake. A new study, "Protecting the Family Fortune" sponsored by U.S. Trust, Bank of America Private Wealth Management finds that the majority of owners of ultra-high-net-worth family businesses haven't fully prepared for the future when it comes to business succession, asset protection and estate planning.

The ultra-high-net-worth businesses surveyed in the report have interests valued at a minimum of $300 million and had already successfully transitioned from the first to at least the second generation. The majority of these family businesses have wealth transfer plans in place and yet most of these plans have lapsed. A majority (89%) of these wealthy business owners were "very" or "extremely concerned" about protecting the family's wealth but nearly three quarters (73%) of them do not have asset protection plans in place.

Most of the business owners are also very worried about personal security, believing that their level of wealth makes them a target. The survey also found that while most had many stresses which affect their personal and professional lives, overall 64% of the affluent family business owners are personally very happy with their lives. The study did find that those who consider themselves "highly centered" are overall in a much better place in life and the report found that one of the best ways to protect the family fortune is actually to manage stress in a positive way.