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.
Having a million dollars isn't what it used to be. In fact, having a million dollars in the bank in today's world only equates to being a "middle-class millionaire." To be truly rich you'll have to clear somewhere around $10 million in the bank, and to be considered "crazy wealthy" those stacks of dough will need to add up to more than $30 million. That is a lot of money.
So what to the rich and the crazy-wealthy of the world do with all that cash? Of course they all have their quirks, but some things are pretty consistent: lavish home improvements (think private massage rooms and relaxing zen gardens), one-of-a-kind jewels and jewelry, obnoxiously fast and expensive vehicles, fashion fashion fashion, lots of traveling to exotic locations, and of course all kinds of conveniences and amenities like concierge services and fine dining.
If you had unlimited funds what would you most look forward to spending it on?
Having or chartering a private jet used to be a big deal, a very special luxury enjoyed by only the elitest of the elite, but private air travel is practically a necessity for even "entry level" wealthy people in today's world. Even with the economy in the condition it's in, those accustomed to traveling privately aren't giving up the luxury in exchange for less expensive commercial flights. And although chartering private jet travel certainly isn't cheap it's not as pricey as it used to be -- as little as $10,000 will get you where you want to go.
If the economy has any kind of negative effect on private air travel experts expect it to be in how much people fly, not in the privacy they expect when they do. Many of those who use private charters and/or own their own jets consider it a necessity in their lives, not a splurge.
Do luxury markets really hold up better than others during an economic crunch? Many experts say no, and it would seem the steady decline in luxury auto sales is backing them up. Estimates say that automobile sales fell in March, which would mark the 5th straight month of decline and could result in the lowest numbers since 2005. Analysts speculate the drop in auto buyers has to do with several factors, including higher-end buyers holding onto their vehicles longer (waiting for the market to improve) and fewer entry-level lux auto owners being able to afford to buy right now due to increasing costs in other areas of their budget.
It's not that millionaires are losing their fortunes, but just that the number of new millionaires being made is fewer than it usually is -- new millionaire households in 2007 grew by only 2.2%, which is the slowest growth in years.
Sure that stinks but hey, it could be worse. They could all be going bankrupt.
Do you have a year end bonus burning a hole on your pocket? Well then you better get to spending it (you know, for your own safety...) and of course there are more than enough people willing to give you ideas and take your money. Want a new car? An exotic vacation? An expensive work of art? Year end bonuses for some (namely bankers and Wall Street execs) this year are calculated to be somewhere in the $49 billion range altogether, so recession or not there's sure to be some serious spending going on.
Unfortunately I'm not part of that $49 billion demographic, but some of these spending ideas sure look awesome, especially the private jet charter. Hmmm, where wouldn't I like to go?
Who would like to get a bag full of money for Christmas? Me! Although I'll be honest and say I'd like it much better if it wasn't just full of $1 bills like this 750 Swag Bag from Money. But it's a good looking all-purpose leather tote bag that would make a great gift for almost anybody. Made of fine Italian leather, it features 18k gold-plated zips from Japan, the cute gorilla logo in an understated outline and, of course, an inner lining made of genuine $1 bills. A true "money bag." Plus you can always grab a dollar if you need a pack of gum or something and don't want to use a card. £799
When you think of the wealthy, what do you think? As open-minded as you may be (and unless you're actually rich yourself) you've most likely got at least some preconceived notions. Whether it's something extreme, like believing all rich people are snots, or something subtle, like simply believing the wealthy have no real problems, chances are living the life of luxury is not exactly what you think it is. According to the Luxury Institute there are at least 10 common misconceptions facing the wealthy -- are you guilty of any (or all?) of them?
There are different breeds of millionaire in the world, and one of the latest to develop is the "Googlaire." It refers to that exclusive group of people (estimated at around a few hundred) that have come into money and new lifestyles as a result of striking gold with Google stock options. And although some are obviously blowing their money frivolously and will soon have dwindled it down, there are many who are finding a nice balance between fun (buying dream homes and dream cars) and responsibility (investing the money for the future and starting businesses).
Good to know the Google founders, with their fleet of over-sized private jets and countless other amenities, aren't the only ones getting rich!
I can't believe I'm about to say this: Oh, those poor rich people.
But it's kinda true, if you're in a generous and sympathetic mood and willing to look at the numbers. The more money you have the more money you need, it's as simple as that. The luxury market and the prices of luxury goods is rising at about 3 times that of the standard market and of standard goods. Part of the reason for this is the fact that although there's more and more money floating around in the world there is still a finite amount of goods to be purchased with that money, and for people with money to spend status symbols become almost exclusively defined by their price: the higher the better.
It's a LOT more complicated than that, but it really can all be summed up in the simple phrase "it's expensive being rich!"
When you are out doing your holiday shopping this fall, don't be surprised to see a few shoppers who have come along way to check off their holiday list. CNN Money reports that due to the weak dollar, shoppers from other countries are coming to the States where their money will go farther. Malls and outlets, which are bracing for a tough season anyway, if the predictions about the economy hold true, are welcoming these shoppers with open arms. Free limo rides with Champagne and discounted hotel stays are just some of the perks that are being offered as incentives for these fat-walleted friends from far away. The Chelsea outlet centers in upstate New York, Minnesota and Seattle have Canadians crossing the border for shopping sprees. In Miami, shoppers are flooding in from Latin and South America. Foreign travel agents are busily arranging shopping trips for Black Friday, the day after Thanksgiving which is traditionally the biggest shopping event of the year.
When I began writing for Luxist back in 2004 one of the first things I did was pick up a copy of the Robb Report, the magazine for the ultra-rich is one of the standard sources for information on the luxury market. Now the magazine has its own stock index, the Claymore /Robb Report Global Luxury Index ROB. CNN Money reports that Claymore Securities launched an exchange-traded fund on Monday based on an index created by CurtCo Robb Media, publisher of the Robb Report.
The financial reasoning behind this is that companies catering to the luxury market may be a safer bet because spending by the rich is less affected by gas prices or mortgage rates, things that may throw off other consumers. And with luxury spending on the rise in countries like Russia, China and India many of these companies are looking at continue growth. The 42-stock portfolio includes many brands you might expect such as Porsche, BMW, and LVMH.
This follows the news that came out last month that Dominion Group had launched the Chic investment fund which cover 61 designer names and 2,300 brands such as Stella McCartney and Ralph Lauren. After all, if you are going to buy the luxury brands, why not also invest in the companies that make them?
