If it seems like the rich are getting richer, maybe that's just because they're more noticeable. There are more of them. According to the Wealth-X and UBS World Ultra Wealth Report 2014, the population of ultra-high net worth folk (UHNW) just reached an all-time high. Up 6% over 2013, there are now 211,275 people with a minimum of US$30 million in net assets. Combined, their net worth is up $2 trillion over last year to a staggering US$29.7 trillion.
Trillion. $29.7 trillion. To help you wrap your brain around how much cashish this represents, that's almost nine years worth of output for the entire German economy. Over 17 times as much as is invested in S&P 500 index funds.
Suffice it to say, the .03% wield staggering amounts of spending power. So what do they spend their money on? Your average UHNW individual drops about US$1.1 million a year on travel, food and luxury goods & services. And of the annual $234 billion spent by the group as a whole, yachts comprise a whopping 88% share of the luxury market. Yachts?! "Many UHNW individuals lead very public lives," notes the report, "and a very special treat is the privacy of a family holiday on a yacht." (image by Jorge Pinto via source)
Ah, so privacy is what they're after.
Privacy is definitely more fun when practiced in mega-luxury on the high seas, as well as at glitzy ports of call and groovy beach paradises, including Saint Tropez, Hvar, the Maldives, Ibiza, St. Barts and Monaco.
Along with time spent out of the glare, the yacht trend is riding another wave: a desire for memories over things. "Preferences and tastes within the UHNW population differ," continues the report, "but across all clusters, the growth in so-called “experiential” luxury is evident as more and more UHNW are craving intangible and invaluable luxury experiences over and above material luxury goods." (image from Rich Kids of Instagram via source)
In fact, people in most every tax bracket have been moving away from consumption that is spontaneously spendy or conspicuous to calculated. “I really believe that the acquisition of material goods doesn’t bring about happiness," notes one woman who pared her total possessions down to 100, quit her corporate job as a project manager with an investment management firm, moved to Portland, Oregon (of course) and now supports both herself and her husband as a freelance writer and web designer on her salary of around $25,000 per year. "The idea that you need to go bigger to be happy is false,” she continues. "My lifestyle now would not be possible if I still had a huge two-bedroom apartment filled to the gills with stuff, two cars, and 30 grand in debt."
A study published in the International Review of Economics, Does consumption buy happiness?, corroborates the sentiments shared by the downsizer. Of the nine main categories of consumption studied, only one was positively related to happiness: leisure. The more people spent on entertainment, vacations and equipment for activities and sports like fishing and golf, the happier they were. One of the reasons that experiences provide longer-lasting happiness is the memories, even if the trip itself maybe wasn't that great. "That trip to Rome during which you waited in endless lines, broke your camera and argued with your spouse will typically be airbrushed with rosy recollection,” explains Sonja Lyubomirsky, a psychology professor at the University of California, Riverside. “Trips aren’t all perfect, but we remember them as perfect.” (illustration by Steven Broadway via source)
As for what to wear on your next yacht trip, here's a look from the Anthony Vaccarello Spring 2015 runway. He tapped into the freshest way to rock nautical chic: with just enough sleazy-sailor edge to keep things sharp instead of too sweet.
runway photo via Style.com; earrings: Isharya.com; everything else via Net-a-Porter.com
- Lesley Scott