LIVING THE RICH LIFESTYLE
BY MELVIN J. HOWARD
Medium-sized mansions, homes between 5,000 and 10,000 square feet, cost their owners about $650,000 per year to maintain, over and above the purchase price. That includes the cost of nannies, housekeepers, a personal assistant, and a household manager. But homes of 10,000 sq. ft. are not large enough. The Ultra-Rich must have 50,000 sq. ft. A mansion that measures over 30,000 square feet will run up annual maintenance bills of at least $3 million. Its upkeep requires 10 butlers, 12 laundresses, 20 security personnel, and 30 housekeepers. It’s taking more and more people to run the lives of high net-worth individuals. This is were we come in the family office catering to the Ultra High Net Worth it takes more than ordering up a limo or arranging flight reservations. It takes a keen sense of responsibility and the utmost confidentiality. I have been around the rich and famous pretty much my adult life it all started when I use to sneak and get on my bike and ride to Beverly Hills and Hollywood. My mother never knew I rode that far I use to go over to the Universal lot and just watch them filming all day. I would see so many stars in restaurants, grocery stores, nightclubs it became to me so natural. Then when I lived overseas stars that would normally travel with big groups would be just by themselves they would even have a drink with me. Just like there are many types of candy bars there many kinds of Ultra Rich ranging from self made wealth, inherited wealth, political wealth, entertainer wealth, sports wealth, intellectual wealth, discovered patented wealth and so forth. Each with different needs wants and tastes.
BY MELVIN J. HOWARD
Medium-sized mansions, homes between 5,000 and 10,000 square feet, cost their owners about $650,000 per year to maintain, over and above the purchase price. That includes the cost of nannies, housekeepers, a personal assistant, and a household manager. But homes of 10,000 sq. ft. are not large enough. The Ultra-Rich must have 50,000 sq. ft. A mansion that measures over 30,000 square feet will run up annual maintenance bills of at least $3 million. Its upkeep requires 10 butlers, 12 laundresses, 20 security personnel, and 30 housekeepers. It’s taking more and more people to run the lives of high net-worth individuals. This is were we come in the family office catering to the Ultra High Net Worth it takes more than ordering up a limo or arranging flight reservations. It takes a keen sense of responsibility and the utmost confidentiality. I have been around the rich and famous pretty much my adult life it all started when I use to sneak and get on my bike and ride to Beverly Hills and Hollywood. My mother never knew I rode that far I use to go over to the Universal lot and just watch them filming all day. I would see so many stars in restaurants, grocery stores, nightclubs it became to me so natural. Then when I lived overseas stars that would normally travel with big groups would be just by themselves they would even have a drink with me. Just like there are many types of candy bars there many kinds of Ultra Rich ranging from self made wealth, inherited wealth, political wealth, entertainer wealth, sports wealth, intellectual wealth, discovered patented wealth and so forth. Each with different needs wants and tastes.
Living Rich Lifestyle
The Ultra-Rich want unique cars that they don’t see on every street. Mercedes offers the Maybach; 20 feet long and $358,000, it can reach top speed of 155 mph. The Bentley Continental at $150,000 is also popular with the New Rich. There are the second tier luxury cars, BMW and Jaguar, for people who don’t want to look conspicuous. Why let the chauffeur have all the fun, folks? Drive it yourself! Collecting art is popular among the rich 1%, . Art looks good in the living room and in the portfolio. They buy art on the basis of brand names, like Picasso, Manet, or Andy Warhol. But the supply of Picasso’s and old masters is limited. There are so many rich people chasing the same paintings, that prices are escalating at Sotheby’s and Christie’s auctions of fine art. Jackson Pollock’s drip paintings go for $50 million each. The Gustav Klimt painting of a German woman Adele Bloch-Bauer went for $135 million in 2006 to the lucky buyer, cosmetics magnate Ron Lauder. Prices are reaching for the stratosphere as the Ultra-Rich become art collectors.
Shopping Lifestyles of the Rich
The Ultra-Rich want unique cars that they don’t see on every street. Mercedes offers the Maybach; 20 feet long and $358,000, it can reach top speed of 155 mph. The Bentley Continental at $150,000 is also popular with the New Rich. There are the second tier luxury cars, BMW and Jaguar, for people who don’t want to look conspicuous. Why let the chauffeur have all the fun, folks? Drive it yourself! Collecting art is popular among the rich 1%, . Art looks good in the living room and in the portfolio. They buy art on the basis of brand names, like Picasso, Manet, or Andy Warhol. But the supply of Picasso’s and old masters is limited. There are so many rich people chasing the same paintings, that prices are escalating at Sotheby’s and Christie’s auctions of fine art. Jackson Pollock’s drip paintings go for $50 million each. The Gustav Klimt painting of a German woman Adele Bloch-Bauer went for $135 million in 2006 to the lucky buyer, cosmetics magnate Ron Lauder. Prices are reaching for the stratosphere as the Ultra-Rich become art collectors.
Shopping Lifestyles of the Rich
The fever for luxury goods is contagious among the Ultra-Rich. There’s a luxury designer store in Sao Paulo, Brazil. Customers arrive by helicopter and are driven in golf carts across the marble floors of the store. Watches have become a status symbol for the 1% club. Any $40 Timex will give you the time. But the Franck Muller timepiece, a select, handmade Swiss watch, is the most desirable brand. It sells between $5,000 and $600,000, and still has to be wound every day. The Muller model called Crazy Hours shows the numbers in a random arrangement around the watch face, which gets you a lot of attention for only $20,000.
They throw parties with extravagant decorations, They learn that it costs $60,000 to fix a broken windshield in the personal jet airplane. They hire nannies to raise the children, while they accumulate homes in Palm Beach, Nantucket, Sun Valley and the Pocono Mountains. They raise swans on the landscaped pond, and hope that the foxes don’t eat them. They employ maids, security guards, spa staff, kitchen staff and nannies, as well as managers. A large property requires maybe 100 employees, but they usually don’t keep count. They own a jet airplane or two, maybe a Gulfstream 550, and maybe a yacht and some water toys. During peak times of the year, their private jets cause congestion at airports in Aspen and Teterboro,. They buy $320,000 cars like the Rolls-Royce Phantom on an impulse. They vacation in exotic locales around the world, flying to St. Andrews, Scotland, for golf, a lodge in Wyoming for trout-fishing, a private island in Turks and Caicos, or a resort in Tahiti. They know their way around the world like the way you know way to the grocery store. They are most comfortable around other rich people. When everyone around you is wealthy, you don’t have to feel guilty about overdoing the excess. They belong to social clubs that charge up to half a million for a membership.They join ski clubs in Montana where you never have to wait in lines for the lift. They play golf on courses where tee times are unheard-of.
The New Rich often got their money by being hyper-competitive. And they remain that way, as they try to outdo each other with outrageous ways to spend their wealth. They compete for bragging rights by buying mega-sized yachts. The larger yachts are equipped to carry a half-dozen cars, a helicopter, a few motorcycles, as well as a decompression chamber for the divers, a walk-in freezer, a gym and night-vision cameras. If they have a sailboat, they’ll carry it on their 300-foot motor yacht. One owner I shall keep nameless has equipped the yacht with a swimming pool, a basketball court, a 12-person Jacuzzi, a Roman bath, a tank of piranhas, bronze cannons, and a music studio. The private submarine is launched from its docking station on the lower deck. If the Ultra-Rich want to rent a yacht, the charters go for about $800,000 a week. Some yachts are too long for the local marinas, and must use the commercial ports, docked side by side with the container ships and rusty cranes.
When the Ultra-Rich decide to contribute to charity, they also make philanthropy a competitive event. Most have a chain of personal foundations, with which to help worthy causes. The Ultra-Rich are on the boards of charities, art museums and opera companies.Ultra-Rich is an inflation-proof business. Their consumption is not affected by price increases.
But all is not rosy in the lifestyles of the Ultra-Rich. The richest 5% in the U.S. account for 20% of all the debt. For the Ultra-Rich, their income grows every year, but their share of national wealth has remained constant. They are spending more of their income, rather than accumulating it as wealth. Saving has been replaced by runaway spending. The Ultra-Rich who are founders of a public company have another financial quandary. Their company stock can be their biggest asset, but they do not want to sell off any shares, because they expect the stock price to continue rising. So, to support their lifestyle, they borrow money, using their company stock as collateral. This is where the family office earns its keep maneuvering the choppy waters of a down economy we them become their private banker, advisor, sounding board there gatekeeper. Running a family office is exactly the way it reads clients become family. Family offices are usually taken over by other family members or taken over by out side trustees. Family Offices are an old tradition going as far back to the 1600. It is an art and craft that is passed on from generation to generation. I to will pass this skill onto the next generation and hopefully they will pass it on to the next.
