search
Wealth

How the Super-rich are spending their money

Andrea Divirgilio / March 13, 2012

For those that believe the super rich folks have stopped spending on their hi-end lifestyle preferences might be in for a surprise. According to a report by the Harrison Group and American Express, the global spending on luxurious brands increased by around 8% in 2011, which on monetary terms equals to $359 billion. Another similar kind of data analysis by Moody’s Analytics shows that the top 5% of the richest households actually account for 37% of all consumers spending. They just reveal that even though we faced an economic slump a few years back, splurging on luxurious amenities and products are back to what they were before the slump set in. And all of this isn’t just about the rich folks in the west splurging on their lifestyle; some reports forecast that by 2020, China will become the world’s largest consumer of luxury brands which include the likes of Louis Vuitton, Bentley and Patek Philippe.

The rich and their splurges

Beginning with this year, the habits certainly don’t seem to have changed much. The current First lady of Russia, Svetlana Medvedeva has begun the year by hiring the entire spa of the Hotel La Pace in Montecantini Terme, Italy, that too for an entire week. The Italian Spa is also known to have played host to prominent names like Arnold Schwarzenegger and Paul Cezanne, and it was only befitting that the Russian First lady spend her spa vacation there, albeit with a 30-strong entourage, as well as her son for company. The rooms hired, itself would cost between €600- €1,300 ($787- $1,704) a night apart from the exotic spa treatments, the dining and other forms of entertainment. What this visit also means, is that the locality will be even more prominent on the luxury world tour map, thus doing a lot of good for the local economy. Guess the other Russian Billionaires and oil sheikhs in the Middle East, might just follow suit in the near times to come.

Svetlana Mevedeva and the La Pace Spa

However, the Russian First Lady wasn’t the only one spending the big bucks. Another billionaire from her country, steel tycoon Alexander Abramov has just splurged in excess of $40million, to build what might become New Zealand’s most expensive private residence. Covering a total area of 43,055 square feet, this mansion would have everything that a person could ask for in a home in this part of the world. Estimates show that this size is more than 6 times the traditional size of a home in the area, and it was natural that the location be equally exclusive to allow such a vast expanse of the estate to take place. Under construction, this property will enjoy pristine views of the Helena Bay, and of course, its abundant natural bounty. This shows that despite the fall in real estate prices, there are indeed some premium properties that might interest billionaires to splurge for an extra space knitted with luxury.

Alexander Abramov and his Helena bay mansion

With real estate being one of the most prominent area where the rich are spending millions to own their dream home, sale of most expensive homes sold around the world are making new records amidst the real estate slump. Recently, Billionaire Eddie Lampert was reportedly all set to buy the Indian Creek Island mansion for $40 million, while supermodel Gisele Bundchen and Tom Brady‘s have put in $20 million to build their eco-luxurious mansion in Los Angeles, and Gucci owner Francois Henry Pinault, picked up a 2-bedroom setup in Chelsea (south-east London), for $32 millions.

On the flashy side, billionaires love their toys; yachts and private jets. The uber-wealthy love to plunk millions on personal jets with customizations galore. Though the buyer’s name has been kept strictly under wraps, but recently a Boeing 747-8 Intercontinental personal aircraft was bought by a wealthy Qatar buyer who dished out a hefty $333 million to customize his aircraft. As some might know, is perhaps the largest air carrier behind the Airbus A380, and hence been a favorite amongst the rich folks to customize as their personal offering. The custom details include a modernized setup to house 467 seated passengers, apart from having a fully equipped sitting lounge area, kitchen and dining area.

Boeing 747-8 Intercontinental passenger jet

Supposedly the Boeing is stated to stay for a few months, in the custodianship of the Wichita production facility where some more technicalities will be looked into. After all, when the buyer mention that’s his aircraft should be a jewel of the sky, there might as well be a struggle to create a perfect piece much like Saudi billionaire Prince Al-Waleed bin Talal al Saud, who had ordered a Airbus A380 for himself.

But, real estate, private jets are just few categories where the rich are spending, all that discretionary spending includes a lot of wise investments in terms of collectibles; from vintage cars to rare wines, art and artworks like we have earlier rounded up featuring most expensive auctions and their winners. The wealthy collectors are not hesitant in investing where their passion lies, including traditional collectibles like rare coins, vintage cars and celebrity memorabilia to unconventional collectibles, including investment-grade luxury watches designed by the venerable watchmakers for auctions and charity events.

  • pinterest