View Full Version : Luxury Shame
http://www.newsweek.com/id/171246/?gt1=43002
SFW
Interesting.
I have heard people say things like "10% of the population controls 90% of the wealth". What they miss is that this means that those 10% of the population are paying the rest of our salaries when they spend that wealth.
A rich guy buying a yacht stimulates the economy in so many ways before (manufacturing the yacht), during (selling, delivering, customizing) and after (crew, fuel, berthing) the sale that most people don't even fathom.
Everyone is worried about the middle class tightening up and stopping spending, but a school teacher buying a big screen TV at Best Buy creates maybe a tenth of a job, whereas that rich guy buying that yacht creates AND SUSTAINS literally hundreds.
Can anyone define rich for me? I make low 6 figures a year and I do not consider myself rich. There are others that make 2-3 times what I do and they are definitely better off and it has to do with their previous situation and how they lived, etc...
I am sure that to the guy working at Mc Rats for 6.50 an hour I am rich. To me it is completely a subjective term.
Obviously it's subjective.
IIRC, a study came out earlier this year that put the following numbers together (rough, based on my memory)
Half of taxpayers make less than $30k/year
2/3 of taxpayers make less than $50k/year
90% of taxpayers make less than $100k/year
1/4% (yes, .25%) make over $1 million
So, since to most people "rich" is really "anyone that makes more than me", you are most definitely rich to 90% of the US population. Which puts you in a shitty position when it comes to public policy, taxes, etc. because it's you against 90% of your fellow countrymen.
On the flipside, I rarely hear people refer to themselves as "rich". I recently spent the day with a family that has a primary residence overseas, a house here locally, and a house on the west coast. Wife doesn't work at all, and they are still supporting 4 over-18 children. However, if asked they would not say they are "rich", even though I would guess that they are probably in the top 2% of earners in the country.
Can anyone define rich for me? I make low 6 figures a year and I do not consider myself rich. There are others that make 2-3 times what I do and they are definitely better off and it has to do with their previous situation and how they lived, etc...
I am sure that to the guy working at Mc Rats for 6.50 an hour I am rich. To me it is completely a subjective term.
I believe wealth and being rich are two different things. Wealth deals with money, but all the money in the world wont make you rich or happy.
...but all the money in the world wont make you rich or happy.
Oh, yes it would! :D
Dave,
Write me a huge ass check and I'll report back as to how I am feeling. :D
I believe wealth and being rich are two different things. Wealth deals with money, but all the money in the world wont make you rich or happy.
CarlosDJackal
12-02-08, 06:57
http://www.newsweek.com/id/171246/?gt1=43002
SFW
Interesting.
ZDL,
It would really be a great help if you actually posted the article instead of just the stupid links. Especially for those of us who have slow connections (like me when I am at work).
It's not that hard!! :rolleyes:
---------------------------------------------------------------------------------
Luxury Shame
Why even the very rich are cutting back on conspicuous consumption.
By Johnnie L. Roberts | NEWSWEEK
Multimillionaire Michael Hirtenstein used to flaunt his acquisitions of opulent real estate. "I collect homes because I enjoy it," he once told DansHamptons.com about his eight properties—which included a $27 million apartment on the 76th floor of Manhattan's Time Warner Center. In August 2007, the 45-year-old Hirtenstein, who made his fortune in telecommunications, regaled the New York Post with his plans for a $35 million, glass-enclosed duplex in Manhattan's Tribeca neighborhood, replete with suede-covered walls, three living rooms and a heated pool with built-in underwater video screen. Alas, the economy ground to a halt, and so did Hirtenstein's conspicuous consumption of real estate. He quietly reneged on the Tribeca duplex, forfeiting a hefty deposit. That isn't to say Hirtenstein is now selling pencils from a tin cup. "I could walk downstairs now and buy a Ferrari," he says from a suite at Wynn Las Vegas, which boasts a dealership. "But all of my friends are hurting. I don't feel like buying random toys."
Across America's upper strata, rich folk like Hirtenstein are experiencing an unfamiliar emotion: luxury shame. The late Coco Chanel, doyenne of 20th century fashion, long ago said that luxury is "the opposite of vulgarity," not of poverty. But in these recessionary times, it seems vulgar to flaunt one's luxurious lifestyle. And so the wealthy are going blingless and eschewing the spending sprees of the recent Gilded Age, giving new meaning to the phrase "embarrassment of riches." The trend is horrible news for the $175-billion global luxury market, which is already absorbing the blows of plummeting personal wealth. Just in time for Christmas, this new "embarrassment of riches" is cutting into sales of high-end retailers and brands like Neiman Marcus and Saks Fifth Avenue, Bentley and BMW, Christie's and Sotheby's.
As hard-hit luxury advertisers scrimp, the sheen is dulling on the glossy, overcrowded, and once ad-rich collection of media that caters to the rich and famous. Ads in the December issues of major luxury magazines have plunged 22 percent from 2007, Media Industry Newsletter reports. Conde Nast—publisher of Vanity Fair, W and Vogue—is cutting issues of Men's Vogue and the new business glossy, Portfolio. Robb Report, the bible of connoisseur tastes that enjoyed years of prosperity during the era of hedge-fund billionaires, has watched its advertising freeze. At American Express Publishing, which owns Travel-Leisure and Departures magazines, among others, "ad sales just hit a wall" after years of growth, says Ed Kelly, CEO.
Unofficially, profligacy became passé on Oct. 6, when disgraced Lehman Brothers CEO Richard Fuld appeared at a congressional hearing after the firm's historic $600-billion bankruptcy. He encountered a blizzard of scorn over his half-billion-dollar compensation and baronial lifestyle: a $21 million Park Avenue penthouse, a $25 million estate in Greenwich, Conn., and an estimated $200 million art collection. "I have a basic question for you: Is this fair?" asked Rep. Henry Waxman. Fuld only could muster sheepishness. (This month, he auctioned off $20 million of his art collection.) Not long after Fuld's public pillorying came the shameful disclosure that troubled insurer AIG had lavished top employees with a $440,000 spa retreat at a ritzy St. Regis resort—held after Uncle Sam stepped in with a bailout that is costing taxpayers $150 billion.
Now, up and down Wall Street, the rich are showing off newfound contrition. Last month, Steve Schwarzman of private equity firm Blackstone Group expressed regret for the $3 million he spent on his 60th birthday party in February 2007—an event that politicians and the press won't let him forget. "Obviously, I wouldn't have wanted to do that and become, you know, some kind of symbol of sorts of that period of time," he told a media conference in New York. Schwarzman, whose Blackstone stake totaled $8 billion in June 2007, is down to his last $2 billion to $3 billion on paper as a result of the stupefying drop in the stock market.
This new frugality is also taking the gleam off Tinseltown. "Would I go out and buy something showy? Not at a time like this," says one of Hollywood's richest moguls. "It would be like bragging. "At Disney, top film marketers reportedly are agonizing over the planned Valentine's Day release of "Confessions of a Shopaholic," about a young, brand-obsessed woman. They reportedly are considering reworking the ending of the film to address today's harsh economic realities. And Washington is suffering pangs of debt regret. One caterer there likens the current wave of inconspicuousness to an earlier time. "It feels like after we went to war with Iraq," says Mark Michaels, owner of Occasion Caterers. "It's not a wise thing to throw a big jolly party. "In real life, meanwhile, fashionistas are throwing on off-priced frocks and remodeling themselves as "recessionistas." Michelle Obama recently wore a $400 ensemble from J. Crew on "The Tonight Show," instead of a designer dress.
Calling this the Death of Luxury would be a grand embellishment. Consumers have taken a respite from opulence before—for example, when the Greed-is-Good era died with the '87 market crash, and after 9/11—only to shop with a vengeance after a respectable amount of time had passed. Natural-born shamelessness assures the survival of extravagance: Sean Combs, for one, would cease to exist were he to leave the lap of luxury. And why should the wealthy elderly, facing actuarial fate, embrace asceticism in their waning years? Some upscale purveyors believe luxurious living, like cigarette smoking, is an unshakeable habit. "It's very difficult to go downward... once you get used to this level of service," says Julian Niccolini, managing partner of New York's Four Seasons restaurant.
Patrons as unfathomably affluent as some of his regulars ( David Koch, $17 billion, estimates Forbes magazine; Ron Perelman, $9.5 billion) are seen by luxury goods marketers as conspicuous consumers of last resort. They are among the world's 10.1 million "HNWIs" (high net worth individuals) with $40.7 trillion in combined assets, according to the World Wealth Report 2008 from Merrill Lynch and Paris-based consultant Capgemini. "We're dealing with an area that's beyond wealth," says Bill Fischer, a luxury travel agent. "If someone loses a couple $100 million in the stock market, his lifestyle stays the same. They always want what they want when they want it."
So what are luxury brands and merchants to do in unpopular times? Cultured pearl master Mikimoto, for one, is downplaying glitziness and highlighting heirloom appeal. In early October, it launched a new campaign called "the Original," in which the 115-year-old company emphasizes its tradition by featuring the image of a single cultured pearl in an open oyster shell. "That was a statement that only Mikimoto could make," says Maureen Gribbin, its chief USA spokeswoman. "Back to basics." Curtis, CEO of the Robb Report's parent company, notices the change in tone. "Among the very highest end brands, we are seeing an appreciation for quality and the connoisseur, for pedigree and history over showiness," he says.
Other luxury brands are cultivating a guilt-free image with the timeless strategy of altruism. "You don't realize you've attended the launch of an automobile," says Marvet Britto, CEO of a New York PR agency, "because the vehicle is parked in front of a charity event." In the past, elite marketers like Prada and Masarati matter-of-factly donated deluxe goods to charitybuzz, which orchestrates high-end charity auctions. But lately, they want more exacting "details on the target audience of bidders for our events," says founder Coppy Holzman. "They want to get their brand message in front of top audiences." And in deliriously bidding small fortunes, he adds, the audiences also "address a guilt reality in their psyche." Profligacy is passé now at Charitybuzz, too, Holzman allows. Instead of a fantasy trip that fetches $100,000 bid, he'll opt to sell four trips at $25,000 each—"luxury, but not over-the-top obscene."
And making the scene now is a new style of luxury retailing that, oxymoronically, is introducing discretion and thrift to conspicuous consumption. How can spendthrifts get their fix without the guilt? One option: upstart online membership-only sites like Gilt.com and ideeli.com, which hold first-come-first-served, deeply discounted sales of luxury goods in limited supply. The purchases arrive in the mail in unadorned boxes. Customers "don't want to be seen walking around with huge Prada shopping bags," says Gilt Group CEO Susan Lyne, the former ABC Network president and Martha Stewart chief executive. Now there's a concept: conspicuous consumers who are in the closet.
© 2008
Submariner
12-02-08, 09:32
Guys who can afford to own and shoot multiple AR's, Aimpoints, PMags, and gear are rich.
An embarrassment of riches, as the phrench say.
Anyone really need more than two per shooter?;)
Guys who can afford to own and shoot multiple AR's, Aimpoints, PMags, and gear are rich.
An embarrassment of riches, as the phrench say.
Anyone really need more than two per shooter?;)
Yes you do need more than 2 pmags for zombies!;)
FromMyColdDeadHand
12-02-08, 10:44
To me rich means not having to work. You can make $1million a year and have a $1.2million yearly vig and not be rich. Or make $30k, not spend anything and have $50k in the bank which you can live off of for 10years.
To me rich means not having to work. You can make $1million a year and have a $1.2million yearly vig and not be rich. Or make $30k, not spend anything and have $50k in the bank which you can live off of for 10years.
I figure if someone can just give me $35 million (or a $70 million lottery payout, taxes don'tcha know!) I could put it in freakin' escrow and take out the equivallent of $100k/year for the next 80 years without even having to earn any interest. That should also leave about $1 mil to buy a house and some land to start with, and $100k/year (adjusted for inflation) should be enough to take care of the expenses for the next 80 years.
:D
Now, where'd I put that rich grandmother....
:eek:
I remember having a discussion with a millwright that used to work for me where he was going on and on about how the republican government (at the time) was only looking our for the rich, and CEO's were making too much money, and no one was looking out for the little guy or the working man.
So knowing he was a UAW skilled tradesman and his wife had an unskilled job on the assembly line, I asked how much they pulled down together. He said around $200K.
So I told him he WAS rich - that income puts them in the top 5% of IRS filings. He should be happy to give back his money to help the real little guys...
The point is, it's all relative. The more you make the more you spend. The more you have the more you want. Human beings seem to relish the quest to get something they don't have, whether it's money, possessions, fame, power, or the affection of another person. People are most productive and focused when they are trying to achieve a goal. But a lot of it depends on where you live and the company you keep.
Wealth to me anyway, isn't defined by your earnings. It's defined by the difference between your expenses and your earnings. For pure example, if you make 30k and spend 15k a year in expenses... you're doing well. I have friends that make 200k and have had to borrow money form their elderly parents to meet this months BMW payment.
I posted the article because I felt this way during thanksgiving. My wife and I do well and have specifically expanded our wealth in the last 24 months. My wife's family however are struggling. Home foreclosures, lost jobs, hospital bills etc. etc. They came to our new house and sat on our new furniture, and saw our new cars etc. and for some reason I couldn't stop feeling uncomfortable.
I felt this way when I bought my last vehicle. Sales guy is telling me about lean times, hard to pay his bills, lay offs, etc. and here I am writing a check....
Wife runs into it at work as well. We are going out of town this weekend and she made the mistake of mentioning it. All shes heard is "wow, must be nice to be rich" and "give me some of money" or "I can't even pay my bills and you are jet setting".
Article was interesting to me at any rate.
rob_s,
In this part of the world, $1 mil will get you a decent condo, but no land or maybe a small, beat-up, "starter" home on an under 10,000 sq ft lot...
Nathan_Bell
12-02-08, 13:11
rob_s,
In this part of the world, $1 mil will get you a decent condo, but no land or maybe a small, beat-up, "starter" home on an under 10,000 sq ft lot...
Ouch. 150 Acres farm with 136 acres tillable with 2 bank barns, two smaller out buildings and a 2600 sqft brick farm house (1922 built) went for $755 K two months ago just down the road from me, and I thought it went about $145K too high...
FromMyColdDeadHand
12-02-08, 14:01
rob_s,
In this part of the world, $1 mil will get you a decent condo, but no land or maybe a small, beat-up, "starter" home on an under 10,000 sq ft lot...
When we moved to Denver, I thought land would be cheap! I knew we were in trouble when they listed lots in square feet, and 6250sq ft is called a double lot!
Glad I'm not in Payola Alto though!
rob_s,
In this part of the world, $1 mil will get you a decent condo, but no land or maybe a small, beat-up, "starter" home on an under 10,000 sq ft lot...
Fortunately, if you don't have to "earn" it, you can pick where you want to live. :D
I think I'd hover around N. Florida in which case $1 mil would get me plenty of room.
The money is gone. The job is gone. The house and land will be soon. Can't seem to find another job. 10 year old son won't have a Christmas in the traditional sense. I am putting my faith in God. It's all I have left.
And now, we have this presidential elect fellow....
:( dog
I regret peoples problems. But when you are where I am, it sure looks good to be where some of you are. The internet bill and electric were pre-paid a bit, case you are wondering...(The best thing I got was paying off my truck. Glad for that. And for owning my guns)
dog
Be Thankful!!
Don Robison
12-02-08, 22:56
I believe wealth and being rich are two different things. Wealth deals with money, but all the money in the world wont make you rich or happy.
I'm willing to give it a shot. If I'm not happy I'll let you know:D
The money is gone. The job is gone. The house and land will be soon. Can't seem to find another job. 10 year old son won't have a Christmas in the traditional sense. I am putting my faith in God. It's all I have left.
And now, we have this presidential elect fellow....
:( dog
I regret peoples problems. But when you are where I am, it sure looks good to be where some of you are. The internet bill and electric were pre-paid a bit, case you are wondering...(The best thing I got was paying off my truck. Glad for that. And for owning my guns)
dog
Be Thankful!!
Sorry to hear of your plight Dog, I'll be praying for you and your family.
Buckaroo
Thanks, Brother, because that's where I'm at. I have my wife and son and my truck and guns. Stand to lose everything else, soon. So I guess I am better than some.....God will provide. Merry Christmas All!!
dog
Powered by vBulletin® Version 4.2.5 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.