Trifecta

Hello World

Wealth. In a popular sense, it is the lifestyle of the rich and famous. Celebrities, CEOs, Wall Street Hedge Fund Managers, Monarchs, Prime Ministers and Foreign Dignitaries all fall into this category. While some aspire to have this lifestyle, others criticize the exuberance of it. Their expensive tastes saturate the luxury goods market with Lamborghini, Patek Philippe, and Ermenegildo Zegna – words as illusive to the tongue as it is to the pockets of many. The media portrayal of these movers and shakers of the world is a lavish lifestyle that most would envy. Whether it is the fictional portrayal of Ironman’s wealth or the real life example of SpaceX and Testla Motors CEO (the inspiration behind the character Ironman himself), Elon Musk, the lifestyle of the affluent thrives in American media. What is it about this lifestyle that captivates so many people?

For me and other colleagues of mine, the chase of this lifestyle is a measure of success. Success not measured in monetary value, but as a leader in his industry. The commonality of everyone I have listed above is not just their wealth. It is their influence in society. It is their names and legacy that will live on in the history books that future generations read. As Economic students, we are type-A personality people labeled as goal-oriented, success driven sharks thriving in a dynamic fast paced culture. With the recent recession and turmoil in Europe, there have been many debates on class and the connotations of wealth have been dragged through the mud. The Occupy Wall St. movement raises the issue of unequal wealth. In other parts of the world, the economic boom of emerging markets such as The United Arab Emirates, Brazil, Russia, India and China have newly minted a social class of extraordinary wealth.

I have always believed that one should aspire to climb up the social ladders, not pull others down to their level. A few summers ago I had the opportunity to work with some of the wealthiest clients through an internship. In the financial world, they are known as ultra-high net worth clients. These guys, millionaires and billionaires, are the people who have more commas in their bank accounts than there are in this sentence. Moreover, they have overcome and continue to face challenges that are tremendous feats. Their lifestyle rewards them with every victory but the losses can be that much more painful, when you have so much to lose.

The multiple facets of the luxury market are as complex as the consumers that drive it. The effects of wealth cannot be measured in a monetary value despite our efforts to attribute a number to it. How is wealth created and destroyed? What value can do consumers attain through purchases that seem absurd to many? How are the new generations of young adult who are heirs to these vast empires that their forefathers built going to shape the luxury market? Are the technological advances in the world closing the wealth gaps? These are the intricacies that are not depicted when we think of wealth. Have a seat as we travel on our luxury yatch, jet, or sports car and navigate through this world.

Voices Post

You’ve found the love of your life, the cliché soul mate novels and movies talked speak about, the one who has made your life richer than any monetary value can measure. Taking your relationship to the next step, you would want to embark on a journey that unifies the two of you together – marriage. You also have a perfect way to proposed to her. More than that, you want to make sure the ring you give her is as eternal as the unfathomable love you bring her. What symbolizes that? How about the engagement ring Emperor Napoleon Bonaparte gave to Josephine to solidify their union? A piece of history that she will forever cherish, this luxury piece of jewelry cost a mere $948,000.

This post was documented by a site called luxurylaunches.com. New posts pop up every day regarding different products in the luxury markets. From surveys of the most expensive places to live to updates from the most luxurious companies and millionaires/billionaires, this site comprises of multiple articles that revolve around the luxury goods market. Covering all facets of the luxury markets, this site truly explores it through a unique and professional voice.

Although there are multiple authors who contribute to this site, the voice of an author name Neha stood out frequently. Neha opened the post "Napoleon and Josephine's Engagement Ring sold for $948,000" with "Great love stories are eternal, giving a piece of those love stories to your loved one requires two things, a big heart and a big pocket." When we look at Neha’s voice, it embodies much of the qualities one look for when interacting in the luxury world. A concise and succinct title clearly illustrates the professionalism one would expect. Neha also wrote, "Lucky as she is, for the man not just the ring, she now owns a part of history as engagement ring once belonged in the collection of Napoleon III, who was a nephew of Napoleon Bonaparte, and his wife, Eugenie, and then to their descendants." Relating it back to universal theme of marriage, Neha reveals a sense of character behind the net worth of the person purchasing this type of ring.

On another post titled, “Swarovski-studded stallion Lightning steals the show,” Neha wrote, “The term masterpiece fits this piece aptly as its painstakingly crafted using 39,600 hand-set Crystal Copper, Jet, Mocca, and Smoked Topaz crystals.” This tone illustrates and relates back to the overall message of the site of connecting and exploring the luxury goods market. Although the product is extravagant, the underlying message lies in the quality of work, the skills of the artists, and the craftsmanship that ties everything together. This type of voice promotes both a sense of expertise and presents the audience a world of luxury in a much more relatable fashion. 

Profile Post

Green! A color. A movement. A luxury blog? Yes, it does exist. Ladies and gentlemen I give you “Eco. Luxury. Style” This is a blog dedicated to this idea. While the green movement to build a more sustainable planet is not a new concept, it has been gaining more and more traction. Every year, top tier research universities crank out reports for this movement. In turn, environmental advocacy groups start lobbying our government for more laws and regulations in support of reducing our carbon footprint; everywhere from local, state, and federal. Eventually, companies need to comply with these regulations and create their own initiatives to incentivize their employees. I guess, the luxury market is a slow mover in this realm but this movement has finally reached it.   

You may have heard about luxury travels via private jets, but have you heard about sustainable air travel? Luxury jewelry completely saturates the markets in so many different forms, but have you heard about Ethical Jewelry practices? The luxury real estate market built vacation homes in the most exotic areas in the world, but how about sustainable are their home designs?

This site is truly amazing. Giving a dimension on the luxury goods market that has not been explored, this site devotes its content to exploring the greener side of this world. I would not be doing my job if I have offered this concept to you guys, but “Eco. Luxury. Style” is a pioneer in this field.

Imagine the typical “5 Most Expensive Vacation Destination” blog that appears on countless of magazines or websites. Now replace that with a headliner like “Cote d’Azur Sees Green.” The name Cote d’Azur elicits one of the most beautiful places to vacation well known for the Festival de Cannes, one of the most sought after ticket in the motion picture industry. In addition, this article explores places like Nice, Antibes, and Cannes in terms of luxury and eco-standards.

In addition to the traditional media blogs, this site also post videos regarding the luxury life. Just have a look into the “LuxuryLife Of Monaco & A Luxury Tour Of Monaco.”

Exploring this concept gives a new perspective into the future of the luxury markets and how our generation is adjusting to the green movement. This is a niche within a niche market. Moreover, it will invigorate future leaders of this industry to take into account the value added of “Eco. Luxury. Style” – forever changing the way the consumers think about the luxury market. 

Voices Post

One of the interesting sites you should take a look at is luxurylaunches.com. New posts pop up everyday regarding different products in the luxury markets. From surveys of the most expensive places to live to updates from the most luxurious companies and millionaires/billionaires, this site comprises of multiple articles that revolve around the luxury goods market. Covering all facet of the luxury markets this site truly explore it through a unique and professional voices. 

Although there are multiple authors who contribute to this site, the voice of an author name neha stood out frequently. Neha opened the post "Napoleon and Josephine's Engagement Ring sold for $9480,000" with "Great love stories are eternal, giving a piece of those love stories to your loved one requires two things, a big heart and a big pocket." This sets the tone for the article which depicts a sense of professionalism and with conventional language. This tone illustrates and relates back to the overall message of the site of connecting and exploring the luxury goods market. 

Neha also stated in this post, "Lucky as she is, for the man not just the ring, she now owns a part of history as engagement ring once belonged in the collection of Napoleon III, who was a nephew of Napoleon Bonaparte, and his wife, Eugenie, and then to their descendants." 

The Stranger Side of Luxury

Everyone has heard about the common types of products in the luxury market: cars, yachts, jets, fashion apparel, jewelry, watches, shoes, etc. Today we explore a stranger side of luxury. Call it the niche of niches. The truly rare and exotic items that are not meant for the public or rather not meant for even the most irrational collectors. Although there are more items that stretch the luxury market, these three embodied much of the drives that elicit the consumer to buy regardless of the price. Bear with me as we pull the curtains back and reveal the deepest reaches of the luxury market.

First up: Lionel Messi’s foot. The internationally known football (soccer) star has been immortalized with a solid gold replica of his left foot. Although Messi’s real foot would be worth a lot more, this is the closest you can get to owning the icon’s foot. Created by Japanese Jeweler, Ginza Tanaka, this gold statue has a price-tag of $5 million USD. Ginza Tanaka is also famous for his other solid gold works including a statue of Santa and Walt Disney’s character, Stitch.

What you’re looking at is a pen valued at $1 million USD. The Montegrappa Centennial Dragon fountain pen is used to celebrate the 100^th year anniversary of this brand. Moreover, the price of this brand as rich as its history. This writing instrument has been the brand of choice for heads of state and titans of industries and used to sign contracts and treaties that made history. When the Dragon pen debuted in 1995, it was used to pass the torch from Boris Yeltsin to Vladimir Putin as President of Russia.

Probably the strangest and possibly borderline absurdity of the luxury market product is Icelandic designer Sruli Recht’s “Forget Me Knot” ring. This ring is a gold band with 4 inches of Recht’s skin actually cut from his abdomen. At a price of $470,000 USD, this comes with a DNA certificate of authenticity and a DVD detailing its creation process. This truly is a one-of-a-kind ring (granted the artist doesn’t slice off more of himself).

The luxury market is as unique as the products that saturate it. Above are three products only a handful of people in the luxury industry have seen and fewer in the eyes of the public. While it’s understandable to want to possess a piece of history such as the Montegrappa Dragon Pen, it is hard to rationalize the “Forget Me Knot” ring. When purchasing these items one must try to comprehend the type of lifestyle the buyer wants to portray. Is it a fanatic appreciation of an iconic superstar, an ownership of a piece of history, or a sense of exclusivity? It is these inner drives that fuel the need to purchase such extravagant items. In the grand scheme of things, these items represent an extreme end of a spectrum where luxury finds itself entangled with human imagination. 

Social Bookmarking Soulmate

To find a social bookmarking soul mate who shares an interest in the wealth and luxury goods market as much a niche as the market itself. Through tons of digging, I have found Daniel Kong’s insight into this market quite interesting. He has bookmarked over 80 tags ranging from luxury branding, advertising, social-media, fashion and commerce. Although he has not tagged any sites since 2011, there is still much about the subject that we share. Throughout his tags, there is a specific emphasis on two particular regions of the world where the luxury market thrives: China and Hong Kong. These two emerging markets have defined the consumer spending of much of Asia.

One of the most interesting tags that I found most interesting is the link to the Luxury Institute, which is an independent and objective global research firm that studies the luxury markets and high net-worth consumers. Many studies conducted are quoted in publications such as Forbes, New York Times, Wall Street Journal, Bloomberg News, and CNN.  

Furthermore, another tag links us to Mobi.luxe, a blog pertaining to social media and the mobile trends in the luxury retail industry. This site stresses the some critical information regarding the strategies in promoting luxury brands such as the rewarding consumers with exclusivity and releasing product content in multiple episodes. 

The Rich Becomes Richer

When exploring the world of wealth, much is focused on the accumulation or the source. Today we dive into how to spend it! Literally you can dive into it via a luxury yacht, but for now we will look at a much more meaningful approach. Yes, the subject in question is philanthropy.

Whether it is through an already established charitable foundation or a newly formed one, the affluent class has donated hundreds of millions to billions each and every year. These foundations range from education to health, environmental causes to the arts, and religious groups to social services. These philanthropic societies today run on contributions from various sources. Corporate sponsorship and government grants comprise of a portion of these foundations. However, one of the main sources comes from the donations of affluent individuals and families.

Many have heard of the Giving Pledge started by Bill and Melinda Gates. The pledge specifically seeks billionaires to donate half of their wealth or more to philanthropic causes. An interesting note about the pledge is that it is a moral commitment and not a legal contract. Each signatory takes this pledge publically and is accompanied by a letter explaining their reason to give along with the causes they wish to contribute.

The inspiration for this pledge comes from the idea that with great wealth, comes great responsibility to use that wealth to create a better world. In their letter, Bill and Melinda Gates explained the mere foundations of life for children comes from having the necessary health care and education, yet these two luxuries are deprived from children around the world. Easily preventable diseases, such as rotavirus, take the lives of half a million children every year. Contributing to school systems that pave the way for kids to enter college well prepared. That is why they give. Since the founding of this idea, others have joined the pledge with 92 signatories including Warren Buffet and Mark Zuckerberg being major contributors.

On the other side of the coin, a noble gesture such as this has met with much scrutiny. Many critics argue that the underlying motivation lies in the tax incentives that the wealthiest individuals are receiving by making donations to philanthropic organizations. I would argue that in addition to the money, these foundations are getting much exposure and awareness through media and association with these individuals. Moreover, these incentives are designed as means of efficiently promoting philanthropy and the spirit of giving back to one’s community. An emphasis is placed on the cause and the world issues they are promoting. A selfless act turned sours when critics divert the attention back to the individual rather than the cause.

When you have accumulated enough wealth to purchase just about every possibility in the world, what else do you hope to accomplished? What kind of legacies will be left behind? How does the rich become richer? Through making a difference in the lives of millions of people. Through changing the world for the better. And finally, through a positive impact unquantifiable by a numerical value. 

Numbers

Have you ever wonder just how wealthy you are compared to the rest of the people in the world? Today we switch over and talk purely about numbers. Let’s begin by taking a number like the number 100. I chose this number for more reasons than it simply being a nice round even number to work with. It is the largest denomination of currency in the United States in circulation. Moreover, let’s take 100 people. Make that 100 wealthiest people in the world. In the year 2012 alone, they made over $240 billion. To put this amount into perspective, if we were to take these guys and build a hypothetical country. Their 2012 earnings will be ranked in the top 20% of world GDP. Of course that $240 billion is not proportional with some of those individuals making a substantially larger amount than others and 16 actually making a net loss. To simplify it though, if it were proportional each individual will be taking home a nice $2.4 billion in one year alone.

The numbers do not end here. What I merely described above was just one year. How about their entire net worth? Sum it all up and those 100 people will have a net worth of $1.9 trillion. The United State, the richest nation in the world has a GDP of about $14 trillion. More than ten percent lies in the hands of 100 people. Now the number one trillion is used often these days regarding the deficit of the United States. But how much is one trillion dollars?

To answer this question we go back to our nice round even number at the beginning – the good old $100 bill. At financial banks, a stack of $100 bills band together makes $10,000 which is a little less than ½ an inch thick. Take 100 of those stacks and you have $1 million. These stacks can easily fit in your backpack. Take a regulate construction pallet that’s about four feet long by three feet wide and start filling it up with these stacks of $10,000. When you reach about half the height of an adult, you will have $100 million. 

Ten of those pallets will be $1 billion. It would take 10,000 pallets in order to make $1 trillion. That is about enough to fill the size of a NFL football field four times over!

With the overuse of the number 1 trillion in the news, we lose sight of how much that really is. It’s an astronomical amount of wealth. The net worth of just 100 people is actually close to $2 trillion. The burgeoning wealth in emerging market has created so many opportunities for innovations as well as social welfare. As we look at the numbers alone, it is not surprising that the luxury market has experienced so much growth in the past years. With a new class of consumers with an explosive growth in their net worth and a taste for high end products and experiences, the luxury market parallels this growth and continues to deliver. 

The CEO, The Fisherman, and The F-you Number

Today I will introduce you to a number. This number is different for every person out there. But there is a commonality that links everyone to this number. Simply put, it is called the F-you Number.

Let me go into depth about what that really means. F-you money is basically the money you have in your bank that allows you option to say f-you to your boss at a moment’s notice and not worry about what your next paycheck is going to look like. It represents complete financial independence and stability from any worries in the world. This is one of the pillars of the luxury world.

Money is nothing but some metals in your pocket, some pieces of paper, or a number on a computer screen. It is the ideology of those metals, papers, and numbers that gives values to it. More importantly is it the lifestyle that it represents. Here is a story I once heard:

A CEO was vacationing on a remote tropical island when he came across a small fisherman reeling in his catch of the day. He asked if he could buy the catch and the fisherman agrees to sell it to him. When the transaction was done, the fisherman decided to pack up and head home. The CEO then asked why he wasn’t going to continue fishing when the day is barely noon. The fisherman replied that he is the best fisherman on this island and he had already caught enough to feed his family plus extra to sell to his neighbors. He was just going to go home, spend his leisure time napping, and play with his children. The CEO quickly replied that since he is the best fisherman, he should partner up and start a business. The fisherman asks “why?” The CEO said because he is the best fisherman, he could hire more people, teach them how to fish, spend his time building up the company, then take it public, and have more money than ever before. The fisherman then asked, “And what will I do with all that money?” The CEO replied, “I guess with all that money, you can retire to a remote tropical island, spend your leisure time napping, and play with your children.”

That allegory is just used to explain what wealth embodies. If you have enough assets and a fixed income stream that allows you to the option of work without taking compensation into account, does that mean you are truly wealthy? The common question “What would you do if you know you cannot fail?” is merely a derivative of the foundation that wealth provides. That is why the F-you number is relative from person to person depending on your lifestyle. Look at multibillionaire, Donald Trump who amassed a fortune in the real estate market. However, a not so notable fact is that his company has filed for bankruptcy not once, but four times. There are others who amass the same fortune and loss just as much. The fickleness of wealth does not pay favor to any one person. That is why wealth itself is relative and so hard to define. 

Rich Kids of Instagram

Last month there was an article by psychologist Dr. Drexler published on the Huffington Post about wealth and parenting a generation where social media has dominated most of their lives. The global reach of social media makes sharing small pockets of your life from a morning coffee to a group outing readily available. Now take this to another level and add wealth into the picture, literally. Let me introduce you to a site known as Rich Kids of Instagram. Cars such as Ferraris and Lamborghinis, private jets and yachts, luxurious travel destinations, and extravagant shopping sprees detail the lives of these kids on a grandiose scale and continually fill this site. As the name suggests these are the toys of kids who have grown up in such a lifestyle.

When I think back to this article, there was one quote that stood out to me the most, “As absurd as it might sound to many, it's not easy being a rich kid.” With the United States in a recession just a couple years ago and the current state of Europe, those with wealth are seen as scapegoats. These kids knowingly flaunting their wealth just adds to the conflict. However, this article goes into the mindset of the privileged. Their parents expect the highest achievements from these kids which they do attain through excelling in academics and sports. However, these kids face a different confine that wealth brings. 

Sometimes the children feel overshadowed by their parent’s wealth. Living up to an empire your father or grandfather built and continuing that legacy is an enormous task. Imaging having your life dictated when you were born. Pursuits of different ventures are encouraged but the looming cloud that you should carry on the torch hoovers in the back of your mind. Then there is the struggle to develop a sense of self and character. The entitlement and narcissism comes into play more often than not. In a world where meritocracy is emphasized, nepotism thrives in their playground. 

Wealth is a double-edged sword. It brings about vast opportunities and restrictions. We only see the glamor but very few know the other side. I was fortunate to work with some high net worth individuals a few summers ago when a small conversation broke out about wealth. One account was when I was told that his children are not allowed to have Facebook or any other social media. He feared that they are kidnapping targets due to his wealth. So in response they are constantly surrounded by security. Family vacations are often secluded and remote. In a sense, the social media interactions are the closest interactions they get with others not familiar with their world. 

Overall, the struggles to develop character rest on the parents as much as it is the environment in which their kids are brought up. There are some that take the opportunities wealth provide and amplify it by giving back to their communities. Others foster a lifestyle of exuberance. At the end of the day, parents are the best filters. 

Hello, World

Wealth. In a popular sense, it is the lifestyle of the rich and famous. Celebrities, CEOs, Wall Street Hedge Fund Managers, Monarchs, Prime Ministers and Foreign Dignitaries all fall into this category. While some aspire to have this lifestyle, others criticize the exuberance of it. Their expensive tastes saturate the luxury goods market with Lamborghini, Patek Philippe, and Ermenegildo Zegna – words as illusive to the tongue as it is to the pockets of many. The media portrayal of these movers and shakers of the world is a lavish lifestyle that most would envy. Whether it is the fictional portrayal of Ironman’s wealth or the real life example of SpaceX and Testla Motors CEO (the inspiration behind the character Ironman himself), Elon Musk, the lifestyle of the affluent thrives in American media. What is it about this lifestyle that captivates so many people?

For me and other colleagues of mine, the chase of this lifestyle is a measure of success. Success not measured in monetary value, but as a leader in his industry. The commonality of everyone I have listed above is not just their wealth. It is their influence in society. It is their names and legacy that will live on in the history books that future generations read. As Economic students, we are type-A personality people labeled as goal-oriented, success driven sharks thriving in a dynamic fast paced culture. With the recent recession and turmoil in Europe, there have been many debates on class and the connotations of wealth have been dragged through the mud. The Occupy Wall St. movement raises the issue of unequal wealth. In other parts of the world, the economic boom of emerging markets such as The United Arab Emirates, Brazil, Russia, India and China have newly minted a social class of extraordinary wealth.

I have always believed that one should aspire to climb up the social ladders, not pull others down to their level. A few summers ago I had the opportunity to work with some of the wealthiest clients through an internship. In the financial world, they are known as ultra-high net worth clients. These guys, millionaires and billionaires, are the people who have more commas in their bank accounts than there are in this sentence. Moreover, they have overcome and continue to face challenges that are tremendous feats. Their lifestyle rewards them with every victory but the losses can be that much more painful, when you have so much to lose.

The multiple facets of the luxury market are as complex as the consumers that drive it. The effects of wealth cannot be measured in a monetary value despite our efforts to attribute a number to it. How is wealth created and destroyed? What value can do consumers attain through purchases that seem absurd to many? How are the new generations of young adult who are heirs to these vast empires that their forefathers built going to shape the luxury market? Are the technological advances in the world closing the wealth gaps? These are the intricacies that are not depicted when we think of wealth. Have a seat as we travel on our luxury yatch, jet, or sports car and navigate through this world.