The ultra-rich are defined as ultra high net worth individuals (UHNWI). To fall into this unique income bracket you have to have $30 million in investable assets. An investable asset excludes things like personal assets, property, collectibles, and consumer durables (assets that last for more than 3 years).
Although $30 million sounds like a humongous amount of money, there are an estimated 2,325 billionaires in the world. If their wealth were to be combined it would add up to a staggering net worth of US$7.3 trillion.
While some of the ultra-rich may live relatively modestly, others surround themselves in luxury. In order to understand the difference between “modesty” and “luxury” let’s compare the lifestyles of two famous billionaires, Warren Edward Buffett of the US and Prince Alwaleed bin Talal of Saudi Arabia.
Buffett still lives in the same home he bought for $31,500 as far back as 1958. He is also said to like simple foods like cherry Coke and McDonald’s hamburgers. However, he is among the richest of the rich. According to Forbes, “With a $73.9 billion net worth, he is now the second richest person in the world behind Microsoft founder Bill Gates, overtaking Spanish billionaire Amancio Ortega by $400 million…” Friday.
Meanwhile, the 26th-richest man in the world, Prince Alwaleed bin Talal of Saudi Arabia, with an estimated net worth of $20 Billion, is the first person in the world to own his own private Airbus A380. He uses this superjumbo as a private jet and it has been renovated for private use. It has been named “The Flying Palace” and it cost $188 million.
Generally speaking, when it comes to lifestyles, most of the ultra-rich are more like Prince Alwaleed bin Talal than Warren Buffett—they like to surround themselves in luxury.
They may drive cars like a Mercedes or Jaguar, but they often leave these to the merely affluent and prefer Bentleys, Rolls Royce, or Maybachs. They may enjoy going to the best spas in top hotels and resorts, but they prefer to buy their own spa equipment for their complete home spas, which includes hiring a private masseuse. They rarely, if ever, go to movies because they prefer to watch movies in the privacy of their own home theaters. And you’re unlikely to find one in a commercial airplane because they prefer flying in their own private Lear or Gulfstream jets.
The ultra-rich occupy their time competing with each other when it comes to buying luxury goods. They compete on who has the most beautiful swimming pools and luxury homes and compete on who has a bigger yacht. When writing his book, Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich, Robert Frank shares a story about interviewing a billionaire who was unhappy about the size of his 1000 ft yacht docked at a marina. He disparagingly referred to it as a dinghy because other yachts at that marina were two or three times bigger.
Houses, cars, yachts, and planes have become like new toys. Psychoanalyst Manfred Kets de Vries says that the super-rich has overwhelming desires to spend more to alleviate their sense of depression and boredom. He has named this condition “Wealth Fatigue Syndrome.” Since money is available in almost unlimited quantities, it can be difficult to find enough novel things to buy. Once the elusive purchases are made, interest wanes and the hunt is on to find something else worth buying.
Sometimes this desire to break away from boredom might this involves embracing risk. For instance, some luxury holidays in Australia might include the thrill of swimming with sharks. Most of the time, however, boredom is alleviated by buying and selling expensive things the way a stock trader might buy or sell shares. For instance, a garden might arrive on the back of trucks, only to be replaced by another instant garden when the owner got bored when there is a change in garden fashion. Another example: An entire art collection might be purchased to fill the wing of a house, with the buyer forgetting the name of the artist; then later, the collection may be sold to be replaced by another artist, another style.
To say that the ultra-rich live in a world of their own is a fitting metaphor. Perhaps, Robert Frank was right in comparing it to living in a unique country, which he tongue-in-cheek called “Richistan.”