Yahoo Finance '£170 million won't get you very far these days - it costs more to be super-rich than ever'
There are few things more likely to be ruinous than schemes for personal enrichment. And one of several failed initiatives I have incubated over the years was to teach the very rich how to enjoy themselves.
My simple idea was to say “Look at me, follow me and do exactly what I do”. The problem here was that my illustrative idea of a good time was some desultory tennis followed by a long lunch in the sunshine with attractive and amusing friends. “And how much does that cost?” someone asked. “Actually, not a lot” I had to confess.
So, this week’s “lucky” £170m lottery winners have a big problem with their small fortune, for it is nowhere near enough to feel, in these inflationary days, rich. I mean, not seriously rich. Not when Killik, an investment advisor, warns that putting two 13 year-olds through private school will now cost precisely £905,600. And that, according to Coutts’ Luxury Price Index, luxury inflation has risen by 2.9 per cent over the last year, with food and alcohol seeing the sharpest spikes.
That’s not to say paths of indulgence are closed – even if your millions won’t get you as far as they once did. Take the Gulfstream G650, a ‘plane that will travel at nearly the speed-of-sound (at which point you can actually hear your cash burning) and has a range of 8,000 miles (so you can escape vengeful creditors). It costs $65m. There are currently two hundred customers anxious to save just 30 minutes on, say, a transatlantic journey – but our lottery winners could not realistically afford a Gulfstream. Instead, I would recommend one of the new generation VLJs (Very Light Jets), including the HondaJet and Cessna Citation M2. Or an Embraer Phenom at a mere $9m. At East Hampton airport you would be treated like a leper if deplaning from a VLJ, but nowadays you have to face-up to the fact that £170m is a tight budget.
Many of the best things in life are not free, but very expensive indeed. As Dorothy Parker said, if you want to know what God thinks about money, just look at the people he gives it to. The Very Rich are different to you and me because they have much more money. Psychologists know that this makes them behave badly; Michael Lewis, author of Moneyball, (net worth by some estimates $313m) said great wealth “triggers a chemical reaction on the privileged few. It tilts their brains”. Multiple studies show that the very rich fail to read emotions and that, given the chance, they will run you down in traffic or steal your biscuits.
Yet doing so in a classic car might be tricky when there’s only £170m to play with; a 1962 Ferrari 250GTO was sold for just over £39.6m last year. And this year, a Bugatti “Voiture Noire” reached a record for a new car of £15.5m – before it had even run. Of course, Lottery Winners will need a cellar, but it will not be a very full one if tastes run to the rare Domaine de la Romanee Conti wines, Burgundy’s finest. A 1945 bottle recently sold for £424,000. Or what about a bar stocked with fine single malts? With just £170m to spend, you would have to be careful who exactly you invite for cocktails when a 55-year-old Macallan can fetch £163,937.
And with £170m, you have not got your foot even on the bottom rung of the property ladder. When people say that the luxury market is softening, they are wrong. A penthouse at 220 Central Park West was recently sold to an Illinois hedgie for $238m. Magnificently he explained that it was just somewhere to stay when he was in town. In London, Foxton’s recently sold an apartment in the oppressive One Hyde Park for £160m, which would leave just enough change to furnish it with a modest Francis Bacon and a magnificent splurge at IKEA.
These Lottery riches would not, for example, allow you to build much of an art collection. And it’s a truth universally acknowledged that the Very Rich like to disguise their cruelty and greed by a good scrub in art-wash. For instance, a Jeff Koons does not leave much change from $100m : his awful ”Rabbit” was sold in New York last May for $91m. And £170m does not get you near Leonardo territory. The equally awful “Salvator Mundi” was old for $450m and is, in any case, likely a fake. If the one real Leonardo still in private hands (in Poland) ever got to market, I reckon it would reach a billion. Instead, I would advise our Lottery winners to start collecting masterpiece photographs. They could buy a signed Cartier-Bresson print for only several hundred thousand.
Nor will £170m get you into superyacht waters. Mohammad bin Salman spent $330m on his Pharaonic palazzo. Instead, you could afford to charter an Uber and ride to Plymouth to visit Princess, one of the world’s big four manufacturers of mid-size, motor-yachts. To give you a harrowing sense of how poor you are and how many Quite Rich people there are in the world, every single year Princess delivers around 280 vessels costing about £7m.
So there is some small scope for encouragement for the lottery winners. But impressive sports sponsorship is, alas, out of the question. Even if a Premiership club were for sale, you would need to spend £765.5m to replicate Manchester City’s current squad. Forget about motor-racing too: Mercedes-Benz and Ferrari have annual budgets of about $400m. Still, with £170m available, you could build a very competitive karting team.
By what cruel calculus does £170m not make you feel free? I fear the Lottery Winners will soon discover. I still advise tennis and lunch, but, additionally, read Thoreau, the hermit who believed you can count yourself rich by the things you can do without. And a $65m jet is likely one of them.
