In his fascinating book, Richistan, Robert Frank delves into the lives of the new rich and how they spend their fortunes. Frank fashions Richistan as a completely different country populated entire by millionaires who acquired their wealth during their own lifetimes – timber kings, fund managers and eccentric entrepreneurs, but no “old money”.
While he also talks in depth about the nouveau riche’s social ambitions and the psychological stress caused by “keeping up with the Joneses”, one of the most intriguing parts of the book involves the “I can’t possibly spend it all” mentality, which leaks into their lavish spending habits.
Let’s take a look at some typical Richistani annual expenses…
$50 Million Net Worth
Gardening/pools maintenance - $140,000
Charities - $500,000
Restaurant/bars - $60,000
Cars - $300,000
Beauty salon/spa - $27,000
Clothing - $30,000
Club memberships - $225,000
Political contributions - $61,000
$80 Million Net Worth
House staff and personal assistants - $315,000
Gardening/pools maintenance - $146,000
Home furnishing and appliances - $93,000
Household supplies - $43,500
Travel - $500,000
$1.2 Billion Net Worth
Real estate taxes - $900,000
House staff and personal assistants - $2,200,000
Charity/philanthropic events - $3,000,000
Restaurant/bars - $250,000
Cars - $1,000,000
Beauty salon/spa - $200,000
Clothing - $300,000
Club memberships - $500,000
Entertaining (at home) - $2,000,000
Frank points out that this massive amount of spending has a trickle-down effect on the economy. He gives a story of a stonemason who was able to purchase a Ferrari because he had been building tons of stone walls for hedge fund managers.
Financial columnist Dan Gross calculated that the top 1% of earners in New York City support over 150,000 jobs. If a mega-rich fund manager spends $1 million on services (like a driver, house staff, etc.), he could support around 25 livelihoods.
What do you think about the spending habits of the ultra-rich? Let me know in the comments!
Let’s take a look at some typical Richistani annual expenses…
$50 Million Net Worth
Gardening/pools maintenance - $140,000
Charities - $500,000
Restaurant/bars - $60,000
Cars - $300,000
Beauty salon/spa - $27,000
Clothing - $30,000
Club memberships - $225,000
Political contributions - $61,000
$80 Million Net Worth
House staff and personal assistants - $315,000
Gardening/pools maintenance - $146,000
Home furnishing and appliances - $93,000
Household supplies - $43,500
Travel - $500,000
$1.2 Billion Net Worth
Real estate taxes - $900,000
House staff and personal assistants - $2,200,000
Charity/philanthropic events - $3,000,000
Restaurant/bars - $250,000
Cars - $1,000,000
Beauty salon/spa - $200,000
Clothing - $300,000
Club memberships - $500,000
Entertaining (at home) - $2,000,000
Frank points out that this massive amount of spending has a trickle-down effect on the economy. He gives a story of a stonemason who was able to purchase a Ferrari because he had been building tons of stone walls for hedge fund managers.
Financial columnist Dan Gross calculated that the top 1% of earners in New York City support over 150,000 jobs. If a mega-rich fund manager spends $1 million on services (like a driver, house staff, etc.), he could support around 25 livelihoods.
What do you think about the spending habits of the ultra-rich? Let me know in the comments!