How do you make a lot of money in this kind of finance-driven economy? Simple. You sell things to rich people. Those who make the most are the financial hustlers – who have figured out that rich people are no smarter than poor people. The poor sign up for teaser-rate ARMs…the rich sign up for 2 & 20 hedge funds.
Short of going into finance, there are other ways of separating the rich from their money. Among the most profitable is the luxury goods market. Swatch – owner of luxury watch brands Breguet and Blancpain – is up 38% this year. Lamborghini has a new limited-edition sports car that sells for US$1.4 million, the most expensive car ever manufactured. All 20 of its first run sold out.
Today’s International Herald Tribune brings a two-page spread on the Monaco Yacht Show. “More billionaires, more Russians, bigger yachts and the same Mediterranean,” is how it sums up the situation. Articles feature private jets, watches…and of course, huge “mega-yachts”. An ad shows a beautiful young woman wearing a diamond pendant so large she has to peak around it.
But don’t get the idea that the rich, in their desire for very-conspicuous consumption, don’t care about the poor. There is an auction of watches later this week in Monaco, for the benefit of a local charity. The show’s director explains why:
“People living at the high end of society may seem detached and remote from the real world, but they are connected. They have visibility through their wealth and they are using it in socially responsible ways.”
Markets and Money