The Jet Set's Shopping List Unmasked
How do the very wealthy spend their money? You may not want to know.
By Thomas Kostigen
Private jet owners have an average annual income of $9.2 million and a net worth of $89.3 million. They are 57 years old. And 70 percent of them are men.
Hannah Shaw Grove and Russ Alan Prince, two researchers, surveyed the group to find out who they are, what makes them tick, and perhaps most interestingly, what they spend their money on.
The average jet setter spends nearly $30,000 per year on alcohol (wines & spirits). Grove and Prince note that this amount is about two-thirds of the median household income in the U.S. And that's the smallest category of spending they surveyed.
The next smallest was "experiential travel," which includes guided tours, such as photographic safaris, or hikes to Machu Picchu, or eco-tours to the Brazilian rainforest, or kayaking in Baja California during the gray whale migration. For these experiences, jet setters spend an average of $98,000 per year.
But these journeys are small potatoes when compared to how much these wealthy individuals spend on hotels and resorts ($157,000 a year), or events at hotels and resorts ($224,000 a year). Spa treatments even fetch more jet-set dollars than wilderness tours. The average jet setter spends $107,000 a year at spas around the world.
Not that many of these "global citizens," as they like to be called, would know: Just 34 percent of jet owners open their own mail and only 19 percent pay their own bills, Grove and Prince found. This results in a sort of detachment from the world and creates "the low level of awareness that most jet owners have about their finances," they say.
Indeed, it would take a curious psychological composition to comprehend spending $147,000 a year on watches, as the jet set do. Or $117,000 on clothes. Or a whopping $248,000 a year on jewelry.
These people need serious help with their...finances. And that is partially why Grove and Prince conducted the survey -- as a note to advisers who might be able to help people with complex money issues.
Getting Good Help
"Any way you slice it, private jet owners are an ultra-affluent bunch and, as such, likely have intricate financial requirements. As is often the case, there is a proportionate relationship between the amount of wealth and the complexity of the financial goals, meaning there is a greater need for a professional adviser to guide them through the planning process and supply them with strategies and experts to meet their goals along the way," they say.
Whatever. I'm far more interested in how much the super rich spend on cars ($226,000 per year), and boats ($404,000 a year on yacht rentals).
I'm even more interested to know what the $542,000 a year in home improvements was spent on. Grove and Prince say the average jet setter has more than two principal residences worth at least $2 million each. New kitchens? Kick ass sound systems? They don't inform.
But they do tell us that jet-setters spend the most amount of money on art, $1.75 million a year on average. It's also here that the spending patterns differ by the classes within the classes that Grove and Prince unearthed by analyzing the jet-set pack.
Trendsetters spend the most as group, but the least amount per purchase. Last year, 60 percent of this group bought art, at an average price of $500,000. Trendsetters are influenced by magazines, television and movies, Grove and Prince say.
Connoisseurs, on the other hand, spend on average more than $6 million per piece, yet are cautious purchasers: less than 10 percent of this class bought art last year.
I'm not sure which of the three personality types Grove and Prince defined among jet setters I'd fall into: Trendsetters are more likely to be impulse buyers; Winners reward themselves and those in their inner circle with large purchases for personal and professional accomplishments; and Connoisseurs are deliberate in their purchasing behavior and thoroughly research all aspects of a category, and a particular item, before making a decision.
Not that it much matters. I'd just like to be able to afford to spend $168,000 a year renting a villa or chalet, as the jet set do.
It'd be fun.
For the full report on how the jet set spend their money, go to www.hannahgrove.com and go to "white papers" in the publications section.