There’s a comment that has stayed with me for a long time. It goes along the lines of if you’re earning $10 million a year then spending $10,000 is only the same as someone who earns $100,000 a year spending $100. It’s just relative. This often strikes me as I travel around different luxury locations. I’ve been in some hotel rooms that cost more than $1,000 a night. I can’t say I slept better. Equally, I travel some airlines for $50. I can’t say I fly better. It’s all relative.
However, nearly my whole life and those of the people around me, we’ve been constrained by cash. We cannot lavish on parties and presents we cannot afford. We have to live within our means. That means taking the budget airline, staying at the budget hotel, trimming the options and being as frugal as possible.
So, it really struck me that as the rich get richer, they get more eccentric. When you have no budget, when you can take all the options, when you don’t know what frugal means, you can do whatever you want. What was interesting for me to note here is that, in most of the lavish and rich locations I visit, it’s not the young that are there though. It’s often seriously old rich people. This struck me in a hotel that is so lavish, the staff don’t just jump when you say hello, but they do it in co-ordination. A bit like Riverdance ... but for hotel staff.
The average room in this place probably cost $1,000’s a night, and the average age was around 78 years. Well, for the men anyway. I think the female of the species fell into a slightly more youthful age bracket, except for the lady who had breakfast with a wooden cat every morning. Yep, you heard me, a wooden cat.
Now, I wouldn’t normally write about this stuff but, if your worth is in excess of $10 million, then spending $3,000 a night on a hotel room is only the same as the person who earns $100,000 spending $30 a night. And that’s where the relativity plays out.
There are almost 100 million people worldwide who have a net worth of over $10 million, and the figures skew more the higher and higher you go up the food chain. In fact, Bloomberg recently seemed to delight in looking at who the richest people are and published various stats that provide context:
Three individuals (Bill Gates, Jeff Bezos and Bernard Arnault) are now worth more than $100 billion each and 25 families control $1.4 trillion (<10% of size of US economy) @business seem to have a fascination with this https://t.co/wfGyFxPqZk
— Chris Skinner (@Chris_Skinner) August 18, 2019
So, it intrigues me that when you have wealth beyond any level needed that you can start looking at other stuff, like philanthropy. And this is another theme that has started to ripple through my reading, namely that giving is better than receiving. I’ve never heard this in business before. Business is all about making money, getting money, gaining returns and greed is good. Therefore, I’m going to pick up on greed is good themes versus doing good for society in a few posts in the future.
The first will be posted tomorrow. I trust you’ll bear with me.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...