uhnwi

It seems that in order to acquire great beauty in one’s life we have to ‘work hard’ and then ‘spend hard’. I was reminded of this when I finally got time to catch up on some reading this week.

In April, this year, I picked up a copy of the Robb Report magazine whilst in Miami. It came with a supplement that covered Green Transport - Specifically cars and motorbikes.

Having enjoyed various Ferrari’s in the past I read with interest the article on Page 16 that discussed the Bio Fuel version of the F430 Spider. Apart from the performance gains through running the car on E85 (85% Ethanol, and 15% Petrol) the thing that amazed was the fact that even though the Petrol used was down to 15% the CO2 emissions only dropped by 5% (hence the title of this blog).

It could be argued that the gains are good all around; Lower CO2 – better performance – more torque. I just wonder how the world would change if we all used biofuel.

Perhaps it’s time to invest in these alternative fuel companies.

The evidence is that with the global slowdown, which has stemmed from the increase in oil prices and the credit crunch, Ultra High Net Worth Individuals are better placed than ever to take advantages of any opportunities.

Lower property prices are leading to new, previously unavailable, investment scenarios. This is just one area of potential wealth gain. Others are;

• Lower stock prices are leading to an impressive gain in share ownership
• Increases in the value of gold is giving a better return on previous investments

Companies that offer products and services to the Ultra Wealthy are also gaining at this time. As the markets polarise the wealthy are choosing to upgrade. The luxury yacht, car, and aircraft industries are all reporting growth in their high end products whilst middle range items stagnate.

Recessions’ also lead to the removal of the fat from the system. Investment channels become more direct; confusion is removed, and wealth creation becomes clearer.

Now is the time for us to consolidate our positions and snap up those bargains.

Recently I was invited to view the Rolls-Royce Phantom Drophead Coupe.

Although the saloon is an impressive feat of engineering and luxury I always felt that the marque would benifit from a convertable edition.

What Rolls-Royce have achieved is nothing short of spectacular. From the brushed aluminium bonnet and windscreen surround to the teak hood cover that echos the Riva speadboats of old. They even managed to provide the trusty teflon coated umberellas inside the front doors.

In SoBe, Miami recently I even spotted a soloon with custom alloy wheels. Although it looked good it would have been even better if it was a Drophead Coupe.

Well worth the extra £50k.

Wealth brings us many things; excitement, purpose, and of course Luxury.

But what does luxury mean? For the proletariat it might mean a good meal or a day off work.

For the wealthy it means space. Space to move. Space to think. Time is just the space between two points.

More wealth equals more space; and not just in the size of our residences. What I am getting at here is that to be wealthy means that there are fewer obstructions in ones life.

For example, let’s take the subject of travel.

The common man drives to the airport, parks, queues at check-in, queues for their dinner, waits to board the plan, waits to take their seat, waits for their meal etc. etc.

The wealthy person is chauffeured to their private airport, walks from the car to the aircraft and boards, is attended to immediately (champagne, food, whatever). As the saying goes;

They don’t have to lift a finger

The difference; more space and more time and less obstruction in their lives.

This is real luxury; the ability to move about the world with as little obstruction possible. To have things smoothed over and pre-prepared. To have things taken care of allowing for more wealth generation.

This is real luxury.

According to research by Merrill Lynch and Capgemini the rich spend 10 percent of their money on ‘investments of passion’. The biggest part of this spend goes on so called ‘Luxury Collectables’ such as cars, boats, and jets.

These ‘investments’ are often far from it. They depreciate in value, require expensive maintenance, and very soon after purchase something else is more tempting.

Do we ‘collect’? - Of course. We all need a little fun and beauty in our lives.

Sometimes it’s good to take a break from wealth building and look at the tools used in the process.

Recently Apple Inc. released its new Macbook Air laptop computer. Much has been written about this in recent days focusing on its small size and light weight.

Here we will focus on the benefits for the Ultra Wealthy.

Firstly the laptop needs to be setup via your PA or IT team. What we mean by that is your essential applications are loaded and, more importantly these days, your bookmarks are added to the Safari web browser. Any essential email accounts also need to be added.

Also essential is the Magsafe airline adapter that lets you charge your laptop from an aircraft socket (although good first class cabins and private jets will have these).

Wealth building and maintenance rely on personal contact and information.

The Ultra Wealthy are more mobile than the general population. Travelling between countries either for business or pleasure (often both) means that being able to work as easily as possible is of prime importance. This is where the Macbook Air’s strengths become evident. It’s easy to carry, switches on instantly when opening the lid, and is stylishly discreet. This makes it easier to check investments and catch up on market information.

The other advantage with Apple computers is the inherent security of the operating system.

We have already used a Macbook Air to make money and have enjoyed the experience immensely.

Ultra High Net Worth Individuals exploit the idea behind Compounding Wealth. Compounding wealth is a term I use for an investment that provides a return that, given time, multiplies greatly. It is the ability of reinvested returns on an investment to generate their own returns.

As the chart below shows, if you start out with an income generating investment of $1,000,000 and an annual return of 10% then at the end of seven years, with compounding, your investment would be worth $1,948,717 or nearly DOUBLE.

10% is a good return but with more risk the return could be even higher.

Although Compounding is associated with interest paid on capital over a period of time it can also apply to returns on ANY investment as long as the principal and the return are not touched and carried over to the next investment period.

As an example, a property investment of $1m could grow to $1.1m in a year (less charges). The property could then be sold and the whole $1.1m invested in another property related investment (or something else). In year 2, at the same growth rate, the investment would grow to $1.21m.

Using compounding wealth means you can become a lot richer a lot quicker.

There is a segment of the car market referred to as Ultra Luxury. Automobiles in this segment are sold for in excess of $100,000.

Long established luxury brands such as Rolls Royce, Bentley, Maybach, Aston Martin, and Maserati are to be found here. Many of these brands are owned by German car makers such as BMW and VW.

UHNWI’s have on average 8 cars which means they have invested around one million dollars. This is a conservative estimate as these luxury brands cost well in excess of the starting $100k.

Many UHNWI’s own high performance sports cars like Ferrari, Porsche, and Lamborghini as well as their saloons.

Some high end Super Luxury Motor Yachts have a section in the stern to carry a vehicle and one maker even includes a Rolls Royce Phantom in the price.

Understated Elegance; that’s what this watch is all about.

Retailing for about $340,000 this manually wound minute repeater is the height of discretion. A simple face shows hours and minutes and the watch has a 34 hour power reserve when fully wound.

The mechanical minute repeater is said to have been designed by Vacheron Constantin for Napoleon so that the Emperor could check the time on the battlefield without getting shot.

Not convinced? You could always spend you hard earned wealth on this Jacob watch (favoured by Rappers) …

Give me understated elegance any day.

The Vertu Ascent’s design is characterised by accelerated lines and form, inspired by high performance luxury cars.

It has been developed to complement the Vertu Signature Collection, and introduce the Vertu experience to a wider audience.

The design of the Vertu Ascent is a unique contrast of hardwearing materials - stainless steel, ceramic, sapphire crystal and Liquidmetal® alloy - and hand-stitched brown and black leather. Precision-engineered stainless steel keys, set on jewelled bearings create a unique pivoting action each time the key is pressed.

The custom-developed Liquidmetal alloy featured in the design of the Vertu Ascent provides exceptional durability and scratch-resistance. This is the first time this unique material has been used in a mobile communications product. Other Liquidmetal alloys are used in high performance industries such as sporting and aerospace.

Frank Nuovo, creative director and designer for Vertu says, “Inspired by the design and materials of luxury sports cars, the Vertu Ascent Collection strikes a unique balance between hard metal and soft leather. I am delighted to bring this second stylistic expression to individuals who demand the best in everything they buy.”

The Vertu Ascent is designed and built to the same exacting standards of craftsmanship as Vertu’s hallmark Signature Collection. Vertu Ascent has a discreetly positioned, dedicated side key allowing clients to connect to the Vertu Concierge service. This team of specialist global advisers is available 24 hours a day, 365 days a year in over 170 countries worldwide and provides the best travel, entertainment and international assistance at the touch of a button.

Vertu, the world’s first luxury mobile phone company, launched in January 2002, is extending its range of luxury mobile phones and accessories with the Vertu Ascent. Available in black and brown leather, the Vertu Ascent can be accessorised with a custom designed black leather holster. The Vertu Ascent and its complementary accessories are available at Vertu Stores in Paris and Singapore, Vertu Client Suites in Hong Kong and Singapore, and in the world’s finest jewellery and department stores.

via vertu.com