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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

Hand crafted by Jean-Marc Daucourt in the Cognac region of France, Jean-Marc XO Vodka marries cutting edge French spirits and winemaking techniques to create an extraordinary Vodka possessing a floral bouquet, complex & elegant wheat flavors, a silky texture and very long finish.

* Jean-Marc XO Vodka is distilled nine times in very small batches using traditional French copper Alambic stills. The entire process takes several weeks from start to finish.

* Jean-Marc Daucourt selected four particular French wheat grains for their delicate and harmonious flavors. They are called Ysengrain, Orvantis, Azteque, and Chargeur. Each wheat grain is separated from its chaff before distillation in order to eliminate any bitterness and reveal the wheat varietal’s flavor.

* Jean-Marc XO uses only pure Gensac spring water from the Cognac area, filtered naturally for centuries through Grande Champagne limestone.

* To create as pure and natural a spirit as possible, Jean-Marc XO is micro-oxygenated just after distillation. This innovative technique was borrowed from First Growth winemakers in nearby Bordeaux.

* To finish, Jean-Marc XO Vodka is charcoal-filtered through Limousin oak, using special Daucourt family techniques learned over generations of spirits-making.

To best enjoy Jean-Marc XO Vodka, serve it shaken in a very dry martini, on the rocks, or neat in a Cognac glass.

Compare Jean-Marc XO to your favorite ultra premium vodka…you will immediately appreciate the difference that Jean-Marc’s hand craftsmanship makes.

via: http://www.jmxo.com

Picture via Car Magazine.

At a charity auction in Florida a record price was paid for the first Rolls-Royce Phantom Drophead Coupe. The Phantom went for an impressive $2 Million Dollars [the highest bid in the auctions history].

The bulk of the money [$1.6 Million] will go to the Naples Children and Education Foundation.

1. Definition

Ultra High Net Worth Individuals are said to have over $50 Million in invested assets. Put another way; these assets, if liquidated, would produce a cash amount of over $50 Million. This differs from High Net Worth Individuals who are said to have liquid assets to a value of $1 Million.

UHNWIs have, on average, eight cars and three or four homes. Three-quarters own a jet aircraft and most have a yacht.

2. How many are there?

Rolls Royce Motor Cars have carried out research that suggests that world-wide there are 80,000 Ultra High Net Worth Individuals; a number that is growing all the time.

3. Income

See my previous story here

4. Spending Their Money

When the Ultra Wealthy spend their money it is on the following;

• Property
• Jets
• Wine
• Jewellery and Watches
• Yachts
• Cars

Many of these actually appreciate in value over time.

When the wealthy have to buy many other things they use websites like www.slwn.com which offers links to many products and service.

One of the secrets of the wealthy is passive income. When they invest in anything it is with a view to generating passive income. Once this income stream is set up it requires little or no effort.

An example might be an investment in property. Once management charges are subtracted the investor receives a regular income without any further effort. The more of these types of investment the greater the levels of passive income received and the wealthier the individual becomes.

High net worth individuals like to own the things that appreciate in value [assets] and are easy to maintain and rent everything else [liabilities].

In practice this means that if a possession ‘earns its keep’ it is ‘owned’ otherwise it would be hired or rented.

Typical Assets would be;

• Property
• Gold
• Racehorses
• Super Yachts

Typical Liabilities are;

• Cars
• Electronics

We are in the process of sourcing some exciting content applicable to High Net Worth Individuals. Please come back soon.