9 Outrageous Ways the Rich Spend Their Money the Rest Of Us Could Only Dream About
“Rich People—They’re Just Like Us!” tabloid magazines assure us, and that’s true, at the mitochondrial level. Otherwise, F. Scott Fitzgerald got it right the first time: Rich people are not like the rest of us, and they’ve put a lot of stopgaps in place to make sure it stays that way. I don’t even mean the way they own 43 percent of the country’s wealth domestically and more than 40 percent globally, or how they control the political process, or even how they’ve managed to jigger the justice system so they can literally get away with murder, though those are all related points. I’m talking about the lifestyles and spending habits of the rich (and sometimes, but certainly not always, famous), which are a world—and many, many dollars—apart from the rest of us, just the way they like it.
So in “honor” of the .001 percent, who have not been honored nearly enough, here’s a list of what probably amounts to a mere .001 percent of the bajillion things rich people spend their money on that the rest of us simply can’t afford. The big-ticket items they favor run the gamut from kooky to enviable to evil. But the important thing here is, you can’t afford them.
1. Trophy “Wife Bonuses.” According to Wednesday Martin, who calls herself a “social researcher” and says she has studied “the lives of women from the Amazon basin to sororities at a Big Ten school,” “wife bonuses” are exactly what they sound like: large, earned, annual monetary payments from millionaire Manhattan husbands to their immaculately coiffed, hard-bodied, perfect child-rearing, gala-throwing wives. (Followup pieces in other sources seem to verify Martin’s claims—if perhaps not all of the details, the general idea—including this one, which quotes Manhattan lawyers for the very rich, and this one, by an Upper East-Sider wife who claims to be a bonafide wife bonus recipient.) Martin, who married a rich Upper East-Sider and relocated to the neighborhood to raise her children, claims to have assimilated into the UES’s “Glam SAHMs” (or “glamorous stay-at-home-moms”), and says she learned about wife bonuses from actual recipients. In a recent New York Times piece, Martin describes how a rich i-banker or hedge fund manager might reward his wife handsomely for “how well she managed the home budget [or] whether the kids got into a ‘good’ school.” The wives, most of whom Martin says have college degrees but have opted out of careers and thus have no outside income, gain some financial independence, while the husband gets a picture-perfect family. Everybody wins, especially sexism and the 1950s.
2. Hunting endangered animals. In January 2014, the Dallas Safari Club, a “hunters’ rights” organization, auctioned off a permit allowing its holder to travel to Namibia for the chance to kill a black rhino, less than 5,000 of which currently walk this Earth. Oil heir and Texas hunter Corey Knowlton bid $350,000 to win the prize, and this May made the promised kill. He’s just one of several very rich hunters who’ve made the news for doing what they love: murdering beautiful, exotic animals that are in very short supply. A couple of years ago, pictures began floating around the Internet depicting Donald Trump’s sons Eric and Donald Jr. posing with their own lifeless bounties, including a leopard, a buffalo and an elephant, the severed tail of which young Don Jr. holds, alongside a bowie knife, in his hand.
There has been outrage around each of these cases, but the most unwanted notoriety was thrust upon Rebecca Francis, who previously hosted a show on NBC called “Eye of the Hunter.” Francis’s website is a showcase of her kills, but it was a photo of Francis lying next to a giraffe she had slaughtered that caught the eye of Ricky Gervais. The comedian tweeted the photo, along with the message, "What must've happened to you in your life to make you want to kill a beautiful animal & then lie next to it smiling?" What followed were several thousand retweets, threats upon Francis’s life, and the question of whether Francis was being targeted because of sexism toward women hunters. (In response, Gervais tweeted: “We need to stamp out this terrible sexism in the noble sport of trophy hunting. The men & women that do it are EQUALLY vile & worthless.) For her part, Francis—much like Knowlton, the Trumps and other hunters of exotic wildlife—defends herself as a “conservationist,” claiming she kills ailing, troublesome animals and that the money for licenses goes to preservationist efforts. In other words, we—the absurdly rich “we,” anyway—have to kill endangered species so they can live. Yeah, I know—it doesn’t make sense to me, either.
3. Buying up private islands. I’ll be the first to admit that if I had the money to buy an island paradise of my own, I’d be on that, STAT. There are plenty of titan-of-industry billionaires and comparatively pauper celebrity millionaires who have invested in beautiful remote islands. Too many to list here, but here’s a quick rundown: Johnny Depp has a place in the Bahamas called Little Hall’s Pond; Celine Dion owns ÃŽle Gagnon off Quebec; Eddie Murphy owns the Bahamian island Rooster Cay; billionaire Larry Ellison owns 98 percent of Lanai, the sixth largest Hawaiian island. Sir Richard Branson bought Necker Island, in the British Virgin Islands, for a paltry $180,000 back in 1979. Today, if you’d like to rent out the island—its tennis courts, pools and staff of 60 are part of the package—it will run you about $64,000 a night. Ted Turner has owned St. Phillips Island, off the coast of South Carolina, since 1979. (Though word is he’s been unsuccessfully trying to dump that thing for years, even slashing the price to $24.8 million.) Leonardo DiCaprio, in partnership with another investor, purchased a Belizean plot they dubbed “Blackadore Caye, a Restorative Island,” where they plan to open a luxury “eco-conscious resort.” Mel Gibson owns an island off Fiji called Mago Island, which sounds about right, since all the brown people were displaced from there in the 1860s.
But the prize may have to go to Sheikh Hamad bin Hamdan Al Nahyan, of the Abu Dhabi royal family, owner of a little island named Al Futaisi. In 2011, Hamad had his surname carved into the sand of the island in letters so large they could be seen from space (Forbes measured them at “two miles across and half a mile wide”). And then, for reasons unknown, in 2013, he had them filled in again. Rich and bored, I guess.
4. Creating their own special healthcare system. Healthcare, and the appalling lack of it, is always a national conversation in a country where the adherents of one party actually applaud the idea of letting people without insurance die. And surely none of us are surprised to learn that, even as the rate of the uninsured has fallen somewhat in the U.S., richer Americans still get the best healthcare and live longer lives. This point is driven home by articles like a 2012 New York Times piece that described luxury hospital services provided those who could pay for rooms that cost up to thousands of dollars a day. These louche offerings include “the ultimate in pampering,” from lobster tails to “concierges [who] act like butlers.” Then there’s actual concierge medical care, which entails paying as much as $30,000 a year for access to a doctor who makes house calls anytime you need. And for the very wealthy, there's the option of having their own onsite emergency room, complete with all the technology found in an actual hospital. (A Bloomberg piece cites a company that “installs its so-called ReadyRooms in homes, yachts and planes, and can equip them with X-ray machines, CT scanners, ultrasounds and blood-analysis.”) These run about about $1 million, and can probably be built between our home movie theater and private bowling alley.
5. Buying art at absurd prices and destroying the art market for everyone else. The rich have always had a soft spot for art, going back to the Medicis. But in today’s art market, patronage has taken on a new form that might be considered a variety of vulturism. This is an era in which art appreciation is incidental to art collecting; what many of the world’s top art purchasers see when they gaze at a new work is the potential for endless return on investment. No one’s arguing that the work of the most well-known artists hasn’t always been out of financial reach to anyone but the upper classes. But today, for many rich collectors, art has become a signifier of wealth, a commodity to be flipped to make yet more money.
At just two New York art sales in 2013, the Warhols, Bacons and Freuds went for unprecedented prices in the double and triple millions, adding up to a combined take of more than $1 billion. That same year, sales of art around the globe increased 8 percent over one year prior, hitting $65.9 billion, a figure driven in huge part by millionaires and billionaires. In 2011, Artnet AG discovered that over the last decade, works by Warhol and Damien Hirst have outpaced the Standard & Poor’s 500 Index, which explains why so many rich people consider art a more reliable investment than the stock market. When Forbes put out its 400 Richest People in 2014, many on the list were also some of the world’s best-known collectors of art, with Walmart heiress Alice Walton at #8, hedge funder Steve Cohen at #32 and CondÃ© Nast owner and media titan S.I. Newhouse at #38, to name just a few.
6. Space Tourism. The first civilian millionaire to buy a trip into space was Dennis Tito, an American engineer who in 2001 famously paid $20 million to spend eight days orbiting the Earth aboard the Russian spaceship Soyuz. Since then, space tourism has gotten much more affordable, with ticket prices falling to bargain basement prices of $250,000, though there's one teeny tiny catch: the companies offering the journeys have yet to make their maiden voyages; they’re all still in the test flight stage. You see, while the just-rich will pay to travel into space, the richest-of-all have discovered the real money is in owning their very own space travel companies. A handful of billionaires have already gotten into the biz, including Elon Musk, CEO of Tesla Motors, who owns Space X; Microsoft co-founder Paul Allen, the proprietor of Stratolaunch Systems; Amazon founder and CEO Jeff Bezos, the man behind Blue Origin; and Sir Richard Branson, who owns pretty much everything ever, including Virgin Galactic.
Last October, Branson’s venture experienced a tragedy when a test flight of its SpaceShipTwo rocket ended with the death of the pilot and serious injuries to the co-pilot. The accident prompted calls for the end of space tourism, with Wired calling it “a millionaire boondoggle thrill ride.” But Virgin has forged on, and some of the most prominent of its 700 ticket holders (a group that includes Lady Gaga, Ashton Kutcher, Leonardo DiCaprio, Justin Bieber, Katy Perry, Tom Hanks, Angelina Jolie, Brad Pitt and Lance Bass) have stepped up to offer public support and enthusiasm. For a look at how the (incredibly short) journey into space is projected to look, check out Blue Origin’s animated video.
7. Trying to live forever. It’s a myth that Walt Disney was cryogenically frozen; the Cryonics Society of California claims he was very interested in the process, but his “family didn’t go for it.” Today, several super-rich types are investing heavily in cryonics, as well as other life-extending measures. Canadian electronics billionaire Robert Miller and American hotel and casino billionaire Don Laughlin have both poured tons of support money into Alcor, which bills itself as the “world leader in cryonics.” If everything works out for these two, at the point of death, their body temperatures will be lowered to somewhere below -120° C (that’s -248° F) in a process called “vitrification” until the cure for what ailed them is discovered and they can be revived, or something like that. (They’re also planning to have most of their assets frozen, because what’s the point of bothering to live if you’re poor?) Russian tech billionaire Dmitry Itskov launched the 2045 Initiative, which sounds about as bizarro as one might hope a billionaire’s plans for immortality would. Fortune describes the project as such:
“A new corporate entity that...will allow investors to bankroll research into neuroscience and human consciousness with the ultimate goal of transferring human minds into robots, extending human life indefinitely. Early investors will be first in line for the technology when it matures, something Itskov believes will happen in the 2040s.”
And billionaire David Murdock—who has the less ambitious goal of merely living to 125—founded the North Carolina Research Campus, a $500 million effort to figure out how plants can stave off disease and extend life.
8. Secretly planning their escape from civil uprisings by the angry non-rich. The .001 percent have noticed that people have been speaking about them in less than flattering terms over the past few years, and it’s making them a little nervous. Civil unrest around the world, from Occupy to Ferguson to the Arab Spring, has them making plans to ensure that if the ish really hits the fan, there’s a quick and easy way to get out of Dodge. Early this year, at the World Economic Forum, Robert Johnson, who is head of the Institute of New Economic Thinking—and an ex-hedge fund manager, so he likely knows whence he speaks—told a crowd that the super-rich were secretly buying up boltholes in anticipation of angry uprisings in response to things like growing income inequality. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he reportedly told the audience. So remember everyone: If the revolution starts, make a beeline for the New Zealand countryside.
9. Donating crazy amounts to colleges so their kids can go to the schools of their choice. I know plenty of people, with both rich parents and without, who went to “fancy” colleges and are genuine brainiacs who worked hard, so this is no across-the-board diss. But it’s long been a pretty open secret that donating enough for a new wing or establishing a scholarship at a university can do wonders for your kid’s admissions chances. Schools actively deny this, but if you’re trying to get into an exclusive school, being a legacy or having well-connected parents with deep pockets who give hefty amounts ups your chances of entry. There are lots of anecdotal, and even some presidential, cases (hello Bush Jr.!).
One example came to light earlier this year as a result of the Sony email leak, thanks to the eagle eyed London Review of Books blog, which spotted correspondence between Sony Pictures CEO Michael Lynton and Brown University. Lynton’s daughter was interested in attending the Ivy, and the CEO contributed hugely to the school, earning his daughter the kind of treatment few potential candidates receive, including visits with the college president, specially tailored tours and extra attention given to her application. The blog sums up the exchanges:
In 2014, [Sony Pictures CEO Michael Lynton] emailed [Brown’s] vice-president of philanthropy: he’d like to endow a scholarship, anonymously, ‘at the $1mm level.’ In another email, he tells a development officer that his daughter is applying to the college as her first choice. It’s all very decorous. The development staff arrange a ‘customised’ campus tour for his daughter and a meeting with the university’s president; but he asks for no favours and nothing is promised. An email from the president says that his daughter’s application will be looked at ‘very closely’. She gets in. He writes to his sister: ‘David… called me. he is obsessed with getting his eldest in Harvard next year.’ She replies: ‘If David wants to get his daughter in he should obviously start giving money.’ Obviously.
Robert Reich noted in a column last year that these kinds of donations to already well-endowed schools have special repercussions for non-rich taxpayers. Reich writes: “Government subsidies to elite private universities take the form of tax deductions for people who make charitable contributions to them. In economic terms a tax deduction is the same as government spending. It has to be made up by other taxpayers.”
So rich schools keep getting richer, just like the rich people who donate to them. Reich offers more insights:
Private university endowments are now around $550 billion, centered in a handful of prestigious institutions. Harvard’s endowment is over $32 billion, followed by Yale at $20.8 billion, Stanford at $18.6 billion, and Princeton at $18.2 billion. Each of these endowments increased last year by more than $1 billion, and these universities are actively seeking additional support. Last year Harvard launched a capital campaign for another $6.5 billion.
Because of the charitable tax deduction, the amount of government subsidy to these institutions in the form of tax deductions is about one out of every three dollars contributed.
Your tax dollars at work.