Here's How Bored Rich People Are Spending Their Extra Cash

https://www.nytimes.com/2021/03/20/style/spending-rich-people.html

by pseudolus • 5 years ago

48 89 5 years ago

nytimes.com

EdwardDiego• 5 years ago

Well that explains the NFTs.

cheschire• 5 years ago

https://archive.is/bCArS

cryptica2• 5 years ago

They made a lot of money thanks to an entirely artificial fiat monetary scheme (which is nothing more charity for the socially connected). Then they refuse to pay it forward by investing in useful, transformational projects... Instead preferring to launder the money among themselves as a means of wealth preservation. Wealth which they don't deserve to begin with.

op03• 5 years ago

More like there are no useful transformational projects that everyone agrees on. So different groups do what they got to do. Just try an experiment with you own family. Find the richest members and get them to buy into "useful transformational projects". Come back and tell us how that goes.

imtringued2• 5 years ago

Easy, real estate. Just build more housing. The idea that we have run out of things to do is laughable. The truth is all the profitable investments are illegal.

OminousWeapons• 5 years ago

Stand up a useful, transformative project and I'm sure there will be no shortage of people looking to invest...

donmcronald10• 5 years ago

I vote for eradicating food insecurity in the USA. That would be pretty transformative IMO. How many ultra wealthy investors do you think will get on board?

imtringued2• 5 years ago

Exactly, if inflation arrives and the Fed were to raise interest rates, all that fake wealth would disappear. The problem is that the fake wealth is a big chunk of the economy so the Fed will not raise rates.

donmcronald10• 5 years ago

The government printed a ton of money and stuffed it into rich peoples’ pockets, so it’s not shocking for the value of luxury goods to sky rocket. We’re seeing stock market inflation because that’s where rich people park their extra money and they were the injection point for all the money that got magicked into existence this last year.

I’m sure it’s awesome for a lot of people in HN that have seen massive market gains in the last year, but it freaks me out. I worry about my parents who are very close to retirement since they’re the tail end of the last generation that had defined benefit pension plans. They’re not indexed at rates that can withstand a ton of inflation.

Are wages going to increase when the inflation starts to trickle down to the goods and services the working class rely on?

chii• 5 years ago

stuffed it into rich peoples’ pockets

They did no such thing. Most money being "printed" is used as a swap for bonds held privately in banks, and that makes banks more willing to lend out money. So a lowered interest rate makes it more profitable to invest in stocks, and kept the financial system liquid enough to not collapse.

Then the gov't borrowed a bunch of money to send to all the low income people (the $1200 stimulus cheque), which is the opposite of stuffing it into rich people's pockets.

Are wages going to increase when the inflation starts to trickle down to the goods and services

it's more likely that wage increases would trigger said inflation, rather than the other way around.

aphextron• 5 years ago

"and that makes banks more willing to lend out money"

And who, exactly, do you think they're lending that zero interest money to? People and businesses with collateral, i.e. the wealthy.

Guest422• 5 years ago

I’m aware of a business owner that was given 200k and said that they easily could’ve gotten more. They had to ask for it quickly so it wasn’t quite “stuffed” into their pockets but the impression I get is that the larger businesses had an even easier time.

donmcronald10• 5 years ago

I thought the US printed something like 3 trillion dollars last year. How much do the $1200 cheques add up to? 200-400 billion? And the ultra rich gained 2 trillion in wealth over the same period.

It sure seems like someone gave the rich a big bag of money to me.

purple_ferret• 5 years ago

Then the gov't borrowed a bunch of money to send to all the low income people (the $1200 stimulus cheque

The government gave all owners of labor up to $22,000 per employee. If you were a partner at a law firm making $500,000, you qualified for a $22,000 check right from the government because, as a partner, you're technically paying yourself.

There were also tax changes in the 1st bill that benefited the wealthy.

nprz• 5 years ago

The stimulus checks could have come from taxing the wealthy, they did not. They came in the form of money printing which will eventually result in inflation, and will disproportionately effect the less well off who hold their money in cash and do not know how to protect their wealth from said inflation.

forgotmypw172• 5 years ago

This is how inflation takes effect, first investment instruments, then luxury goods, then basic goods, then rent, and finally, wages. Basically, from closest to the money source and spreading out.

donmcronald10• 5 years ago

So for anyone who missed out on the investment side, is there any way to mitigate it? Do you borrow money at a fixed rate and invest it in markets that provide basic goods and supply constrained resources?

mbg721• 5 years ago

Is it unusual for it to take this long to move through the chain after it's noticed?

zemvpferreira11• 5 years ago

No wonder so many people are eager to bring out the pitchforks. Is this the behaviour we expect from our most successful? Is this what we'd do ourselves with money? Are you bored and rich? Go play in the sand. Go feed the homeless. Make a damn chair out of scrap wood.

Is this level of idiotic consumption and speculation even widespread amongst the rich, or do we glorify a pompous minority in the media as fantasy for poor people?

I grew up with money. From day one my mother berated me for turning on more lights than I needed in the house, or wasting the last bit of butter on the packet. Our cars were always economy models and I drive a 17 year old car right now - fully bought and paid for by my dad 17 years ago for $15K. It's not a "beater". Why would I invest wealth-creating money on a depreciating asset to replace a perfectly good tool? I would never dream of spending over $100 on a pair of shoes, and they better last forever. My luxuries are working less hours, eating more takeout than I should, treating people to small gifts and spending money on gas to go to the beach.

All of this conspicuous consumption just feels like people who should know better are being taken for a ride. I'll make an exception for people like baseball-card-man who are taking others for the ride, he's just an opportunist. But I can't read about it all without feeling disgust at the lifestyle being sold to us readers. Skip the new BMW, save your money and put it towards anything that will make you free and do some good for the world.

vimy• 5 years ago

Why do you care what someone else does with their money? This should only bother you if the economy is a zero sum game. It’s not.

fallingfrog• 5 years ago

It is a zero sum game over short timescales. Over long timescales the situation is actually worse since the more money you have, the more you can make. So whoever starts with a small advantage ends up with a huge advantage, and whoever starts out behind might fall into poverty and end up with nothing. Wealth redistribution of various kinds- governmental and otherwise- is all that keeps the system stable at all.

zemvpferreira11• 5 years ago

You're right, it bothers me more than it should, maybe as an allergic reaction. I want to inoculate myself against this behaviour.

I've never berated anyone for spending their money, mind you, and hopefully I never do. But I can feel the pull of this behaviour on aggregate. I get snide comments half the times I go surfing on my car or my board from people wit literally ten times less yearly income than me who blow it all on leasing new Mercedes station wagons every 3 years. Going to dinner with some friends feels like a game of who can blow the most money nonchalantly. No thanks.

I don't how your part of the world is, but living in Lisbon in your mid-30s you can feel how people are spreading themselves thin financially to keep up with the Joneses. I've started taking a public posture against it because I feel someone has to. I've seen this movie play out and it ended with a lot of people giving their homes back to the bank.

adamnemecek2• 5 years ago

The economy is a sum of its parts. Like the money could be spent in ways that are more impactful.

commandlinefan• 5 years ago

In fact, if the people with money are spending it, that’s GOOD for the economy and benefits you and I more than if they’re just sitting on it.

Damogran66• 5 years ago

The problem is that it doesn't convey the subtlety that occurs when your income starts to drastically outstretch your expenses. I can't speak for anyone else, but _my_ brain can't wrap itself around the additional income...You have $1000 in income, and you make sure you keep your expenses to $900. So you have $100 extra...and you scrimp and save, and eventually you have $200 extra.

240 months later you don't feel any safer that you have $125000 in savings...meanwhile, you've upgraded your house 3 or 4 times, have upgraded the car 3 or 4 times, bought all the food and clothes and vacations...but you're still the same scared little rabbit you were when you had $200 extra.

People may or may not contribute to a greater cause with the extra money, but that's not the only factor into how people think about money.

Additionally, money does NOT follow value. That guy that IPO'd and his net worth went from $25,000 to $130M? It really wasn't from anything he did, it's lottery money. Is it fair? Meh, I dunno, I'm just pointing out the trope. But if you suddenly found yourself there, why WOULDN'T you buy the most expensive $item? It doesn't affect the number in your checkbook any.

We have the same brains our ancestors had...all it needed to do then was learn how to find the next meal.

donmcronald10• 5 years ago

I don’t think I could waste money like that. Compare a $100k watch to hiring an electrician for a year. In SK / AB Canada there are a lot of electricians out of work due to downturns in resource sectors, but there’s a lot of work they could be doing. It’s just that the work that could be done would be for poor people and no one is going to pay for it.

Owning the wealth gives you the ability to allocate labor and the current wealth owners aren’t doing a good job. Redistribute the wealth IMO.

slibhb• 5 years ago

You're signaling spiritual wealth/enlightenment instead of economic wealth.

This leads to you mimic the surface characteristics of the working class. Old car, old clothes, fashionably unfashionable, hobbies that involve working with your hands, etc. I think this is admirable but I also think that people generally have to go through an immature phase where they buy dumb shit to signal their status before they get to the situation you were raised in.

I don't like the article. It's just bourgeois-bashing and the people who get turned on by that old pastime tend to be somewhat venal themselves.

scsilver3• 5 years ago

Buying dumb shit is the sort of experience the rich can afford that puts such a perspective on life that allows you to then shoot for more fufilling goals/works/community. All the fairy tales in the world arent going to teach you better than living the experience of excess.

letsNotforget• 5 years ago

Let’s not pretend we live in a meritocracy when we can see via legislative acts a whole lot of wealth is owned due to political corruption.

I don’t like the defense of the booj class by proles such as yourself when such kowtowing is effectively putting the boot on the necks of the masses.

Best not upset them or you might not get paid yourself, right? Talk about venal. “Let the rich be! I need to make my paper!”

zemvpferreira11• 5 years ago

You're right and I'm (to a point) aware that my values are a weird pastiche of an imagined working class. Before I turned 25 all I did was while away the day peacefully, now I don't feel ok if I'm not productive in some very immediate way like painting a door. I won't pretend that's not silly.

What I hope to convey is that luxury is a trap if you're not already independently wealthy. And if you are financially free, you can still be sucked back into wage-slavery by wanting too much stuff. And even if you transcend that level of wealth, you can still find more fulfilment by spending your money on things that improve someone else's situation. Stop being fleeced by people exploiting your psychology for their enrichment.

It makes me feel better to buy a burrito from a family restaurant than a Hermès bag. Could we status-signal in that direction? Will it make a difference?

fennecfoxen• 5 years ago

No wonder so many people are eager to bring out the pitchforks. Is this the behaviour we expect from our most successful?

Is this behavior representative of the most successful? This article appears to have been compiled by looking for some of the most egregious examples of ridiculous things to buy, a real get-out-the-pitchforks kind of work, but surely there are those who are merely buying things like real estate and US equities. I can only imagine that if the coverage is broadly characteristic of this class, it would be almost accidental that it is so.

zemvpferreira11• 5 years ago

"If you're reading it, it's for you."

I hope the people portrayed in this article aren't representative but I do know there are two possible reactions to the piece: Being grossed out by the lifestyle or thinking it's a good idea to emulate it. Since the NYT chose to not portray anyone taking a bath on a speculative sneaker purchase, I can only assume their intention is to glorify this behaviour. So I choose to be outraged by it publicly as a counter balance.

tejohnso• 5 years ago

What kind of small gifts do you treat people to? I have trouble finding things that I don't consider to be positive for me (feels good giving) but negative for the recipient (more useless junk they'll pretend to appreciate, or unhealthy consumables).

pillefitz• 5 years ago

Not OP, but drunken me impulse-bought a perfume for my girlfriend yesterday. Hope it smells as good as I remember.. The weekend before I spent 3hrs in the kitchen treating my friends to a nice dinner.

zemvpferreira11• 5 years ago

I'm ok with unhealthy consumables if people enjoy them, but generally: Food, nice soaps, candles, shows, wine, anything they need from the shops while I'm there. Small loans without expecting the money back in some cases. It's hard that a day goes by that I don't get something for someone.

On the other hand I really hate mandatory gift-giving: Christmas, father's day, valentine's, birthdays. I make the minimum effort I can get away with then.

prirun• 5 years ago

If you have been financially unaffected by the coronavirus, give your stimulus money away to friends / family that were drastically affected, like restaurant workers.

anovikov2• 5 years ago

Why do you think it's unfair or morally wrong? I mean, people buying stupid collectibles is just money moving from dumb people to smarter people, as it always does.

zemvpferreira11• 5 years ago

I think it signals the wrong values to the rest of society. We're all influenced by behaviours we see glorified or rewarded. There's damage being done collectively. But I don't think the person engaging in luxurious consumption is a bad person for it. I just think they're being suckers.

datalus• 5 years ago

There's certainly an entire industry of people selling useless shit to rich people, but when I heard about it was from a friend who worked at a call center when they used to reach them via phone :D

leetcrew4• 5 years ago

I grew up with money. From day one my mother berated me for turning on more lights than I needed in the house, or wasting the last bit of butter on the packet. Our cars were always economy models and I drive a 17 year old car right now - fully bought and paid for by my dad 17 years ago for $15K. It's not a "beater". Why would I invest wealth-creating money on a depreciating asset to replace a perfectly good tool?

this isn't an example of being enlightened, frugal, eschewing conspicuous consumption, etc. it's exactly what people mean by the phrase "penny wise, pound foolish". you drive yourself (and presumably others) around in a 17-year-old car when the cost of a brand new one that meets modern crash-safety standards would be nothing to you. the risk/cost tradeoff makes no sense for someone of your (or your family's) means. I would also critique your dad's paying cash for a car when he presumably had great credit, but that's a more debatable point.

zemvpferreira11• 5 years ago

You are 100% right. I don't mean to imply my family's values around money are in any way ideal. They're antiquated, way too conservative, inherited from hard times.

My point is that worshipping frugality, independence and wealth-building is less likely to mess up my life than yearning for a $30M Porsche collection. Sorry if I didn't make my point very well.

nec4b2• 5 years ago

No wonder so many people are eager to bring out the pitchforks.

Only those with a superiority complex or or the ones indoctrinated with with certain ideologies that preach hatred against people of different class or race. Everybody else couldn't care less what they do with their own money.

centrinoblue• 5 years ago

I keep an eye on the annual Barrett-Jackson classic car auction (starts this week) to gauge things. Values got pretty stupid just before the crash in 2008 https://www.barrett-jackson.com/

Guest422• 5 years ago

That seems like a great leading indicator. For a while I’d follow a few levels of real estate but the activity has seemed pretty strange and not very aligned to many other trends. I think the very large apartment companies using fancy stat models for pricing that update almost daily have moved interestingly too in both directions.

chrisfinne• 5 years ago

That is a clever indicator, although the muscle-car generation is passing on, so less demand. Similar to the Model A/Model T crowd 30 years ago.

Another classic indicator is when your cab driver gives you stock tips.

But I figure now it's Uber driver giving crypto tips.

bko• 5 years ago

Who are these people buying NFTs? These are some people mentioned in the article:

Benjamin Clymer, the editor of the watch site Hodinkee
John Demsey, the executive group president of the Estée Lauder Companies
Clement Kwan, the former president of Yoox Net-a-Porter and a founder of Beboe (he bought physical collectibles, not NFTs)

The people missing is the people that spend 8 figures on NFTs. The best I could find is Pablo Rodriguez-Fraile, who spent ~$67,000 and sold it for $6.6 million

I don't doubt that the sales are happening, especially since large institutions like Christie's auctions are involved. But it may be just an elaborate pump and dump by those with interests in these NFT markets. It just seems odd that people are spending absurd amounts on vanity products without coming out and owning it. Or maybe I'm just not in the right circles to know about them.

donmcronald10• 5 years ago

Money laundering? How else can you poof $60 million dollars of taxable money into existence?

ac29• 5 years ago

The buyer of the $69M NFT was Vignesh Sundaresan, a "crypto entrepreneur": https://amycastor.com/2021/03/14/metakovan-the-mystery-beepl...

skeeter2020• 5 years ago

> “The equities space and the cryptocurrency space over the last couple years created really savvy investors who understand the dynamics of the market, so it’s a complement to their Coinbase accounts and their Robinhood accounts,” Mr. Petrozzo said.

This sort of hubris was heard often before the first internet crash. This time around instead of the most amazing technological shift perhaps ever witnessed it's about sneakers and baseball cards.

ketamine__• 5 years ago

There's also Brave. Blocking ads, new advertising model, and privacy by default. They have 25M MAU currently.

microtherion• 5 years ago

Ah yes, those savvy investors who bought Hertz, GameStop, and the Cryptocurrency du jour…

spodek• 5 years ago

All that craving. If only they learned they could satisfy it best by acting in service of others. As one of my role models and Presidential Medal of Freedom honoree Frances Hesselbein says, "To serve is to live."

They're doing the opposite.

recursivedoubts• 5 years ago

bored rich people gave us the renaissance

the problem isn't bored rich people

sys_64738• 5 years ago

This is why governments need to raise taxes on the rich.

rambojazz• 5 years ago

GPUs, probably...

Here's How Bored Rich People Are Spending Their Extra Cash

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