Related Articles
Top Stories
May 27 2012 11:21
There's a price war raging between South Africa's cellphone networks after Cell C lowered the rates of its prepaid calls by more than 34%.
May 27 2012 13:09
The oversupply of golf estates has claimed another victim.
May 28 2012 07:53
The City of Cape Town has spent R175m running the Myciti bus service since the Soccer World Cup compared to an income of R35m, a report says.
London - The world's rich devote about a quarter of their "investments of passion" to yachts, planes and other big-ticket collectibles and about a fifth to art, according to a rare breakdown of their spending on Wednesday.
The 2007 World Wealth Report, widely used as a benchmark for the wealth management industry, estimated that assets held by the world's richest people rose by 11% to $37 trillion last year, driving demand for luxury lifestyles and brands.
The study counted people with liquid assets of more than $1m, about 9.5 million of them.
It estimated that 1.8% of their portfolios, or about $670bn, was spent on what it called "investments of passion", which the study broke down for the first time.
The Merrill Lynch/Cap Gemini study said 26% of this amount went to luxury collectibles including vintage yachts and luxury cars and that demand for such goods was rising.
In the case of privately owned jets, the wealthy were setting their sights higher. The study said Boeing had reportedly taken orders for 11 wide-body private jets, which were being customised as "mobile mansions".
In Europe, a quarter went to art, which is increasingly being seen as an investment at a time of record prices for old and contemporary work. Art also helped diversify portfolios because of its low correlation with the cycles of financial markets.
About 18% of "passion" spending went to jewellery, 14% to "other collectibles" such as wine, antiques and coins, and about 6% went to investments in sports such as buying teams, race horses or sailboats, the study showed.
Everyday living costs are also rising faster for the world's rich than for most folk.
The Cost of Living Extremely Well Index (CLEWI) rose by 7% last year, outpacing 4% growth in the consumer price index. The CLEWI index consists of 42 luxury items such as helicopters, tuition at Harvard and Dom Perignon champagne.