The Affluentialist

Remember the early rush of press scrutiny that followed the surprise announcement of John McCain’s Veep choice? The virtually unknown Sarah Palin was the subject of intense media interest in those first days. As the Alaskan governor prepared for her new national role, the press became more and more heated in their demands for a “press conference.” Even after interviews with individual journalists, including Charlie Gibson of ABC and Katie Couric of CBS, the press corps continued to demand a formal conference.

Well, Sarah came and went and, to my knowledge, the press conference never happened. The press failed to get its man—or, in this case, woman. But, lordy, it’s all we heard about for three weeks of the campaign. It’s worth noting that her Democratic counterpart, Joe Biden, who went on to victory on the Obama ticket, received only a fraction of the coverage that Palin did. Could it be that the press was more interested in catching a gaffe-prone beauty queen on video than hearing from the real newsmakers?
If you already have a jaded opinion about the press, then you won’t be surprised to hear that there’s another incredibly important world figure, one whose influence on the global financial stage touches literally every power center in this financial crisis, whom the press has virtually ignored: Citigroup advisor and former Clinton Treasury Secretary Robert Rubin.

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The United States, the wealthiest nation in the world, has become the biggest debtor nation in the world. That simple, untenable, disgraceful fact explains much of what ails the stock market, the housing market, even the price of food at the grocery market.

It is a lack of leadership that is substanlrotially responsible for our current sorry state of affairs. Leaders are supposed to show us the way. Instead, what we’ve had for decades, for my entire lifetime, I believe, is leadership that has chosen to pursue personal richesin the form of money, power, and satisfactionat the expense of the people they represent.

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Here’s the scenario. A valued client comes to you with a question:

Lewis, you’ve been helping me with my long-term retirement plan and that’s on track because we moved it mostly into bonds over the last five years. While the value’s been diminished somewhat, I trust that the market will come back over time. Besides, we’ve got a great annuity solution that kicks in two years from now when I start to phase into retirement.

I’m not too worried about the kids either because they’re finished with college and they have a trust that gives them an income stream. That’s sufficient for now.

I’ve paid off my mortgages and I’ve got no outstanding lines of credit.

Here’s the situation: I’ve just received a settlement from an estate from a distant aunt for $100,000–I know, I know, those who need the least have the most, right?

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Not only do the rich donate money to political campaigns, more than 99% of them say they go to the polls. According to a recent survey we conducted in March of 338 “Middle-Class Millionaires,” (households with self-made net worths of between $1 million and $10 million dollars, they also told us that they plan to discuss their presidential choice with others.
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I recently read an article in The New York Times about an up-and-coming media mogul who claims to have coined the word “affluencer” which means: someone who tries to influence the affluent. In her role as the chief of NBC’s Bravo network, Lauren Zalaznick creates programming that will influence affluent people—in particular, her network’s target demographic of 18 to 49 urbanites.

As readers of this blog know, I call myself an “affluentialist.” While I don’t claim to have created the word “affluential” (here’s the source), I have to admit, I like the word “affluencer.” It rolls off the tongue more easily than “affluentialist.” So, I’m kicking myself for not having thought of that word myself.
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A few weeks back, I posted a blog installment on the future prospects of luxury spending in times of economic uncertainty or recession. Our survey of Middle-Class Millionaire households drew a distinction between “luxury discretionary spending” like jewelry, watches, and other cultural ephemera, and “values-based spending” that reflects the middle-class perspective of the working wealthy, such as charitable giving.

In a recent survey, we looked at that distinction more closely. It shows that the self-made wealthy will continue to spend on travel and their homes, and will pause, but not cancel, other luxury spending.

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According to our recent survey, just over 77 % of America’s Middle Class Millionaires, those with a net worth between $1 million and $10 million that they have earned, rather than inherited, say that a recession is imminent. Further, an overwhelming number of them, 93%, do not believe the government will offer relief or a significant bail out plan.
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Russ Prince and I recently conducted a new study about how households with a net worth between $1 million and $10 million, who we call “Middle-Class Millionaires,” (www.middle-class-millionaire.com) feel about the economic climate and offer some insight into the impact it will have on their spending habits.

Between January 10 and January 18, 2008, we surveyed a random sample of 338 Middle-Class Millionaires throughout the nation and here’s a summary of what we found:
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The good folks at KeyBank brought me down to Ft. Lauderdale a few weeks ago to attend the International Boat Show. Over one hundred thousand attendees attend this event each year, bringing in more revenue for Ft. Lauderdale than even the Super Bowl.

From KeyBank’s perch in “Mega-Yacht Row,” we had an up-close view of personal luxury yachts that ranged in cost from $6 million to more than $25 million and up and ran upwards of 160 feet. The term mega-yacht isn’t really sufficient though when describing the new up-and-coming yachts that are well past two hundred feet and can run higher than 400 feet. For these vessels, the industry has introduced the term “Giga-Yacht.”

While at the show, I also learned about “shadow yachts.” These are second boats that follow the first boat and contain all the toys the yacht owner could want, from cars and motorcycles to helicopters and speedboats. Shadow yachts also contain beauty parlors, additional storage space and room for additional staff, including security teams.
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In my last blog post, I addressed the issue of wealth and race. In this post, I thought I’d take on a slightly lesser charged issue: wealth and religion.

Forgive me for so blatantly putting my head under the guillotine—I mean no harm. I’m just trying to follow the trail of affluence in our modern society. Also, a little bit of data makes me brave, perhaps a bit dangerous.

To wit: While surfing Pew Research’s Web site for data about race and money, I stumbled upon this report: “World Publics Welcome Global Trade—But Not Immigration.” The report considers how the populations of various nations view economic globalization.

As I skimmed the summary, I was stopped by this paragraph:

“The survey finds a strong relationship between a country’s religiosity and its economic status. In poorer nations, religion remains central to the lives of individuals, while secular perspectives are more common in richer nations. This relationship generally is consistent across regions and countries, although there are some exceptions, including most notably the United States, which is a much more religious country than its level of prosperity would indicate.”
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