The super rich have grown richer this year. In the last twelve months, the net worth of the 400 Richest Americans on the Forbes rich list taken together amounted to a staggering $1.53 trillion which is a growth of 12 %. It is perhaps because of the growth in their wealth that they are spending more on luxury goods. The figures released by MasterCard Advisors SpendingPulse indicates that the luxury category has posted 10 consecutive months of sales increases compared with the year earlier and the rate of increase has hit double digit figures.
If you study the price fluctuations in luxury products or items that the very rich can afford you will notice a very interesting trend that it moves at more than double the pace of the consumer price index. If the calculations are done taking 1976 as the base year the consumer price index stood at 400 in 2010 where as the Forbes Cost of Living Extremely Well Index has hit 900. Even in the last one year it has increased by 4.5 % as compared to an increase of 3.6 % in the case of Consumer Price Index.
Forbes has created a basket of 40 goods and services that are almost exclusively used by the very rich because they are very expensive. According to this study 20 items on that list has seen an increase in price. A Russian Sable fur coat, a Louis Vuitton travel bag and a pair of custom made John Lobb shoes cost more this year than they did a year ago. 12 items on the list didn’t register any change in price where as only three items are cheaper this year. If the rich are passionate about something they don’t mind paying any price for it.
Via: forbes
