Luxury Spending vs Social Needs

Debating the ethical implications of luxury amidst widespread economic struggles

Ric Edelman: It's Thursday, May 2nd. On today's show, the lifestyles of the rich. You know, there used to be two main types of seating at a sporting event? Luxury suites, and a seat in the stands. There used to be, on an airplane, first class seats. And economy. Not anymore. Now there are private jets for the rich. You're stuck using a commercial airliner, or you're not their customer, you're their hostage.  

And if you want to go to a sporting event, it's not just good seats that rich people buy, they get premium hospitality options. At the Masters last month, you could pay $17,000 per person. Top food, great seats, meet and greet photo ops with the players, lots of swag. The New England Patriots have built a patio that lets fans watch players walk onto the field from the locker room. The San Francisco 49ers are renovating a hundred luxury suites that make them even more opulent. Corporations used to buy three out of four of these suites. Now they only buy half of them. Rich people and people who are celebrating a special occasion, they're now the big buyers of these suites.  

The Kentucky Derby at Churchill Downs. They've got the Turf Club. You can now buy a front row table for six that overlooks the finish line. It's $30,000.  

Oh, you're taking a cruise? Forget about dinner at the captain's table. The rich now have their own super yachts. At the International Yacht Club, you can pay $14,000,000 a year. That's not for the yacht. That's for the berth you park it in.  

And if golf is more your style, you can join the Shell Bay Club in Miami. Guess how much it costs to join? The cost to join the Shell Bay Golf Club in Miami $1,350,000. Or you could join the LaGorge Country Club in Miami Beach. The initiation fee is 700 grand. So it is for Emerald Dunes. They've got a waiting list of a hundred people. The breakers in Palm Beach, here's a bargain, $550,000. 

Or maybe you want to buy a high-end car. A Rolls Royce will cost you half a million dollars. These things have a night sky display in the roof of the car. Thousands of tiny fiber optic lights. You don't just pick the color and the leather. One buyer wanted embroidery depicting the moon's surface. It required $250,000 individual stitches. Another buyer wanted a constellation of their baby's footprints inlaid into the car's dashboard. One Bentley buyer spent half a million dollars just for carbon fiber. He doubled the price of the car. Another person demanded that wood be used from his own forest. That cost two million bucks. Forest not included.  

Contrast all of this with yesterday's show, if you missed it, the link’s in the show notes. While we have women in rural communities throughout the United States who don't have a hospital or clinic that will help them with their pregnancy or deliver their baby or provide post-delivery care, all because not enough of them have the 15 grand that the hospitals want to keep maternity wards open. We have rich people flying their private jets to the Mediterranean so they can board their private yacht so they can watch the F1 race in Monaco from their luxury pavilions, spending more on swag than that mom needs to deliver her baby. I am deliberately trying to piss you off. People on the left, let's face it, who are not usually wealthy, are angry at this situation. People on the right, let's face it, who are usually wealthier than the people on the left, they're angry at my one-sided, biased portrayal of this situation. Hey, I get it. I am one of those wealthier people. I enjoy all those perks that others say are flagrant, abusive in a world where millions of people are in tremendous need. 

But I'd argue, along with a lot of people who are wealthy, that we are very philanthropic. We give away more than most people pay in taxes. And the luxuries we buy, that spending creates a huge number of jobs. Remember when Bill Clinton created the luxury tax? A 10% tax on the price of new boats and jets. 

Well, guess what rich people did? They quit buying new boats and planes. They just bought used ones. And all the shipyards that made those boats, and all the factories that made those jets, they suffered massive job layoffs. So much so that Clinton was forced to repeal that luxury tax in short order. You don't strengthen the caboose by weakening the engine. So let's not just try to tax rich people out of existence. Okay?  

But hey, my fellow rich people, we're a mostly generous bunch, but we're not generous enough. We can afford to pay a little more in taxes. We can afford to give a little more to those in need. Let's be a little more inclusive. Shall we? If we all look a little closer at the circumstances and perspectives of the others, I think we'll all come a little closer to getting what we each want. And if you're a financial advisor, maybe this is a conversation worth having with your clients.  

On tomorrow's show, protecting your brain from Alzheimer's disease. Plus, what to do when you're at the end of your career. We'll talk with Jay Meyer. 

----- 

Announcer: Have you registered for VISION? DACFP’s biggest crypto conference of the year. It's exclusively for financial professionals and accredited investors. It's June 2nd to June 4th, in Austin. You'll get the latest cutting-edge educational content and actionable ideas from leading investors and industry thought leaders. The information you need about crypto to serve your clients and attract new AUM. This event is designed to maximize your learning experience. No breakout sessions. So you don't miss a thing. Private one one-on-one meetings and dine-arounds. Check out our list of speakers at DACFP.com. VISION has sessions on all the latest in crypto, spot bitcoin ETFs, capturing alpha in crypto stable coins and CBDCs tokenization, AI and crypto. The institutional view of crypto and a whole lot more. And of course, terrific networking. You can also sign up for the optional pre-conference workshop, an introduction to blockchain and digital assets, a four-hour course taught by Ric Edelman. This course includes continental breakfast, lunch, and a cocktail reception at 5:00pm. Registration is only $149 – secure your spot for VISION now at DACFP.com.  

----- 

Subscribe to podcast updates: https://form.jotform.com/223614751580152 

Ask Ric: https://www.thetayf.com/pages/ask-ric 

----- 

Links from today’s show: 

VISION – Register Now: https://dacfp.com/2024-dacfp-vision/  

Maternity Care Deserts (5/1/24 Episode): https://www.thetayf.com/blogs/news/maternity-care-deserts 

----- 

Follow Ric on social media: 

Facebook: https://www.facebook.com/RicEdelman 

Instagram: https://www.instagram.com/ric_edelman/ 

LinkedIn: https://www.linkedin.com/in/ricedelman/ 

X: https://twitter.com/ricedelman 

YouTube: https://www.youtube.com/@RicEdelman 

----- 

Brought to you by: 

Invesco QQQ: https://www.invesco.com/qqq-etf/en/home.html 

Schwab: https://www.schwab.com/ 

Disclosure page: https://www.thetayf.com/pages/sponsorship-disclosure-fee 

-----