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The rich are different
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rynner
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PostPosted: 20-06-2007 06:02    Post subject: The rich are different Reply with quote

"The rich are different from you and me." -- F. Scott Fitzgerald

Airbus superjumbo for private use

An unnamed buyer at the Paris air show has placed an order for an Airbus A380 superjumbo to use as a private jet.
Airbus said the individual, "not from Europe or the US", would use the plane for "personal use for him and his entourage", AFP news agency reported.

The double-decker, which is thought to have cost $300m (£150m), has 900 sq m (10,000 sq ft) in cabin space and has room for up to 840 passengers.

It is expected to take more than a year to convert the jet for private use.

Aage Duenhaupt, a spokesperson for Lufthansa Technik, which turns large commercial planes into private jets, said the majority of clients were originally Middle Eastern.

But using the model as a private jet could be problematic, because its weight and size mean it can only be landed at a limited number of airports, by certain pilots.

Environmental groups were annoyed by the news, saying that buying a superjumbo for private use was like "buying a filthy coal-fired power station just to use to charge up your mobile phone."

The model is set to come into use later in 2007.

http://news.bbc.co.uk/1/hi/business/6768237.stm
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rynner
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PostPosted: 20-06-2007 06:20    Post subject: Reply with quote

Tax and the City: Four private equity chiefs appear before angry MPs
One rule for the super-rich, but another for everyone else
By Sean O'Grady, Economics Editor
Published: 20 June 2007

It is a long time since Gordon Brown pledged to end "the tax abuses which reach to the heart of our public finances by indulging the super-rich at the expense of the rest of us". More than a decade later, there is a growing sense that the Brown promise has not been kept. Today will see the latest phase in a ferocious row breaking out over the privileges of a select group of multi-millionaires who dominate the financial affairs of London.

Damon Buffini, 44, head of the private equity group Permira, is to appear before the Treasury Select Committee to defend his industry from allegations of excessive profiteering. Three other senior members of the industry will also be required to testify before MPs. The interrogation comes as the Liberal Democrats call for the abolition of a series of tax concessions currently exploited by some of the wealthiest businessmen in Britain.

Mr Buffini is thought to be worth about £150m, while Permira has bought businesses ranging from New Look to Little Chef and Holmes Place and made a 600 per cent return from its £900m sale of a revamped Homebase group.

Apart from the sheer disruptive scale of modern private equity activity on big employers - J Sainsbury and Jaguar/ Land Rover have recently been real or potential targets - Mr Buffini, and three other representatives of the industry, will have to satisfy MPs on two counts. First, he will be required to address the advantageous treatment given to companies that borrow money rather than raise it through issuing shares. Although such tax reliefs are available to all, private equity is often funded by huge levels of borrowings to take advantage of low interest rates, and thus has been the most spectacular beneficiary of the current rules.

Second, and less defensibly, private equity has exploited a measure introduced by Mr Brown in his 1998 Budget aimed at rewarding small businesses by allowing them to keep 90 per cent of the capital gains on their assets after only two years. With a little financial engineering that can be converted into an effective income tax rate of 10 per cent. This was not intended to apply to the vast fortunes generated by private equity.

Nicholas Ferguson of SVG Capital candidly remarked that he was concerned at the low rates of tax paid on large deals in the City. He said he felt uncomfortable paying lower taxes than his cleaner. Shocked

The private equity boom is only one source of income for the super-rich who are turning London into one of the most expensive cities on Earth. According to property experts, a tiny number of extremely rich individuals is having a disproportionate effect on the London property market, helped by the exploitation of another tax loophole.

More than half of London's multimillion-pound houses are being bought by "non-doms", that is technically "non-domiciled" persons who are resident in this country and whose anomalous status allows them to avoid taxation on their non-UK earnings, usually the vast bulk of their income.

For those fortunate few who can demonstrate that they have some connection, family or business, with a foreign country, the UK is one of the more desirable places to work, rest and play. In the case of those buying a £5m or £10m family home with a smart address, stamp duty can be reduced from 4 per cent to the 0.5 per cent paid on share purchases by placing the house in an offshore company (thus allowing the buyer to purchase shares in the company/house rather than the property itself).

The general effect has been to see prime London property continue to rocket in value, with knock-on effects through rest of the property market in London and the South-east.

Non-domiciled status completely removes the risk that any tax might be incurred. Ownership of multiple properties and the use of offshore trusts also effectively insulate the super-rich against the vagaries of capital gains tax and inheritance tax. A study by the International Monetary Fund ranked Britain alongside Switzerland, Bermuda and the Cayman Islands as an "offshore financial centre", in effect a tax haven.

Vince Cable, the Liberal Democrats' Treasury spokesman, attacked the current arrangements as blatantly unjust. "There is a growing sense of unfairness in the tax system with millions of people paying increasing amounts of tax. This includes people paying 40 per cent tax on relatively moderate incomes who will also pay inheritance tax at 40 per cent and stamp duty at 3 to 4 per cent, but who are discovering that the super-rich pay none of these things... The current system is creating a corrosive sense of unfairness."

Throughout his chancellorship, Mr Brown has shared Tony Blair's reluctance to alienate big business or jeopardise the pre-eminence of the City in world money markets. The kid-gloves treatment of private equity funds has reflected that approach.

In July 2003 a memorandum of understanding between the British Venture Capital Association and the Inland Revenue established a "safe harbour" for capital gains - even when fund managers have not risked their own money.

Stuart Adam of the independent Institute for Fiscal Studies says the generosity of tax breaks available in such cases is "difficult to justify". One estimate puts the cost to the exchequer of these tax breaks at £6bn per year.

The advantages of wealth

Stamp Duty

Levied at 4 per cent on properties worth £500,000 or more,it can be reduced to 0.5 per cent if the house is placed in an offshore company.

Capital Gains Tax Taper Relief

Privately held business assets sold on after two years can attract a mere 10 per cent tax; much lower, say, than on gains from property or quoted shares or indeed on income.

Non-domiciled Status

Provided you can prove some family or business link in foreign country, you are effectively free of virtually all UK tax on non-UK income.

http://money.independent.co.uk/personal_finance/tax/article2679488.ece
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Anome_Offline
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PostPosted: 21-06-2007 10:29    Post subject: Reply with quote

The rich are different. They don't feel pain the same way we do. So you shouldn't be afraid to belt them in the face as hard as you can.
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rynner
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PostPosted: 23-06-2007 07:32    Post subject: Reply with quote

Prices soar as world's super-rich invade London art market

Saleroom records tumbled in a frenetic week, as the Russians led the way on the latest leg of an elite international tour

Matthew Taylor, Josh Spero and Charlotte Higgins
Saturday June 23, 2007
The Guardian

As the auction passes the £20m mark, the room's attention is focused on two telephone bid-takers locked in urgent discussions with unseen clients. After a moment of doubt, one looks up from the phone, shoots a glance towards the auctioneer, and nods.
Francis Bacon's Self Portrait has just jumped another £250,000. The game is on. This week London's two main auction houses - Christie's and Sotheby's - saw record after record tumble as the world's wealthiest collectors proved that when it comes to art they are now prepared to dig very deep indeed to get what they want. Bacon's Self Portrait sold for £21.5m - twice its estimate. Ten minutes later Damien Hirst broke the record for a living artist when his Lullaby Spring - a giant medical cabinet with more than 6,000 pills placed on razor blades - went for almost £10m.

Unprecedented

But this was just the final instalment in a unprecedented week of sales. On Wednesday a 1992 portrait by Lucian Freud almost doubled expectations when it was sold for £7.8m. Twenty-four hours earlier Claude Monet's Nympheas went for £18.5m, and on Monday one of the artist's Waterloo Bridge paintings, which was expected to fetch around £7m, was sold for £17m.

"It has been a truly incredible five days," said Jussi Pylkkänen, president of Christie's Europe, which has taken a record £237m over the last week. "Every night there have been records broken."

Although the art market has been on a steady upward curve since 2002, this week's London sales have catapulted it into new territory. Analysts say wealthy collectors from China, Russia and the Middle East are becoming regular fixtures in auction rooms and giving more established names from Europe and the US a run for their money. Henry Wyndham, chairman of Sotheby's Europe, said: "At the top end of the market there's immense wealth. There's more wealth around than at any time in my lifetime. It's all over the world." London's reputation as a tax haven for the super-rich means that many of the wealthiest international collectors are now based here.

Prominent among this group are the Russians, who having transformed London's property market are doing the same to the capital's art scene. "It has developed into an amazing phenomenon," said Natasha Chouvaeva, editor of London-based magazine the Russian Courier, which devoted its last issue to the impact Russian money is having on the international art market.

The impact of the new buyers from around the world is reflected on a board above the auctioneer's head at Sotheby's, which, for the first time, this week translated the value of each bid from pounds sterling into Russian roubles.


The international nature of the spectacle was underlined by the range of work on offer in Sotheby's contemporary auction on Thursday night. Alongside the Hirst and Bacon were paintings by several Chinese artists, including The Pope by Yue Minjun, which went for more than £2m. Mr Wyndham, who was the auctioneer for Sotheby's Impressionist sale on Tuesday, said the Chinese market was becoming increasingly important. "China has really woken up in the past five years or more. I think it's a huge new market for us."

In the hour before the contemporary art auction started at Sotheby's London headquarters on Thursday, a stream of luxury cars pulled up as dealers and collectors from around the world arrived for one of the highlights of the art year. But for many of these seriously wealthy collectors this week's frenetic activity in London's auction rooms is simply the latest leg on a worldwide tour which combines art with one of the most elite social scenes in the world.

The summer season, beginning at the Venice Biennale, opened this month. From Venice fleets of private jets took collectors to the Basel Art Fair in Switzerland - the most important fair in Europe for contemporary work.

Insatiable

This year has been unprecedentedly busy, because of two other hugely significant art events: the five-yearly Documenta, in Kassel, Germany, and the 10-yearly Sculpture Project, in Münster, which have, like some rare astronomical event, all coincided this year with Venice. Committed collectors will have made a royal progress to each event before this week's sales in London.

But not everybody is convinced that the seemingly insatiable appetite for works of art is good news for the industry - or the public. "There is an incredible amount of money chasing big name artists and quite a lot chasing up and coming names," said David Barrie of the Art Fund charity.

"This creates difficulties for museums and organisations like ours because it is driving more and more of the market out of our reach - and the public's."

But Mr Wyndham said the "circulation of art [is] a very good thing for everybody", adding: "If it goes to a museum it's locked in forever. If it goes to a private collection there's a chance it will re-emerge at some point."

Dinos Chapman, one half of the Chapman Brothers, said: "It is like worrying about the rain. [The booming art market] is a consequence of the vast amounts of money sloshing around and a consequence of a deepening inequality between those that have and those that do not ... if one day capitalism just decided to stop, I'm pretty sure art would still continue to be made."

http://arts.guardian.co.uk/art/news/story/0,,2109454,00.html

No daub of pigment on a bit of canvas can really be worth millions

- these millionaires are just posing, showing off their enormous bank balances.
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ted_bloody_maulOffline
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PostPosted: 23-06-2007 12:01    Post subject: Reply with quote

rynner wrote:


No daub of pigment on a bit of canvas can really be worth millions

- these millionaires are just posing, showing off their enormous bank balances.


Perhaps although they're also considered good investments.
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rynner
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PostPosted: 23-06-2007 12:13    Post subject: Reply with quote

ted_bloody_maul wrote:
rynner wrote:


No daub of pigment on a bit of canvas can really be worth millions

- these millionaires are just posing, showing off their enormous bank balances.


Perhaps although they're also considered good investments.


But only until the next financial crash.

Paintings have very little intrinsic value - they are only worth what someone is prepared to pay for them. After a stock market crash, paintings could prove a glut on the market, and prices would tumble.

So not good investments compared to platinum or diamonds, which do have intrinsic value.
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rynner
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PostPosted: 27-06-2007 21:25    Post subject: Reply with quote

Tycoon couple's laundry aired in public
By Victoria Bone
BBC News

US businessman Matthew Mellon has been acquitted of paying private detectives to hack into his ex-wife Tamara's computer during their divorce. Parts of the trial were reminiscent of a scene from the famous soap-operas Dallas or Dynasty.

Matthew Mellon II was the scion of a famous American banking dynasty. His grandfather was US Treasury Secretary in the 1920s and his father, Paul Mellon, owned a string of racehorses including Mill Reef, which won the Derby in 1971.

Tamara's mother was a former Chanel model and her father was co-founder of Vidal Sassoon.

Born in Berkshire but raised in Beverly Hills, she was first sent to boarding school in England and then to the same Swiss finishing school Diana, Princess of Wales, attended.

She worked as a shop girl and had spells in PR before becoming accessories editor of Vogue and a fixture on the party scene.

The pair, who met in 1998, married in a star-studded event at Blenheim Palace.

Their close friends Elizabeth Hurley and Hugh Grant were among the guests and American Vogue dedicated eight pages to the nuptials. Rolling Eyes

The Mellons had a daughter, but the marriage began to flounder and in 2003 Mrs Mellon began divorce proceedings.

Mrs Mellon had turned the Jimmy Choo shoe company from a niche East End cobbler into a global fashion brand.

She made £185m this year from selling the company, which she began in 1996 with a £150,000 loan from her father.

She retained a stake of between 10% and 20% and the presidency of the company.

During the trial the prosecution claimed that her husband was obsessed about knowing her financial assets.

Received e-mails

Several months later, Mrs Mellon's assistant intercepted a string of e-mails apparently offering sympathy and assistance.

It later emerged they were so-called "tempters" containing a highly sophisticated "Trojan" virus that would - had she opened them - have recorded every stroke she made on the keyboard.

The prosecution claimed they had been created by a technology wizard working for the AIS private detective agency.

But Mr Mellon's counsel, Nicholas Purnell, QC, said his client had paid them £12,000 to check whether Tamara was concealing financial information during their "acrimonious" divorce but had no idea they would do anything illegal. Wink

He claimed Mr Mellon has himself been "duped and gulled" by AIS.

The courtroom was packed the day Mrs Mellon took the witness stand.

Dressed from head-to-toe in designer clothes and wearing £2,000 four-inch crocodile skin Jimmy Choos, she revealed intimate details about her marriage.

She told Southwark Crown Court her former husband, now 43, was "like a child" and with a memory that made him "miss planes like other people missed buses", according to prosecutors.

'Absent-minded'

Mrs Mellon, 38, said: "For a long time I didn't want him to be alone with our daughter just because he is so absent-minded. I wanted him to be supervised even though he is fantastic with her. He is too absent-minded to be alone with her."

But for all his deficiencies her former husband, who lives in Belgravia, central London, was "happy, playful, excitable and very sweet" and remained her "best friend", she said.

Mrs Mellon was asked about a dossier of information, supplied by AIS and found at her ex-husband's home when he was arrested, containing logs of computer activity.

She said there was "absolutely no way" he could have read or understood it. "Matthew cannot even read a comic let alone a legal document," she said. Cool

Mr Mellon also suffered from insomnia, memory loss and a form of manic depression, the court heard.

Mrs Mellon's solicitor said she had been obliged to give evidence but was still good friends with her ex-husband and felt no bitterness towards him.

So that's all right, then. Very Happy

http://news.bbc.co.uk/1/hi/uk/6244878.stm
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PostPosted: 27-06-2007 23:05    Post subject: Reply with quote

rynner wrote:
ted_bloody_maul wrote:
rynner wrote:


No daub of pigment on a bit of canvas can really be worth millions

- these millionaires are just posing, showing off their enormous bank balances.


Perhaps although they're also considered good investments.


But only until the next financial crash.

Paintings have very little intrinsic value - they are only worth what someone is prepared to pay for them. After a stock market crash, paintings could prove a glut on the market, and prices would tumble.

So not good investments compared to platinum or diamonds, which do have intrinsic value.


It doesn't happen very often that works of art fall in value - usually the trend is upward, even in times of financial turmoil.
The only real intrinsic value diamonds and platinum have is for use in industrial processes - but most people value them more highly than that for their 'bling' value... which brings us right back to works of art, which are another form of 'bling'.
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PostPosted: 27-06-2007 23:18    Post subject: Reply with quote

rynner wrote:
The only real intrinsic value diamonds and platinum have is for use in industrial processes - but most people value them more highly than that for their 'bling' value... which brings us right back to works of art, which are another form of 'bling'.


Bling not. Own a working farm.
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PostPosted: 28-06-2007 07:41    Post subject: Reply with quote

Number of wealthy individuals in Britain surges
By Sean O'Grady, Economics Editor
Published: 28 June 2007

The super-rich have dramatically increased their wealth and there are more of them than ever, according to the latest CapGemini/Merrill Lynch World Wealth report.

The definitive guide found that the world's high-net-worth population - defined as individuals with net assets of at least $1m (£500,000), excluding their primary residence and consumables - now stands at 9.5 million. That is roughly the same size as the population of the Czech Republic.

In terms of growth, Singapore (21 per cent), India (20 per cent), Indonesia (16 per cent) and Russia (15 per cent) saw the biggest increase in wealthy individuals, consistent with their breakneck economic growth, although the number of Chinese rich rose by a comparatively egalitarian 7.8 per cent.

The UK's high-net-worth individual (HNWI) population grew 8.1 per cent, to 485,000 and this country is now home to 16.7 per cent of Europe's HNWIs. Globally, 800,000 people joined the "rich club", while the number of ultra-HNWIs - those with net assets of at least $30m - rose by 11.3 per cent to 94,970.

The report also found that the wealthy are getting richer, more quickly. The assets of HNWIs rose at an even faster rate than their numbers, and at the fastest rate for seven years.

Driven by a strong global economy, their wealth grew 11.4 per cent to $37.2trn in 2006. According to Merrill Lynch, they have been switching their wealth into property.

However, they are becoming more inclined to philanthropic giving. In total this equates to more than $285bn globally.

The survey also offers a few clues as to the tastes of the super-rich and their "investments of passion". These include luxury cars, boats, planes, jewellery, art, sports-related investments such as professional teams, sailing and racehorses; and other collectibles such as wines and antiques. Luxury collectibles took the lion's share (26 per cent) followed by art (20 per cent) and jewellery (18 per cent).

The bad news, for the plutocrats, is that they're just as prey to inflation as the rest of the world. The Forbes' Cost of Living Extremely Well Index (CLEWI) measures the cost of a basket of luxury goods and services. This includes designer handbags, watches, clothing, high-end spa services, tuition at Harvard University, a case of Dom Perignon, filet mignon and planes and yachts. In 2006, the cost of luxury goods rose nearly twice as fast as everyday consumer products, with the CLEWI rising 7 per cent while everyday consumer products, as measured by the Consumer Price Index, rose only 4 per cent. The report suggests economic growth will slow in 2007 as mature economies grow more moderately.

CapGemini/Merrill Lynch estimate that the super-rich will be worth a total of $51.6trn by 2011, with the Asia-Pacific region the pacemaker.

Recent official figures confirm the picture of an elite growing ever wealthier even in relative terms, and an elite centred in London. Data from Revenue & Customs show that the number of top earners (on £500,000-plus per annum) rose from 19,000 in 2003-04 to 30,000 now, with most living in the capital.

http://news.independent.co.uk/business/news/article2717319.ece

rynner counts pennies in pocket... Sad
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PostPosted: 30-06-2007 14:29    Post subject: Reply with quote

Do they have holes in their socks, like my rich friends do?

Some years back one of them `finally` got a Morgan car (after a very long wait)

He said "Its a great car, it wont deprechiate"
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PostPosted: 30-06-2007 17:26    Post subject: Reply with quote

Anome_ wrote:
The rich are different. They don't feel pain the same way we do. So you shouldn't be afraid to belt them in the face as hard as you can.


The poor are used to the pain. So you shouldn't be afraid to belt them in the face as hard as you can.
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PostPosted: 01-07-2007 07:34    Post subject: Reply with quote

I wouldn't know about them, I'm middle class.
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PostPosted: 01-07-2007 14:20    Post subject: Reply with quote

Here's Fitzgerald's full quote:

Quote:
Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft where they are hard, and cynical where we are trustful, in a way that, unless you were born rich, it is difficult to understand. They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think that they are better than we are. They are different.


I just typed it in from my copy of Ferdinand Lundberg's 1968 best seller, The Rich and the Super Rich which, ironically, I bought for 35 cents from the local Salvation Army store.
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PostPosted: 01-07-2007 14:24    Post subject: Reply with quote

Actually, I don't know if that's the "full" quote, but it's a little more anyway.
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