The average American family has seen its income fall over the last eight years while its expenses have risen. Not so for the top 1%. They've been building 40,000 square foot mansions and flying in private jets to visit their vacation homes in Aspen and the Hamptons and so on. But since the fall of 2007, things have headed downhill for the rich along with the Dow -- which has lost 36% of its value since its peak in October 2007.
They're changing their lifestyles. How so? Vanity Fair provides examples of how the super-rich are downsizing in wine, shoes, fitness training, air travel, grocery shopping, and maid service. To illustrate these changes, the list below contrasts their behavior in these different categories between the fall of 2007 and the fall of 2008:
WINE
- 2007: $1,950 bottle of 2003 Screaming Eagle Cabernet Sauvignon
- 2008: $15 bottles of wine
SHOES
- 2007: $600 or $700 pair of shoes as "retail therapy
- 2008: No retail therapy because "It just doesn't feel good."
FITNESS TRAINING
- 2007: Fitness trainer three times a week
- 2008: Fitness trainer once a week
AIR TRAVEL
- 2007: $250,000 for a private plane from New York to China
- 2008: $20,000 for a commercial first class ticket from New York to China
HAIR CARE
- 2007: Haircut and highlights every five weeks
- 2008: Haircut and highlights every eight weeks
MAID SERVICE
- 2007: Maid service five days a week to four
- 2008: Maid service four days a week
As you can see, the rich are not that different from you and me. They just have more money -- even in an economic downturn.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter
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Reader Comments (Page 1 of 1)
12-08-2008 @ 6:07PM
blogs11111 said...
Where did I leave that tiny violin? Where's my box of tissues?
12-09-2008 @ 12:38AM
Badabing said...
Your right- here are my changes in these catagories:
WINE
2007: $6 bottle of wine
2008: Fermented (read old) jar of Grape Jelly
SHOES
2007: $35 pair of shoes as "necessity therapy"
2008: Same shoes as 2007
FITNESS TRAINING
2007: I gained weight
2008: I lost weight- less money to buy food
AIR TRAVEL
2007: Coach seats to Pittsburgh
2008: Bus ride to Pittsburgh
HAIR CARE
2007: Haircut every six weeks
2008: Haircut every eight weeks- Highlights are done by attaching a flashlight to your forehead.
MAID SERVICE
2007: My cousin Rosetta is a maid
2008: My cousin Rosetta got laid off
Oops, sorry. I thought this article was about the average American cutting back.
12-09-2008 @ 7:06AM
Jen said...
Badabing, you're a hoot!