How To Survive The Downturn If You're Obscenely Wealthy
Sure, mouthbreathing peasants can whine about the economy all they like, but they can't even fathom the pain that we wealthy masters of the universe face in a recession.
Only we know how hard it is to tell a servant his services are no longer needed. Or feel the pangs of sickness that come with settling for carrots rather than caviar at a high-class function. Or worse yet, see that the trust fund is so low that we're forced to patrol charity auctions for Prada. Why, it's enough to make us weep into our handkerchiefs woven of $100 bills.
The cover story of the May 11 Forbes speaks to our difficulties, including this unfathomable anecdote about a poor sap who... hold on, give me a minute here (sob) was unable to finish building his yacht.
There's the problem of bearing up under a different sort of adversity—when your yacht builder goes broke. A Las Vegas health care executive has paid $20 million toward completion of a 145-foot, $27 million yacht—the world's biggest sailing catamaran—only to have Derecktor Shipyards in Bridgeport, Conn. stop work after it filed for bankruptcy last summer.
Lord knows we've all been there before. The story goes on to tell you how to avoid such pish posh, advising you how to protect assets, sidestep taxes and keep our toys. And the lead-in wraps up with a compelling perspective: "It's still good to be rich."
Which is true enough, but we all know that being rich isn't as great as it could be when a brother can't even get a yacht built.
Survivor's Guide for the Affluent [Forbes, via The Awl]
(Photo: nailingjello)
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Comments:
My GOD Phil! Do you not understand how terrible a place the world will be without a gigantic catamaran?! The petty whining of millions of out of work Americcans is nothing compared to the deep and profound depression that one obscenely rich individual felt for the millisecond before he realized that his Gulfstream is probably a more fun way to travel anyway.
My surgeon went bankrupt in the middle of my liver transplant... so I gots no liver now AND I'm out the 3 easy payments of $49.95.
Sometimes I really don't know what to think about that Dr. Nick.
@pecan 3.14159265: This, absolutely. Even if he was spending it on something most of the population considers a wild excess, he still paid for it.
Kinda funny how the world works...
Get paid an obscene amount of money, which of course comes out of the bottom line profits of companies, company goes broke, people lose their jobs, they can't pay for shit, more people lose their jobs, and eventually your Yacht doesn't get built. Karma anyone?
I thought the easiest way to survive the economic downturn was to stop giving any more to charities than you can deduct on your income taxes.
At least that's what it looked like according to a few cpas that deal with charities that I know.
If he's paying $20 million for the world's largest yacht, chances are he has a lot more stashed away and will just find another builder to either finish the yacht or build a new one....our "sympathy" notwithstanding.
In the meantime, he should do a chargeback.
@pecan 3.14159265: ... there are times I disagree with you. This is not one of them. Thank you for this post.
Hey, that Health Care Executive denied many cancer claims to afford that yacht....
There's something pretty tweaked about our for-profit health care system when an exec (and not even a CEO, simply an exec) has $30m in throw-away money for a boat, when 50m people are uninsured because they can't afford premiums.
If only there was a model that had 3% overhead rather than the ten-times multiple overhead amounts that we currently "enjoy", yet still delivered better results for our population. If only!
@Pink Puppet: I would love a Yacht or at least a 25ft sail boat.
I dont think it's excess now a gold toilette.... something different.
@Trai_Dep: One of the guys who walked away from Enron with the most money was a guy named Lou Pai. He was not a CEO or CFO or COO, he just one of Enron's more "profitable" divisions.
He now owns more land in Colorado than anyone else save one person. His very large piece of private property has a 10 000 foot high mountain on it.
You don't have to be right at that top to make ridiculous amounts of money, you just have to reach that inner circle.
@pecan 3.14159265: Indeed. If anything, I feel like the Consumerist should be posting this as a buyer-beware warning against big ticket purchases in a down economy.
Instead it's used to generate populist outrage and mock one of these generic corporate fat cats. I fail to see the consumer advocacy angle here.
@JGKojak: you have no concept of how the world works.
Not all people who can afford Yachts make "obscene" amounts of money.
@Trai_Dep: You need to re-examine the 50 million people who can't afford insurance statistic. That is the total number of Americans who don't have insurance. It includes those who "self insure" and those who don't want it to begin with. Most of those 50 million Americans make over 50 K a year and could afford health insurance if they wanted to.
Everybody here would love to have that amount of money, if you claim you don't' you're what the late George Carlin would call a "full of shit" person.
@JGKojak: @Skankingmike: And certainly, there are a great deal of extremely wealthy business men and women who use their money to contribute to society, not just through their business ventures, but through their personal goals. Richard Branson comes to mind. Not only is he an advocate for space technology and innovation by actively funding research, he is also taking a significant interest in the conflicts in Africa, not just putting money where is mouth is, but also by visiting, spending time with the people there, and actively participating to at least try to make it a better place.
The man owns his own island, and probably a bunch of yachts, but it doesn't make him evil or terrible, and it doesn't mean he stepped over everyone on his way to the top either.
After reading how a health insurance executive could afford a large yacht I want him to suffer. All sarcasm aside this is nothing more than a puff piece trying to stir up populist outrage. To be frank the poor better kiss the rich's a** because the top 1% paid more than 40% of the nations income tax. The top 5 % paid 60% of the nations income taxes. If 5 % of our country left the America would be bankrupt overnight. I know the commenter's want my sources so here it is. [www.economistblog.com]
@TomCoughlin: Er. We wouldn't be crying for a refund. We'd be telling him "them's the breaks" and advising him to file as a creditor in bankruptcy court and hope to get money back.
In fact a similar story was just published on consumerist last week having to do with gift cards and K.B. Toys.
congrats consumerist, for completing the change from useful consumer advocate to pointless class-baiting populism. Are you trying to get a job in the white house?
@JGKojak: And the notions that 1) karma is life dealing out punishments for past behavior and 2) yacht deprival is a karmic blow are both pretty misguided.
My question is why a "health care executive" has $20M to blow on a boat.
WE NEED HEALTH INDUSTRY REFORM *NOW*
@pecan 3.14159265:
You know where he got the money for the yacht? Denying health care claims. Boo-hoo.
I paid this man $1 million to craft the world's smallest violin, but he declared bankruptcy halfway through the job! How will the world be able to show their sympathy for me now?
The story goes on to tell you how to avoid such pish posh...
I have to say, that turn of phrase made my week.
This story sounds a bit like sarcasm and it's pretty funny.
@pecan 3.14159265 (and also Megan Squier, Pink Puppet, ZekeSulastin): Yeah, it's a business deal and it's a bummer for this guy that it hasn't worked out. Losing twenty million dollars in a failed project sucks.
And it is true that if we were talking about someone of limited means (i.e., someone for whom $400 holds the same kind of significance that twenty million dollars holds for the person in the first example) who lost money when a gutter cleaning company went out of business, we'd consider it to be more tragic. The fact that gutter cleaning is more of a necessity (only "more of," since it's not really a life or death sort of thing) than buying a yacht and the degree of hardship endured by the individual suffering the loss both play a big factor in how that evaluation is made.
On an theoretical level and at a great deal of remove from emotion, compassion and empathy, losing twenty million dollars and losing four hundred dollars sort of seems like similar events. In practice, though, the vast majority of people will not feel these two situations are similar.
What's really interesting about this dichotomy is that both of these opposing perspectives on what constitutes justice in this situation wind up treating at least one of the parties roughly. I would offer that this kind of treatment in the name of justice is probably better guided by empathy and compassion than it is by theoretical detachment.
To quote from Dreamscape: "Have a heart."
What a terrific send-up to those disgusting, upper crust, fat cats whining about throwing away money on a yacht never delivered. And the fact that people lost their jobs manufacturing his boat, that's just icing on the cake! They deserve to be unemployed for making such a luxurious product.
Class warefare is quite en vogue these days, but what some people fail to realize is when wealthy people don't spend money, there are considerably less wealthy people that suffer.
@TEW:
Yeah the rich are just fountains of wealth that spring forth like a gushing oil well. They create wealth all on their own. Take for example IBM. There's a rumor that they have engineering teams all over the country -- in Austin, in Rochester Minnesota, in Vermont, in New York -- that work hard every day to design their computer hardware and software. That's a myth. It all flows from the CEO.
@WiglyWorm: Not sure what you're talking about. I didn't say anything about "crying for a refund." I think it sucks for him, but as you say, them's the breaks.
I was commenting on the tone of the post, using the article to mock the guy (the consumer) just because he's wealthy. Yeah, it's a ridiculous article to begin with, but you see these all the time (the NYTimes is a repeat offender). As I said, I just don't see the consumer advocacy angle.
@TEW:
Based on a study by USC in 2001, the top 1% raked in over 33% of the total income in the US. But, that was 2001, before the Bush tax cuts came into play. I wonder how much it was after that? I'm guessing pretty much in line with how much they made.
I understand where some think it isn't right for people to pay "a greater burden" but even John McCain when he was running for the ticket in 2000 said that if you make more you should expect to pay more for your luxury.
three words: health care executive.
Trust me, try thinking of him and his $20,000,000 floating pleasure palace that will never be on the next article on this site about a health care company. I am sure that you will feel he's the REAL victim.
This reminds me of a case study from my Macroeconmics college textbook in which the government tried to extract more money from the rich by adding a tax on yacht purchases. This, of course, increased the price of yachts, which decreased the demand (simple demand curve working here). Blue collar workers who made the yachts ended up being the ones hurt the most because the lessened demand led to job cuts. We need to remember that even measures designed to "punish the rich" can have unexpected and negative consequences even on the middle and working classes.
How many people working in the yacht industry could have been paid with that $7 million the exec was still willing to shell out had the yacht maker stayed in business?
@lannister80: I know it was a rhetorical question, but it's a pretty easy answer: He's got that much money because that's how much the market has deemed his job worth. Contrary to what the government and much of the country seems to think, administering health care on a national scale is not easy. He got paid a ton of money to do it because the skills and willingness to do such a job are hard to come by.
But not sure why I'm bothering to try to explain supply and demand to you. I can see by your Caps Lock that you're already well informed on the subject.
@Lameth:
If you read the source I give it is from 05 IRS data. In 05 Bush's tax cuts were in effect. I don't think it is right for 95 % of this country to pay less taxes than 5 %. There is a reason why John McCain lost the election and that is because a lot of conservatives did not vote for him. I don't know how you can justify the tax burden discrepancy and then still complain that the rich are not paying their fair share.
@lannister80:
Congress makes 250 K a year and they have a pension guaranteed after 1 day in office. They voted last year to give themselves a 4 K raise and you think they will be less greedy than a CEO. I am reading the figures that the government predicts nation health care will cost us and it is insane. The baby boomers will be taken care of by my tax dollars and there will most likely be no money left for me by the time I need it.
@White Speed Receiver: That is indeed what has happened. Many charities are finding themselves in serious financial difficulty currently because of it.
Not that it's entirely a bad thing. Some of them are thinning out their overhead (staff) and re-evaluating their expenses and becoming more efficient.
@unobservant: The number is 1-800-DOCTORB. The extra "B" is for Bargains, incidentally, not Bankruptcy.
Yachts are always better when you make them yourself.
If I had that money I wouldn't buy a yacht. I'd buy a big house and fill it full of books. :) And I'd travel.
I'm not sure how he is going to get his money back for the boat. There's not much they can do if there's no one left to build it, or they're broke.
@rpm773: hah I would love to just have a million (after tax) dollars hell I'd settle for all student loan debt paid off.
Alot of the mega yacht building hinges on the "mine is bigger than yours" deal...
Typically any yacht under 90' is built in a boat manufacturing company. Over that length is into ship yard one-off territory.
The guy paid for the ship and didn't get it since the yard when into bankruptcy. He should be on the list of creditors...
In his case, though, all is probably not lost. I would imagine that he is entitled to the portion of the yacht that has already been built, so he can probably have it shipped to another yacht builder to have the project finished. It will cost more than $27 million to complete it now, but instead of $20 million down the drain, it'll probably only be a few million over budget.
Sucks though- you'd expect better service for $20 million.
@pecan 3.14159265: It might just be a matter of interpretation. Yes, it sucks that he won't get what he paid for, but that doesn't mean I'll pity him when it was a lavish luxury purchase.
The real issue to me is, is it really newsworthy when compared to all the people who are out of work and losing their homes? What kind of reaction did the author expect to this article? It reeks of class disdain of the opposite variety.
@Skankingmike: you have no concept of how the world works.
all people who can afford $20million Yachts make "obscene" amounts of money.
Well, in the case of the yacht, the man paid for a yacht and was given nothing. If he paid $400 for gutter cleaning, and the gutter company went out of business, we would be crying for retribution - but if it's a yacht (because we can't have one ourselves) we don't care, and tell the guy he can take his half-finished yacht and go away.
True sign the recession is hitting the wealthy? Repurposing the butler to finish building the yacht.