I am a millionaire. It sounds grand, but nowadays does not mean very much. Anybody who owns an even modestly sized house in London has assets of more than a million. That's the conventional measure of what it is to be a "millionaire", although there is no strict methodology. So far as the Oxford English Dictionary is concerned, the term goes back no later than 1826 and is defined as "a person possessed of a 'million of money' as million pounds, dollars, francs". That's exactly what I feel. Once you are into six-plus zeros, I am indifferent to the actual currency.
But, by 2007, the concept of millionaire has been inflated to near meaninglessness. The old graffitto "as soon as I find out where it's at, they move it", now applies to the idea of being rich. Today, a million in assets – even unencumbered assets – is scarcely a measure of great wealth. When a studio flat in Clapham costs £250,000 and the private bank Coutts expects all new account holders to have £500,000 liquid, a starter-pack seven-figure income does not go very far. Maybe a million in annual income is what we need to qualify. I asked Dennis Hall of Yellowtail, a financial advisor that specialises in the care and maintenance of the prosperous, how much money generates a million a year. He said, "Around £35m would create a return of about £1m, with scope for annual increases in line with inflation and preserving the capital value. This assumes a mix of assets, an overall tax rate year-on-year of 30 per cent and a 4-per-cent net yield."
Fazed by this numerology, I then asked a simpler question. How much would I need to feel comfortable? Hall told me: "That's more difficult. A comfortable, but still careful, lifestyle needs assets of £5m. Double that if you are in London. To make the bottom of The Sunday Times Rich List you need £70m. To be a global player, £200m and rising."
So this puts the merely rich in a curious position and begs other questions of definition. The magazine publisher John Brown is a friend of mine, the only person in my own circle who has actually made (as opposed to inherited) a lot of money, having sold his business for more than £20m. I asked him if he felt rich and he said of course he did.
I started thinking, well, obviously, you have a lot more money than me, but what does it actually get you? You'd be stretched to buy a decent plane (a Boeing Business Jet, a personalised 737 known as BBJ in the trade, is about $35m depending on the depth of the carpet specified) and a lot of London's spiffier apartments would be out of reach. A decent car, eating out and frequent foreign travel? Yes, sure, but even ordinary millionaires like me can do that. What this means is a new species of hyper-rich is emerging. The man with assets of a couple of million has more in common with the man with £20m than the latter does with the possessor of £200m. This is the group that leads lives at once furtive and extravagant, occupying a parallel universe where the gravity of financial responsibility does not operate. One London member "forgot" his Maserati in a municipal car pound . Another in New York made his plane turn around mid-Atlantic to pick up the dry cleaning.
Forbes magazine (whose corporate jet is called Capitalist Tool) estimates there are 946 dollar billionaires in the US alone. A billionaire being, for those of us still struggling with the concept of millionaire, someone with assets of more than a thousand million. And Capgemini's World Wealth report for Merrill Lynch says the planet's 9.5m "High Net Worth Individuals" control assets of $37.2 trillion. At this stage, I get confused, but the interesting question is: what do the HNWIs do with their money? And there's a subsidiary question too. Do they enjoy themselves? We'll come to that at the end.
There is a vast amount of new money around, with spending to match. Often the money comes from what Robert Frank in his book Richistan calls a " liquidity event", or a buy-out. But other sources of new wealth are powered by credit policies so brainless that even George Bush can see the problem. At the end of all the syndicates and derivatives and abstractions stands a forlorn rust-bowl NINJNA (No Income No Job No Assets) whose imploding finances threaten to suck us all into the abyss. Martin Taylor of Barclays looks forward to a period of "more attractive normality". While every bank wants to get the debt off its balance sheets, the idea of ultimate liquidity is being exposed as a cruel delusion. We might be on final approach to a very heavy financial landing, but there are still new fortunes being made. Naomi Klein's new book (a scary must-read in proof form over the summer for HNWI New Yorkers) is called The Shock Doctrine: Rise of Disaster Capitalism. Maybe the system's ability to re-invent itself profitably meets its keenest challenge with the collapse of the system itself.
Still, Rome is not yet in flames. And before it starts ' burning, there is some interesting fiddling to be observed. Ferrari is not boarding-up its rapidly expanding dealer network. They cannot keep up with demand: for many models there is a five-year waiting list. This conforms with Veblen's principle that wealth, or a certain sort of wealth, has always sought to distinguish itself through acquisition and ostentation. Once it was through antiques. When decorator Elsie de Wolfe fitted out the Frick apartment with cabriole tables and chiffoniers, one wit described the coming together of cultures as "the introduction of old French furniture to new American money". The phenomenon was adroitly described by ThorsteinVeblen who, in his 1899 classic, The Theory of the Leisure Class, gave us the priceless concept of "conspicuous consumption". Veblen also said there are "pecuniary canons of taste". Oh, yes there certainly are.
US networks are running a satire called Dirty Sexy Money. The birth of the hyper-rich has distorted the luxury goods market. Jeffery Miller, my Manhattan coolfinder, tells me new shoes are now $1,000 average, boots $2,000. Sunglasses have passed $500. There are watches that cost $600,000. In London, Selfridges has just opened a Wonder Room. Here you can buy a Vertu mobile phone for £53,000 or, at the Enomatic wine bar, you can drink (literally) a sip of 1999 Chateau d'Yquem for £9.99.
Conventional notions of luxury are exhausted, as Dana Thomas has pointed out in her recent book Deluxe: How Luxury Lost its Luster. The great Paris luxury brands – Hermes, Cartier, Louis Vuitton – were founded to cater to the French court, but now they are high-end mass-market for the airport trade. The small ateliers who produced these luxury goods have morphed into global marketing machines. Anna Wintour of US Vogue says this means that "more people are going to get better fashion", but it also means that the very rich are going to have to find more efficient ways to distinguish themselves. The laws of conspicuous consumption demand constant upgrades: if anyone can afford to purchase a Prada backpack, then this creates a new demand for a Cavalli cocktail dress at £20,000. A new generation of Very Light Jets (VLJs) will soon make private planes accessible to anyone who can afford the repayments on a big Mercedes. Expect demand for corporate airbuses to rise.
New money has changed the art market. Values in art were once determined by critics, connoisseurs, dealers and the type of collectors who had more in common with the Duke of Buccleuch than with a Brooklyn hedge fund manager. That has now changed. Art has become what money men call a new asset class, joining property, stocks, bonds derivatives and warrants. Niall Hobhouse, the distinguished St James dealer, explained "the art market is behaving as if it is all about commodities. There has been an explosion in the numbers of people buying art." And they are all ingenues.
I asked Hobhouse what it would cost to build, for example, a collection of 17th-century Dutch landscapes if I was fortunate enough to have benefited from a recent medium-sized liquidity event. Hobhouse did not hesitate and said about 40 to 50 times as much as it would have cost you in the 1970s. He then added: "and it would still not be a first-rate collection". I could have some Ruisdaels or Hobbemas, but Vermeer and Rembrandt would be well out of reach.
But while values in art also used to be determined by rarity, now they are determined by celebrity. Damien Hirst brings celebrities and commodities together in a carnival of high-end consumption. His diamond-encrusted skull, called For the Love of God, because that is what his long-suffering mother said when he explained what he was doing, is a perfect example. Hirst invested maybe £15m in production and it is rumoured that a consortium of investors has bought it for $100m. That's a return on capital that would shock even the most jaded banker from his luxury-induced torpor. And there is nothing to stop Hirst doing it again.
New money is having a noticeable effect on architecture too. In New York, the HNWIs are now tiring of their glassy modernist penthouses or their traditional Park Avenue co-ops. Instead, the most talked-about new residential development is a limestone masonry block at 15 Central Park West, designed by one of the chief wizards in the den of postmodernist kitsch, Robert AM Stern. For developers the Zeckendorff brothers, Stern has created Edith Wharton-era apartments with casement windows and 14-foot high ceilings (tall enough for a chandelier). HNWIs are queuing at $20m a pop.
In London, developers Candy & Candy sell hyper-luxury apartments (" the rich don't do stairs"), complete with art included. It is said that the most expensive apartment in their new development on the Bowater House site in Knightsbridge has been sold to an ex-mayor of Moscow for more than $80m. And the same competitive new money has driven the genteel old money out of Kensington and Chelsea. You now find boards from Hamptons and Savills in parts of London south of the river where the winos used to lurk. Old money is now new poor.
But there's some sort of law of inversion operating too. To match the established concept of conspicuous consumption, there is now conspicuous distribution too. Many of the HNWIs are getting competitive about giving their money away. Financier Peter Cruddas has pledged to give £100m. This antic charity is the final phase of the experience of wealth known as " the arc of maturation": the new wealthy are first cautious, then conspicuous, then philanthropic.
But let's not forget Stealth Wealth. A Washington Post survey found that most "real" millionaires don't wear a $5,000 watch or drive brand-new BMWs. That's the car for their trust officer or broker, today's equivalent of below the stairs. There's a Texan saying, traditionally attributed to a dirt-covered dude resting on his dented and dusty truck surveying several thousand acres of his own ranch: "Big hat, no cattle". Sometimes the seriously rich enjoy disguise. Ikea's Ingvar Kamprad likes to fly economy.
So I went back to my friend John Brown and asked him what difference money made. What was it actually like to become rich? He said: "I am much, much richer than it ever occurred to me I would be. But not 'never have to think about it' rich. For that you would have to be worth well north of £50m. I am pleased about that as that amount would take me into the private jet and lots of houses situation, and that would be outside my social and psychological comfort zone. I am also very glad I did not inherit any money as it is the change in your financial circumstances that is the fun bit. All of the clichés are true. Money cannot make you fundamentally happy or fulfilled, but it can buy nice cars, nice houses and comfortable holidays, all of which make me happy... for a while."
Many years ago, I asked Terence Conran a similar question. What was, if he was being honest, the big advantage of owning squillions ? He replied: " It makes getting through airports easy." Well that's all a thing of the past. When it comes to airports, there's a terrible democracy of discomfort. We mere millionaires, meanwhile, may take comfort from Oliver Goldsmith's remark: "the greatest riches are ignorance of wealth".
Anyway, Miuccia Prada used to be a Communist.
The Hedge Fund Manager: Bertrand Des Pallieres
Thirty-nine-year-old French millionaire Des Pallieres runs the £170m SPQR Capital hedge fund, based in London. He was recently in the media spotlight for running up thousands of pounds in motoring fines after abandoning his £80,000 Maserati in a car pound for three months – he claimed he was too busy to come and collect it. He is currently separated, and lives in London, close to his three children.
I graduated from business school in 1992. What attracted me to trading was the fact that the sky was the limit in terms of what you could achieve. I joined JP Morgan in Paris. Six months later they sent me to London; and here I've stayed.
It was high pressure and very long hours. And in my earlier years, there was a lot of partying, too. When I started getting my first bonuses, I was quite young, and wanted to experiment. So I began going out a lot, and going away to amazing locations with colleagues, just for the weekends. We'd stay in great hotels such as the Delano, in Miami.
We also partied around Europe, too. In St Tropez, you have a number of these high-end bars on the beach. And at the time, La Voile Rouge was the big party place to go to. One night we were sat next to a table which had Bruce Willis and his entourage on it. We ordered lots of Cristal. Our bar bill at the end of the night was bigger than his. The banker crowd these days are more stable; there's less splashing of money. I'm more conservative now, too. But it's not like I'm completely austere: if I like something, I'll buy it. If I take my children on holiday, then I'll take them somewhere nice.
For the past two years, I've been going down to St Tropez for the summer, where I have a lovely place near the beach. There are staff there, and we have a chef, too. In the winter, I like getting on the plane on a Friday night and going to a tropical island for the weekend; somewhere with a private beach, and a serviced apartment, with staff. In London, I don't have time to cook, so I eat in restaurants. I love all the Japanese places, such as Nobu and Zuma. I have relationships with these restaurants, so getting a table isn't hard.
Many people I know have much bigger spending habits than me, though. Several of my colleagues have owned yachts; one guy owns a polo team. I am much more likely to spend a lot of money on an investment. I bought 4,500sqkm of oil field in Kazakhstan a few years ago. We're in the process of proving probably several hundred million barrels of reserves, which would provide a pretty good return.
This thing about my car kind of annoys me, because even though I enjoy material possessions I don't care about them. Money for me has always been about freedom. Five years ago I reached the position where work was a choice, rather than an obligation. My money has given me the luxury to start a new business without any worries. If I want to do something, I don't have to ask anybody's permission.
But there is a cost if you want to achieve a lot. Now I'm running my own business. Work never completely stops; you end up blending your personal life with your business life. Even if I take a weekend away, I'll still have business meetings. There's not enough time with the children, and I have an ex-wife. But I don't regret any of it. Adam Jacques
The Techies: Michael and Xochi Birch
Hertfordshire-born Birch, 36, met his American wife, 35-year-old Xochi, at university in London. The couple began developing websites in 1999 and launched the social networking site Bebo in 2005. It now claims 35m members and the Birches are worth an estimated £150m.
We started our first business in our bedroom and had to live a cheap life. We could pay the bills and always had food, but we had no TV and couldn't spend money.
Initially we wanted to be self-sufficient and have the same lifestyle as before, when we had good IT jobs. It took longer to reach that point than we thought – about four years.
I often read about the offers we've supposedly received for Bebo, but we haven't seen any briefcases full of cash yet. If they appeared, it would depend how big the suitcase was and what size the bills were.
We could live a more lavish lifestyle than we do, but we try to stay grounded. While we don't struggle financially, there's still a lot of work to do. Our biggest luxury is holidays. We went to Cancun last Thanksgiving, to Marbella last July and have just returned from Disneyland with the family. But we're as happy taking the kids to the coast in our caravan.
Our biggest fear if our fortunes were reversed would be getting a job. We've been self-employed for so long now I'm not sure we could work for someone else.
The Russian: Sergei Kolushev
Born to a poor family in Siberia, Kolushev arrived in London in 1989, and set up an event management business, Eventica, in 1996. The 40-year-old hosts the Russian Economic Forum, the largest gathering of Russian business leaders outside Moscow, and is worth about £20m.
I grew up in Siberia at a time when it was a crime to do private business or even to travel around the country. When Gorbachev introduced perestroika, suddenly we had the chance to listen, see and to travel. I went to Moscow and then headed to London, where I arrived with only my passport and £50 in my pocket, and started working in a post room.
When I started making a lot of money, I used to fly everywhere on private jets and go on expensive holidays every month. I had nothing and suddenly I could afford everything.
I've calmed down a bit now but I do have a weakness for watches. I've got lots of limited-edition rare pieces, including a Swiss Vacheron Constantin I bought for my son when he was born – I'll give it to him when he's 18. I won't say what it's worth but it's tens of thousands of pounds. I also like my cars – I've got a BMW X5, Mercedes SLK and an Aston Martin.
There is an unfair stereotype that rich Russians in Britain are all Mafia or billionaire oligarchs like Roman Abramovich. In fact, I'm just a millionaire and Russia is full of other very talented entrepreneurs who started from nothing.
If I lost it all tomorrow, the thing I would miss most is the freedom to make decisions. If I choose to spend two pounds or £200,000, it's my decision and I would hate to be in an office from nine to five – I prefer to be there when I want to.
The Superwoman: Michelle Mone
Brought up in a one-bedroom Glasgow tenement, Mone, 37, launched the patented Ultimo gel-filled push-up bra in 1999. Her company, MJM International, now employs more than 100 people in Hong Kong and Glasgow and is worth an estimated £50m.
When I was growing up I always used to look at magazines and dream of having a soft-top Mercedes. I used to watch TV shows like 'Dallas' and 'Dynasty' and tell my parents that one day I'll have a big house with a sweeping staircase. "Okay," they'd say, "very good Michelle".
Now I can buy what I want. I've got a Bentley and a Range Rover and dedicated underwear and shoe wardrobes. I have a weakness for pink champagne and take extravagant holidays on my yacht in Spain. My biggest luxury will be my new house. It's going to be mega, with a 20-seater cinema, a pool, a night club and everything you could ever want. I take a reasonable wage but I get paid a fortune to speak at venues; anything up to £20,000 for 20 minutes. Sometimes I'll do 10 speeches a month.
But I believe I deserve everything I've got because I've put my life, my house, my marriage and my kids on the line and I give a lot to charity. It infuriates me when people say the super-rich shouldn't be allowed to have so much money. The only people who shouldn't be allowed to be rich are those who give bugger all back.
And if it all went tits up tomorrow and I had to start again, I would be a bit hurt and upset, and it would be a shame not to have the extra cash to help people – but as long as your family have their health and you can afford to clothe and feed them, life goes on.
And you can be rich and be absolutely miserable. We're on holiday at the moment and I was telling the kids how, when I was on holiday as a kid, I used to walk past these big yachts and say, "Wow, look at those people, isn't that amazing." And now we're the ones on the yacht – listening to those boys and girls walking past. I remind them that in the end money means nothing in life – it could all be gone tomorrow.
The Old Money: Guy De Blonay
Born to the illustrious De Blonay family, whose seat is an 11th-century Swiss castle with its own railway station, the 37-year-old moved from Geneva to London in 1994. He set up a hedge fund with New Star Asset Management in 2002 and now manages £500m.Most people think hedge fund managers make obscene amounts of money, which is often true, but if your fund doesn't perform, you get nothing. To succeed is a constant battle and, while what I earn is confidential, I'm satisfied the rewards are proportional to the stress and dedication I put in.
Certainly there are perks. I love to ski. I stay in my Godfather's chalet in Verbier when I go back to Switzerland – and I was at my girlfriend's house in St Tropez recently. Her parents have a yacht out there, so we did lots of sailing and waterskiing. Last year, I went to Hedgestock, a hedge-fund festival at Knebworth House. The Who played and it was a good opportunity to relax a bit and do some networking. But The Swiss way is to lead a modest life; I've worn the same, simple watch for 10 years, I keep a minimalist flat and drive a BMW.
The big drawback with the industry is that my fund is like a machine and I have to be sure it's running efficiently. My biggest luxury is that I live next door to my Knightsbridge office. I find it hard to relax. I can take my body away from my fund, but my mind stays with the machine.
Losing enthusiasm for the job would be worse than losing the money. There would be no reason to carry on.
The Whizzkid: Dominic McVey
East-End boy McVey built his estimated £7m fortune on winning European distribution rights for micro-scooters, selling 11m by the age of 15. Now 22, he lives with his mother and runs Cosmagenics, a cosmetics distribution firm with interests in the Middle East.
I've always wanted to make money. When I was very young my dad told me that if I worked hard and went to university, I might be able to walk on to a plane and "turn left" when I was in my thirties, but I wasn't prepared to wait that long.
If my maths had been better, I reckon I could have made about £30m from the scooters, but I ended up with about £5m by the time I was 15. I then tried to run loads of projects, from setting up record labels to selling toilet seats, and when I was 17, I moved into John Lennon's old pad in Marylebone. I used to go out all the time and spent loads of money, but that's what happens when you're young and have cash.
I still refuse to travel economy – it's impossible to go back when you're used to business class – and I'm the kind of guy that if I want something, I get it. I've got two Porsches and I like my watches. I've got my eye on a Steve McQueen limited-edition 1972 Rolex, but it's about £16,000.
When you come from a background where you have to earn every penny, you have respect for money and think about what you're spending. And I could easily go back there if I lost everything, because I know I could do it again. The money doesn't motivate me any more – I just enjoy what I do. I don't need £100m in my pocket – I've got plenty already. Does it make me happier? It makes things easier, that's all.
The Philanthropist: Sigrid Rausing
The UK-based Sigrid Rausing Trust has donated more than £85m in grants since its foundation in 1996. Sigrid, 45, is the granddaughter of the late Tetra-Pak food packaging tycoon, Ruben Rausing. Now headed by Hans Rausing, the family is worth an estimated £5.4bn.
Growing up the daughter of an industrialist in Sweden in the 1970s, in a society of radical social democracy, was sometimes difficult. When I was about 12, a girl in my class asked me, "What's it like to be a millionaire?" I was so puzzled; I had no idea because I didn't know any other life. But my family didn't fit the popular image of capitalists; my father was eccentric, inventive and funny, while my mother was a staunch liberal.
I feel very strongly about human rights and have been influenced by the American model of philanthropy – more entrepreneurial, perhaps, than the British model, and more interested in civil and human rights than in development. I base my Trust on the liberal values I believe in – human rights, state accountability, and equality for all.
But in one sense the Trust is simply one of the things I do, and I don't reflect on it very much. I certainly don't seek public recognition, and always feel uncomfortable when I'm paraded on a stage. I live a comfortable life, and have cars and houses, and take nice holidays. I'm not particularly thrifty, but I get no pleasure from consumption and prefer peaceful things like going for a walk with my dogs. Much more important to me than any sum of money is my son. I don't even get pleasure from the act of giving, but rather from seeing what the money can do.
I do, however, believe that if you are born with inherited wealth, philanthropy is a way of making sense of it, and creating meaning in a situation that can be bewildering. Supporting projects which help people who need it is important, but it's also a way of managing the existential oddity of being born with money in a world where most people are not. Interviews by Simon Usborne
Hey, big spender
Just how far does a small fortune go? A sliding scale of wild extravagance...
Private Island in Fiji: £17m
A 225-acre tropical paradise with sugar-white beaches and its own private resort is a snip at £17m. The island, which is almost totally encircled by a stunning 5,000-acre lagoon, boasts 20 private beachfront villas, each kitted out with four-poster beds and marble bathrooms. Staff not included.
The 37-metre Trideck yacht from Sunseeker is unlikely to disappoint. The first was snapped up by Formula One team owner Eddie Jordan and only a handful have been built. Each boat includes four luxury cabins and acres of walnut panelling.
Trip of a lifetime: £9m
Nine million pounds will get you a year-long itinerary of a lifetime, starting with a trip to space with Virgin Galactic, followed by a private trekking expedition to the North Pole. Round off the year with a six-week tour of the seven natural wonders of the world – Everest, the Great Barrier Reef, Grand Canyon, Victoria Falls, Rio, the Paricutin Volcano and Northern Lights – flying by private jet.
Private jet: £6m
Many charter companies can now fly you and a select group of friends to Paris for as little as £1,000 per person. But if you'd rather not share, buy your own Learjet. The eight-seater 45 will cruise at 460 knots at 40,000ft, and comes with a full leather interior. Expect to pay at least £200,000 a year for hangar and crewing fees; pilots come in at about £600 a day.
Private art collection: £5m
The sky's the limit when investing in art, but a more modest £5m will secure you a personal art consultant, who will take you on a tour of London's galleries in the hunt for the best investments.
Favoured by footballers, rock stars and the Queen, owning a racehorse is the rich man's way into the sport of kings. Upwards of £2m will get you a Danehill yearling, descended from the renowned Australian champion, while running costs will set you back at least £16,000 a year – much more with a top trainer.
Diamond necklace: £1m
Paris jeweller Cartier's Caraibes diamond necklace holds almost 15 carats of diamonds, including a 10-carat centrepiece and almost 961 smaller stones punctuated by 12 rubies. The one-off piece, was made in 2005 and comes in at a smidgen under a million pounds.
Bugatti Veyron: £890,000
The Bugatti Veyron is the ultimate car to be seen in. The fastest, most powerful and priciest production car has a top speed of 253mph.
Private wine cellar: £700,000
Wealthy wine lovers may wish to invest in a grand place to stash vintage plonk. One London bachelor's cellar includes a humidor and a gun safe, limestone floor and bespoke mahogany racks. A growing number of builders specialising in luxury conversions will knock up something similar for under a million.
A house in the country: £400,000
You'll struggle to get a pile in the celeb-strewn Cotswolds "golden triangle" for less than £5m, but for £400,000 you could snap up a three-bed period cottage in Oxfordshire with views over the grounds of Blenheim Palace.
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