Inflation hits billionaires too…

We’re all seeing the impact of rising prices, but some products and services used by the wealthiest among us have seen eye-watering increases in the last twelve months.

Forbes magazine has been charting a basket of luxury items in its Cost Of Living Extremely Well Index (CLEWI) for 40 years.

As this chart shows, their inflation rate in 2021 was 10.1%, twice the rate of the official CPI and the highest since the financial crisis of 2008:

Forbes CLEW Chart 2022 Monaco Real Estate

Despite the pandemic, or maybe because of it, demand was up in many categories. Classic car expert Iain Tyrrell talks of ‘bored billionaire syndrome’, where enforced restrictions on their movement caused many to focus on extending their supercar collection almost irrespective of price.

We’ve all heard about supply chain disruptions – these have impacted the top end of the market just as much as the middle. So raw material increases are passed on as higher prices to an audience that is unfazed by what economists call ‘price elasticity’.

Not surprisingly given the bespoke nature of many of the items in the CLEWI list, labour shortages have had a big impact on prices of high-end services. The net of all this has been some enormous variations in the level of inflation from one category to another and between specific products in each category.

The Worst Offenders  

Prices are in dollars but it’s the percentages I want you to focus on:

Olympic-size swimming pool by Mission Pools of California – $3.25m, a rise of 52.9% in 12 months

Facelift by an experienced New York cosmetic surgeon – $32,500, up 51.2% in a year

Royal Oak watch by Audemars Piguet of Switzerland with stainless steel case and bracelet, $23,900 an increase of 34.3% in 12 months

Oyster 595 sailing yacht – $3.4m, a rise of 30.8% in 12 months

Catered dinner for 40 people by Ridgewells of Maryland – $9,800 a rise of 16.7%

Men’s shoes – black calf wing tips, custom-made in the UK by John Lobb, $6,803 up 12.8%

New York psychiatrist 45 minutes session – $450, an increase of 12.5%

12 cotton bespoke shirts by the UK firm Turnbull & Asser $9,360 up 12.2%

Viking 75 motor yacht – $6.85m up 11.2%

Louis Vuitton bag – Keepall Bandouliere 55 travel bag with strap $2100 up 10.5%

In season flower arrangements for 6 rooms per month by Jerome Florists of New York, $9262 up by 10%

Inflation Beating Bargains Waiting For Your Order:

One year’s school tuition, room and board at Groton School, Massachusetts up 1.5% to $59,140

Rolls Royce Phantom with extended wheelbase, up 1.9% to $545,000

Eight-person sauna in Nordic Spruce by Finnleo Sauna of Minnesota up 2.7% to $19,500

Ebonized Model D concert-grand piano by Steinway & Sons, New York – up 3% to $187,100

One year’s university tuition, room & board, fees and insurance at Harvard University, Massachusetts – up 3% to $78,568

Learjet 75 Liberty by Bombardier of Canada – no change at $9.9m

Caviar – Kilo of Petrossian Special Reserve Ossetra caviar – no change at $12,900

Black jersey dress with horsebit trim by Gucci – no change at $2,700

Russian sable coat at Neiman Marcus – would anyone buy it even at the unchanged price of $87,000?

Cigars – Box of 25 Davidoff Dominican Aniversario Double ‘R’cigars – unchanged at $877.50

All data is courtesy of Forbes magazine who helpfully remind me that the cost of a subscription remains unchanged in the last 12 months.

It’s good to know there’s value out there somewhere, even for billionaires.

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