According to a new survey by Bank of America U.S. Trust, the bank’s private wealth management arm, many wealthy individuals in the U.S. start saving in their teenage years. The report, “Insights on Wealth and Worth,” surveys nearly 700 people and offers an inside look at the attitudes and behaviors of ultra-high-net-worth individuals. The survey’s respondents have at least $3 million in assets, and 30 percent have more than $10 million.
.. What is rare is the average age when these individuals started working and investing in stocks—15 and 25 years old, respectively.
.. On average, the survey’s respondents estimated that 52 percent of their wealth came from income, while 10 percent came from inheritance, and 32 percent from investments.
.. Data from the U.S. Bureau of Economic Analysis indicates that the national personal saving rate—the percent of a person’s disposable income that goes into savings—is currently 5.4 percent. However, for America’s wealthiest 1 percent, that rate is as high as 51 percent.
.. So why are the wealthy so good at saving money? It’s not just that they have ample funds to do so. Researchers who study the wealthy have long suspected that it might have something to do with the way wealthier parents teach their childrenabout money
How Wartime Washington Lives in Luxury
It is common knowledge that Wall Street and its inflated compensation packages have remade Manhattan into an exclusive playground for the rich, just as tech moguls have made San Francisco unaffordable for the middle class. It is less well known that the estimated $4 trillion spent since 9/11 on the war on terrorism and billions spent on political campaigns ($6 billion on the 2012 elections alone) have trickled down so extravagantly to the New Class settled around Washington’s Beltway that they have remade the landscape of our capital.
The perfect storm—hundreds of billions in federal procurement dollars flooding into the area after 9/11, along with the easing of corporate campaign fundraising thanks to the now infamous Citizens United decision—has deepened the trough for lawyers, lobbyists, consultants, developers and contractors.
.. Further out, there are the rooted, old-money neighborhoods of North Arlington, McLean, and Potomac in Maryland, where the Washington establishment began migrating in the 1970s, and now overloaded with “the better heeled sort”—government executives, surgeons, politicians, venture capitalists, think tankers, lobbyists, and fundraisers who have made it. Just outside the Beltway are places like Great Falls, where the median home price is $1.3 million. In 2011, according to a Washington Post feature about the rewards of the contracting boom, 16 percent of Great Falls households were earning $500,000 or more a year and at least more than half made $250,000.
.. He says even more than the strivers of Arlington, and the settled elite of the inner burbs, this metamorphosizing sprawl represents everything that is perverse about the last 15 years—the war machine, the big money politics, the hubris of the one-percent, and the brutality of losing, as professions that did not so easily escape the recession, left people unemployed, foreclosed, and priced out of an area they once called “home.”
.. “Loudoun is per capita the richest county in the country as well as one of the most Republican and is something of a world headquarters of the McMansion as a lifestyle statement,” Lofgren writes. Living in these totems of new wealth, he says are “executives of Beltway Bandit firms, totally dependent on the federal government for their livelihoods,” pretending “to lead the life of a free Jeffersonian squirearchy.”
.. From 2009 to 2015, Virginia received $295 billion in federal contracting dollars. That’s more than the annual budgets of entire countries, including Saudi Arabia, Belgium, and Sweden. This has resulted in not only an exploding real estate market, but the wealthiest counties in the country, year over year.
Withering on the Vine: Martha’s Vineyard
Martha’s Vineyard is a resort whose population swells each summer as the wealthy return to their vacation villas. It is a place of yachts and celebrities and fussy topiary, of waterfront mansions and Ivy League professors and closed-off beaches. It is also a place of moral worthiness, as we understand it circa 2016. The people relaxing on the Vineyard’s rarefied sand are not lazy toffs like the billionaires of old; in fact, according to the Washington Post, they have “far higher IQs than the average beachgoer.” It is an island that deserves what it has. Some of its well-scrubbed little towns are decorated in Puritan severity, some in fanciful Victorian curlicues, but always and everywhere they are clad in the unmistakable livery of righteous success.
.. After all, Bill Clinton didn’t need to take a poll to know to vacation on Martha’s Vineyard. For a man of his educational and generational background, that was an obvious choice. That was where everybody went. It was the place where the high-achieving, rock ‘n’ rolling generation that Bill led came together with the money people whose wisdom he and his well-graduated cohort had grown to understand.
.. Wolfe doesn’t mention the fantasy of an all-powerful “creative class” or the universal liberal conviction that you must have a degree from a “good school” to make any sort of legitimate claim on the affluent life; those toxic doctrines would take decades to develop.
.. But in some ways the Vineyard idea, as Wolfe sketched it out forty years ago, undergirds them all. The union of money and talent, under a veil of righteousness furnished by the backwash of the sixties counterculture, allowed our left party (such as it is) to walk away from its historic obligations to working people.
Our Martha’s Vineyard Democrats like to talk about inequality. It makes them sad, but it’s also a problem they have almost no desire to tackle. Not only does it not touch them personally, but their instincts, their inclinations, and their deepest unspoken convictions tell them it isn’t a real problem to begin with. People get what they deserve out of life—or, rather, they will get what they deserve once we have ensured everyone’s equal access to the SAT
.. Think about that for a moment: a blue-collar worker who has retired fairly comfortably, despite having spent years confronting his employer on picket lines and in grievance hearings. How is such a thing possible?
Where’s My Mercedes? Egypt’s Financial Crisis Hits the Rich
Wealthy Egyptians were among President Abdel Fattah el-Sisi’s most ardent supporters after he seized power in 2013, favoring stability and a harsh crackdown on Islamists, even at the cost of civil liberties. But that loyalty is being tested now, as Egypt’s severe shortage of foreign currency cripples businesses, impedes luxury imports and crimps their lifestyles. And that has prompted a tide of unusually sharp criticism of Mr. Sisi.
.. Mr. Sisi is using what scarce resources he has mainly to help the poor — and the seven million people on the state’s payroll — by propping up the value of Egypt’s currency.
.. “No class or demographic is happy now, from Alexandria to Upper Egypt. Sisi isn’t satisfying anyone.”
.. The country’s tourism minister says that the slump has cost Egypt $1.3 billion in revenue since then, and that the number of visitors to the country was down 44 percent in January.
.. Egypt’s Gulf allies, like Saudi Arabia, used to give the country generous aid — some $30 billion in the first two years of Mr. Sisi’s rule — but since last summer that has slowed to a trickle.
.. General Motors has a car plant in Egypt, but it had to temporarily halt production recently because it could not get the parts it needed. Foreign airlines have threatened to curtail flights to Egypt because of rules blocking them from repatriating profits. For a time, British Airways stopped selling tickets in Egyptian currency.
.. Still, there remain plenty of Egyptians, rich and poor, who continue to see Mr. Sisi as a bulwark against the instability that has roiled other countries in the region.