The median price of a home in the United States is $189,000, according to the National Association of Realtors. Then again the median net worth of the American household is $56,335.
Of course, when your soon to be ex-husband gave $150 million last year to Harvard University you might decide your lifestyle should not be compromised. It is what led to the Daily Mail headline, “Hedge fund billionaire’s estranged wife demands $300,000 a month for an around-the-clock private jet in bitter divorce.”
While $300,000 may seem excessive, according to Fractional News, 25 hours per month on a Gulfstream 200 would run nearly $280,000. A Falcon 2000 would be about $320,000. A Learjet 60 would only be about $160,000. However, when you have children, nannies, friends and baggage eight seats may not be enough. It also doesn’t have trans-Oceanic range, which if you read on is a potential issue. In addition to money for chartering a jet, there is $160,000 per month for vacation rentals and all together over $1 million of monthly support being asked for.
The subjects are Ken Griffin with an estimated Net Worth of $5.5 billion, according to Forbes, and Anne Dias Griffin. When they were married at Versailles in 2003 Donna Summer was flown in to give a private concert. In terms of residences, there are “a $15 million penthouse condo at the Park Tower in Chicago, four Palm Beach properties worth $130 million, and a vast Balinese-style, beach-front property at the Hualalai resort in Hawaii which was purchased in 2011 for around $17 million,” The Mail reports. The point is while there is a prenuptial agreement that is being litigated, money is not a problem here. Dias Griffin is already estimated to be worth $50 million.
But is $300,000 per month or $3.6 million per year for private jet charters excessive?
While Griffin is Chicago-based his future ex-wife wants to relocate to New York. A single trip from New York to Hawaii to Palm Beach, Chicago and then New York would eat up the entire monthly allowance.
What’s more $3.6 million against a fortune of $5.5 billion works out to 0.00065 percent of Mr. Griffin’s reported fortune. If your net worth was the aforementioned $56,335 a similar fraction would work out to $36.87. Put another way, the money donated to the Crimson would have covered private jet charters for the next 41 years.
Naturally despite my math the same person who was able to write a nine figure check in 2014 doesn’t want to put down six digits today.
Clearly both husband and wife can buy watches, jewelry, suits, skirts, handbags, briefcases to their heart’s desire. Lavish resort and spa vacation? No problem.
For luxury marketers, stories like this underscore three key points in selling to the Super Rich: Firstly, everything is relative. Secondly, price is rarely a true objection. Finally, when an UHNW wants to spend or not spend money, they can easily justify it either way.
Just being worth $5.5B does not mean that your checking account has 100s of MM available.
Reblogged this on Doug Gollan: Selling to the Super Rich — Ideas, Research and News for luxury marketers.