Despite not winning the Mega Millions lottery yesterday, I am at least 90% certain that my wonderful wife and I have a net worth that places us at least in the 90th percentile among US households. I am 100% certain, however, that we are not in the 99th percentile.
That state of affairs is fine with us although, of course, we would like to be in the top one percent; that’s one reason we play the lottery. However, I do not begrudge people who are wealthier than I am. As I have written many times, I feel very strongly that being resentful and envious of people who are wealthier is not a sound basis for public policy.
Where we live, though, we see evidence of many people who may indeed be in the top one percent. Consider this car, for example, that is available for sale not far from where we live and is just one of dozens, if not hundreds, of luxury cars available at this complex:
That is a Ferrari 812 Superfast available for purchase at the Ferrari dealer in this complex of Lamborghini, Bentley, Aston-Martin, Rolls-Royce, Maserati, etc. While the seven-figure cars usually take awhile to be sold, the other cars are moved with surprising speed. For example, all eight Maserati MC20s that were available at the Maserati dealer have been sold, supposedly, before the cars were even on the lot. The MC20 is roughly a quarter of a million dollars.
Someone is buying cars of this genre because we see them driving everywhere. It is not an exaggeration to say that I see more interesting cars in 4-5 days here than I would have seen in a year in the mid-Atlantic.
This past weekend my wonderful wife and I went to an open house, of sorts, in an exclusive, gated golf community, which again, is not far from where we live. The house we saw was huge: about 10,000 square feet in the main house plus a 1,000 square foot casita. I wish I had taken pictures.
Of all of the amazing things in the house, the one that stood out to me was the two-level, seven-car garage, of course. The garage had a lift so four cars could be parked inside the house, basically, and the other three in the traditional garage space.
We were far from the only people looking at this house and it seemed to me that some of those looking were seriously considering buying it. What do they say? If you have to ask how much then you can’t afford it. How about $7 million…of course, the house would come fully furnished with everything that is currently in the property. No, we can’t really afford a $7 million house. Again, next to the lap of luxury.
In our zip code, 64% of the population 25 and older has at least a bachelor’s degree. Over one quarter of that population has a graduate degree like me; in other words, over 40 percent of the people who have more than a high school diploma have a graduate degree. Oh, the median age of the people in our zip code was, at last estimate, 60.1 years.
Combine people who have college degrees with time to amass wealth and voila!, a community that drives Ferraris and buys seven-figure houses. Again, nothing wrong with that in my book.
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8 thoughts on “Next To The Lap Of Luxury”
When I was in Hong Kong, Bentley introduced the latest version of the Mulsanne. There just happened to be a Bentley dealer near my hotel, and my girlfriend was over for a visit from the states, so we decided to go and take a look. The car’s official launch was a day earlier; to my surprise, the dealership was empty. When we entered, the salesman was very gracious, and answered all of our questions. He then asked if we would like to sit in the car. In the states, you would be lucky to look at a car like this, much less sit in one.
After falling in love, I said that I bet they would do well with the model. He laughed and told me the dealership had already sold FORTY TWO! The estimated grand prize for one winner in Friday’s MegaMillion drawing is $515 million…
Thanks for sharing, Doc. Yes, the well-heeled are usually the well-connected and know about luxury items before almost anyone else.
As for the Mega Millions I focus on the after-tax take of the cash value, which is roughly $175 million. In a high-tax state, that number would be less, of course. That kind of money could buy you just about anything you want.
Going off on a tangent…if one wanted to be very conservative, one could splurge with the first $25 million of that money. It would be easy in Arizona to construct a muni bond portfolio with FIVE percent coupons with the rest. Five percent of $150,000,000 is $7.5 million a year, supposedly tax-free although I guess AMT might say differently. Still, with that kind of windfall I personally would not put any of it at risk as you could easily live off the interest for the rest of your life. Actually, $150MM wouldn’t buy you bonds with a face/par value of $150MM because AA/AAA Arizona bonds are selling for about 110%-115% of par. Still, you would be set unless you went completely crazy.
Arizona muni bonds are the way to invest as I speak from experience. I will leave it at that.
Where can you drive a Bentley Mulsanne in Hong Kong?
Thanks, Philip. As for your question: David Banner (not his real name), care to weigh in?
Hong Kong is home to many luxury/super car owners, and outside the city you can have nice drives. One famous hotel there had a fleet of Rolls Royces at the disposal of its guests. Of course the most efficient way to get around is by Metro or taxi.
Thanks for replying, Doc.
Wow! A stacked garage… I’d say shut up and take my money, but they would take it all and I wouldn’t have enough to complete the purchase. >grin<
Thanks, JS. What is life without dreams?
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