Billionaires hide wealth and embrace ‘understated luxury’ in the US – 8/2/2023 – Market

Today, writer Truman Capote’s baroque social diagrams look old-fashioned and quaint. In them, what distinguished the reasonably rich from the truly rich were the better vegetables they served: “tiny”.

If Capote were alive today to take advantage of his superiors in society, the details he would likely take into account might not involve the food on their tables—even the wealthiest people order takeout—but rather the Hallstein water they import from Austria, or their computer-operated $15,000 TopBrewer Danish coffee systems, or the hand-embroidered monogram towel sets they order for $700 (R$3,355) at cult Florentine linen shop Loretta Caponi, or even the subtle switches they use to turn off the light.

These days, across gentrified Brooklyn — a neighborhood also known by some as “Hollywood on the Hudson River” that is now home to Adam Driver, Matt Damon, Michelle Williams, Daniel Craig and Rachel Weisz — the wealthy residents of old brick houses [brownstones] District landmarks signal domestic elegance with decorative details like a $220 light switch made by British company Forbes & Lomax.

For the average guy renovating a house, of course, a Leviton light switch, on sale for $22 at Home Depot, does the job just fine. However, the giant five-story homes of Brooklyn Heights, in which the obligatory curtainless windows open onto scenes reminiscent of ethnological dioramas (Exhibit A: Life of the Technocrat in the 21st Century) cannot be considered complete without switches Forbes & Lomax in each room.

“They’re like jewelry for the home,” said David Hottenroth, a partner at architecture firm Hottenroth & Joseph, referring to the elegant 1930s-style switches made from nickel, bronze and brass.

Or are they a home version of Kendall Roy’s Loro Piana baseball cap from “Succession” (remember “Succession”?): insanely expensive, but so subtle you only notice them if you know how expensive they are?

“Nothing goes unnoticed” is a saying often attributed to heiress Bunny Mellon. In fact, the opposite of this is true, unlikely as it may seem. It was in Mellon’s ostensibly modest habit of ordering couture garden aprons from Givenchy and hanging his best Braque in a storage room that it became possible to detect the beginning of the groundwork for what would come to be marketed as “understated luxury”. , according to Mac Griswold, Mellon’s biographer. “That kind of ‘me rich?’ comes from her,” Griswold said.

For the “old money”, as in the case of Mellon, discretion was indeed a fundamental value, while for people of the “new old money” class —that is, large fortunes made, usually with technology, during a period ranging from Myspace to TikTok—the display of wealth is noticeable, but only for those who know what to look for.

“It’s the Loro Piana effect, and it’s a smokescreen,” said William Norwich, a novelist and editor who, in a previous professional incarnation, had a front-row seat among New York’s monied elite as a gossip columnist for Page Six of The New York Post newspaper in the 1980s. “It’s a code,” he added. “You telegraph status without looking like you’re doing it.”

And as far as trends go, “stealth wealth” was well suited to a time when social media has turned us, in effect, into voyeurs, our noses permanently glued to the digital window while grotesquely wealthy people flaunt their toys, their cars, their designer fashions, the closets in their three-thousand-square-foot Calabasas mansions devoted to Hermès Birkin bags.

“Collectively, we’re spending more time checking out what the rich and famous are doing and less time looking at what Barry in HR and Sandra in Accounting did last weekend,” said Nicholas Bloom, professor of economics at the William D. Eberle at Stanford University.

We’re dissecting the Thorstein Veblen-style narratives presented to us by glittering unknowns like supermodel and philanthropist Karlie Kloss, who is married to Josh Kushner—an investor whose stake in startups like Instagram, Spotify and Slack has earned him an estimated personal fortune. at $3.6 billion.

In posts created for the delight of her 12 million Instagram followers, Kloss invokes a narrative in which she and her family inhabit a digital empyrean, a place a universe away from the everyday concerns of ordinary people. In the world of Kushner-Kloss, the light is always soft, air travel is discreetly private, and the human and the divine will seemingly converge somewhere in the Grenadines, on the deck of billionaire David Geffen’s massive Lürssen yacht, the Rising Sun.

“Wealth pornography” is how Stellene Volandes, editor-in-chief of Town & Country magazine, defines these posts. And, as with any permutation of adult entertainment, it’s free online: Anyone can watch it.

Things weren’t always like this. In the early Reagan years of the 1980s, also an era of rampant wealth creation, the display of opulence and status may have occasionally been grotesque (think birthday parties for 500 people at the Metropolitan Museum of Art’s Temple of Dendur), but still it was much less visible to the general public.

Hedge fund tycoons, predatory leveraged buyout kings, and real estate tycoons shamelessly competed to throw more parties, show off better wardrobes, and spend more money than one another, putting together lavish entertainments for guests who “drank champagne, ate caviar and used Lacroix,” as The New York Times once noted. However, its excesses were noticed by relatively few people.

“In the 1980s, you could have a private party at a public venue like the Met, buy Lacroix ottomans, ask Robert Isabell to replicate Versailles decor for your home for one night, fly all the flowers over from Holland” Norwich said. “And perhaps the only risk to your privacy was a few media outlets lurking outside with a pen and notepad.”

This kind of ostentation is not just frowned upon in the “new old money” era. It runs the risk of attracting the dangers common to countries where very wealthy people are obliged to lead a secluded life, under strong protection. “You don’t want to make yourself a target,” added Norwich. So in recent years, the children of plutocrats — billionaire Mort Zuckerman’s teenage daughter Renee Esther, for example — are driven to elite private schools in luxury SUVs with tinted windows and escorted by security guards. “The excesses of the 1980s couldn’t have happened if everyone had an iPhone,” Norwich said.

Privacy, discretion and, to a large extent, anonymity are the foundation of stealth wealth. The trope of understated luxury was developed to hide the invariable truth that the essential hallmark of status is “how much space you take up,” as Norwich put it.

He was referring to economic space. And in that regard, Americans rule the world, as the country’s very rich make up more than a third of the world’s extremely high net worth (UHNWI) population, according to a published wealth report. by Knight Frank, an independent property consultancy based in London. It is this group, far more than the “1%” (a club whose entry point is a net worth of just $30 million), that increasingly comes to define a new world order in the upper echelons of income.

Not surprisingly, this group of UHNWIs also takes up space in a literal sense, as among them are the nation’s 13 largest landowners—think John Malone, owner of Liberty Media and the Atlanta Braves; Ted Turner; or Peter Buck, co-founder of Subway—control more than 6.8 million hectares of land in the 48 contiguous states, an area the size of West Virginia.

In a sense, status is calibrated at all times and in all societies, “according to the group you associate with, your position and rank in relation to others,” said Ronit Lami, a heritage psychologist and therapist who specializes in UHNWIs.

Today, flaunting wealth is not only frowned upon at the highest levels of wealth, it also triggers competitive games in which there is no guarantee that a participant can win, added Lami. “Say you have a private plane: So what?” she said. “For a multibillionaire, a private plane is unlikely to be considered a status symbol. He might have five or six.”

Likewise, a $20 million West Village home or a Fifth Avenue penthouse may not be the trophy one thought they would be, as for many people in certain income strata, extensive home portfolios are routine. “For the property to be a trophy, it has to cost $50 million or more,” said Kurt Rappaport, a Los Angeles real estate agent who specializes in elite properties, categorically.

Consider a Spanish Colonial-style mansion in Malibu that Rappaport sold last year. Its buyer was an Oscar-nominated brewer and heir to a beer fortune. The price was $91 million, and most likely, Rappaport said, the plan wasn’t for the property, high on a hillside, to become the primary residence of its new owner. “These properties are extensions of the owners’ presence and personality, but in an elevated way,” he said. “It’s a very different level than posting your jewelry on Instagram. That’s not status. It’s showing off jewelry.”

For the “new old money,” discretion is the biggest display of status, said Volandes of Town & Country. “The power move is don’t post, don’t share,” she said. “It’s knowing where to go first, what to buy first, staying away from the crowd, not following the crowd at all, and not showing off.”

Yes, she added, there will always be those who load themselves with status symbols—diamonds, designer handbags—like pack mules in gleaming harnesses. Sure enough, clueless billionaires will be wearing Stetson hats on their space trips. But clumsy behavior is no proof of success. And taste, as currently constituted, demands the muted tones of a quiet luxury that, as Volandes added, isn’t really all that quiet. “You just need to adjust your hearing.”

Translated by Paulo Migliacci