They say money can't buy happiness, but it can buy a lot of things that make you happy!
1. Well, one ultra-rich person in particular. The CEO for a company I used to work for put a giant tank (pool) with a submerged "sunken ship" inside of it in his back yard so that he could scuba dive around in it.
2. Watching the weather report for multiple cities with ski resorts. If a lot of snow drops someplace, on moments notice a group of about a dozen will meet up at the private jet and go skiing for a couple days. During the trip, they might jet over to see a nearby sporting event. Then back to work as if nothing special just happened. A couple days later the designated accountant on the trip will send a spreadsheet around to everyone with their part of the bill for the trip. This bill can also include loses from the poker games played on the jet during flights.
3. Dated a guy who had a place at Ocean Reef (super exclusive, extremely wealthy community in upper Florida keys).
Sat with 5 other couples, going back and forth about whose mega yacht we should take out that evening.
Bob and Cindy's is the closest to the canal... but oh, Jim and Donna's is bigger! But, Mark and Tina's jacuzzi is already heated!... but Dale and Ira's has a full staff tonight!
I was just like... I have a kayak...
Ashleym527
4. Seasonal furniture.
"Well, it's getting on into April so we better get the spring couches and chaise lounges out of storage, and swap out the winter dining table and china for the spring set. Better get out all the matching drapes, too."
7ofalltrades
5. Buy property in London and dig out the basement 2-3 stories for conversion to luxury living.
6. Buying and selling people. Let me explain... (Continued)
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Buying and selling people. And then getting them to battle in front of an audience of thousands of people. On a football field.
7. Legally watch current theatrical films in the privacy of your own home theatre.
8. They buy fine art - museum-quality pieces - when it becomes for sale and hold on to it until it appreciates to a point where it's worth more to collectors than they originally paid for it.
That way, not only do they make a tidy profit, but they also get to enjoy the artwork in their homes as it increases in value.
Back2Bach
9. Oh it gets so much better than that. They give it away and make money doing so. This information is pretty old, so these loopholes might have closed or changed in some places, but it goes like this:
1. Buy painting for $1 million
2. Painting appreciates to $2 million
3. Donate painting to a museum. Museum pays you the $1 million you originally paid for it, so you get your original money back.
4. The $1 million of appreciation is considered a donation, which is tax deductible so you get to deduct that from your taxable income. This saves you (in the US) ~40% of $1,000,000 (or $400,000). In the past or in other countries, the top tax rate might be as high as 60% or even 90%.
So, you get your money back, plus a $400,000 (or $600,000 or $900,000) profit. You don't have to pay capital gains on the appreciation of the painting. You also don't have to pay a broker's fee. Plus, selling a multi-million dollar work of art can take a long time and with an auction, there's no guarantee you'd get the appraised price anyway. With an appraisal, you get someone to tell you what the price is. You are paying the appraiser. What do you think the odds are he's going to tell you a price you don't like?
Pretty sweet deal if you ask me.
Before 1969, this worked as described above. But, the top marginal tax bracket abused the crap out of this loophole, so they changed it. Since then, you do have to pay capital gains tax on a portion of the difference between the sales price and the fair market value, as I'll show below.
People have a bit more to say about this, so I'll go through... (Continued)
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Complaint #1 It's not a donation if you get paid! You just sold it cheap!
Yes and no. The portion of the fair market value that you got paid for is a sale. The portion of the value you didn't get paid for is a donation. Note this only works when you're selling something to a qualified charity. It's called a "bargain sale".
Complaint #2 You could sell it and make a $1 million profit!
Yes, sometimes. Obviously people still sell art so it's not always best to donate. But remember, this isn't a used lawn mower you can throw on Craigslist and someone will come pick it up this afternoon. There's maybe a handful of people in the world who can afford a multi-million dollar work of art and might be interested in buying it. If none of them happen to want the piece you're selling, you're out of luck. You ain't selling no art today.
Because of the aforementioned scarcity of buyers, you're going to need a broker like Sotheby's or Christie's to sell it. They don't work for free. They can charge up to 20% of the sales price in fees. So your $2 million sale - $400,000 fee gets you $1.6 million. Some money right now is often worth more than theoretical money some years later, or maybe never.
Complaint #3 The museum can't/won't pay for a painting!
They can and will. They can turn around and sell it for the fair market value for a $1 million profit because they're a non-profit so they don't have to pay capital gains tax and they're a museum so they don't have to hire a broker because people who want to buy art will come to them. If it's a particularly famous piece (which it probably is if it's doubled in price) they can exhibit it and drive ticket sales.
Also, as other people mentioned, this is only the tip of the iceberg. You can loan it to a museum and get a deduction for that. You can start your own museum and avoid taxes that way. There's all kinds of crazy things you can do with trusts.
Look, I'm not going to say rich people are all smart. I've met plenty of dumb ones. But you don't get and stay rich by being stupid about money. If they're paying millions or tens of millions of dollars for art it's because there's an angle in it somewhere where they can come out ahead. Yes, they're not infallible, they can get burned sometimes (you don't get rich by being risk-averse either), but they're not just romantic art-lovers either.
PMMeUrHopesNDreams
10. The following is a true story based on real events
"Hey -whostolemyusername- you wanna fly down on my jet to Myrtle Beach and Golf tomorrow?"
"uh...I have work...sorry"
11. Using the term "Summer" as a verb. (eg: we're going to summer in the Hamptons)
12. Go abroad for dinner.
I hear of wealthy Londoners (or nearby) who simply jump in their helicopter and fly to Paris for an evening meal, then come home again.
Eddie_Hitler
13. Having house managers at all of their properties. These people coordinate all the domestic staff, and manage the properties so that they are instantly liveable at a moment's notice (down to the flowers of choice in every room) even if the owners only come in for a week or two in a year.
Their secretaries will usually call the house manager the day before saying "oh they'll be in London for a few days" and the manager will arrange everything from the pickup at the airport in the cars he knows each member prefers, coordinate with the secretaries to figure out any appointments they may have, instruct the chef to make their favourite menus.... all of this is done without any input from the owner. That's what they pay for.
all-you-need-is-love
14. This one is pretty messed up. My classmate at university was from a wealthy Russian family that had (Continued)
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that had deep connections to the government and oil industry. He was so ridiculously rich that I couldn't even fathom it.
Anyways he found a few friends of similar ilk and they started some kind of underground club where they would fly in really hot Instagram models from all over the world for "photoshoots". In return for buying them nice clothes and things like that, they would hold just ridiculous sex parties where some really messed up stuff went down. Think the kinkiest of the kinky and that is what they did.
The only reason I even knew about it is because I worked as a part-time limo driver and these guys would occasionally hire me to drive their girls around. Before you ask, I never got in on the action.
[deleted]
15. I just learned the other day that wealthy families go on "shopping trips" to other states just for shopping.
Never considered that some people might say "hey this weekend, let's fly to New York and get some new stuff." without having an underlying reason to be there (visiting family, business, tourism)
Also, my friend growing up had another friend who had a legit Giraffe taxidermied (?) in his bedroom that was multiple stories.
haffbaked
16. I was once offered the opportunity for someone to run me a bath for $500 at a hotel (no added perks, not sexual, no company- just a bath with rose petals blah blah). No thanks.
17. I had some family friends growing up that had a handmade monopoly table.
It was wooden with silver pieces, and they used real cash.
ohgreatitsryan
18. I have a relative by marriage who buys land just so (Continued)
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just no one can develop it.
19. Met a cool young girl at my college - she was like a princess - she said that was the closest English word to describe her status. Before coming to school, she had NEVER - dressed herself, bathed herself, walked up or down stairs without a maid holding her hand... I initially found this out when I heard her ask someone for help going down a flight of, like, 6 stairs. She was cool about it, though, and learning.
20. Not just the ultra rich doing it, but a new one on me... Valet garbage service.
I was out in LA walking around a neighborhood (not gated). You tell it was the kind of neighborhood where people would have housekeepers.
It happened to be garbage day. Suddenly all these brown skinned people appeared. They went into the yards, got the garbage cans from where they were stored. Wheeled them out to the curb, then as soon as the garbage truck passed, they wheeled the garbage cans back into hiding.
I talked to someone who lived there and turns out it's part of the homeowners' agreement that garbage cans cannot be left on the curb at all and they paid an extra fee for this mandatory valet garbage service.
Maggie_A
21. Building an extra wing onto the mansion to display 30,000 mounted dove heads.
22. My cousins have travel-around tutors that go with them when they travel around the world, so they technically never miss school. They aren't bound by the schedule of public or private schools in Texas, where they technically "live".
Also, they were just in South America shooting (Continued)
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Also, they were just in South America shooting Dove (apparently) and they killed 30,000 in a single week, between my uncle, his 15-year-old son and his 12-year-old son.
My step-grandfather (uncle's father) was...displeased about the display, despite having been a hunter his whole life. Somehow, in his age, he's discovered the wrongness of some of the things he's killed. Specifically about doves he said, "I was at the [country club] last week and they have lots of doves out there. The regular gray ones and the white-wing variety. And they're just so beautiful and I said to myself, 'How could you have ever killed these magnificent things? How could you look at yourself in the mirror?'"
This man has been a hunter for most of his life and he's sworn off of it forever. He doesn't even fish anymore.
SheaRVA
23. A girl I know is a nanny for a very rich family and they flew her to the other side of the world to take care of one of their three kids. Just one. The other two have their own separate nannies.
mepulixer
24. Buying their kid's way into a particular school, especially alma maters.
All it takes is a few well-timed donations, and suddenly your kid gets a private tour, lunch with alumni relations officers, and consultations with an admissions specialist. There are all sorts of assurances that this is so the kid can get to know the school, and that none of these people influence admissions.
But really. Assuming the kid isn't truly dumb, a couple hundred thousand goes a long way in helping them "stand out" from the crowd.
25. Old money in my part of the world have a thing for fully restored private railcars, with all the modern amenities of a high end RV. They pay to have a track branched to their personal storage shed and then take them out maybe once every other year. Of course the process of taking them out involves paying a company such as Amtrak to haul the thing to their main line, hook it up to a commercial passenger train, and then lug them around the country to their destination. Get a handful of private railcar owners together and they hitch up, rent an engine, and tour the country with close friends the old fashion way on entirely private luxury train.
NathuramGodse