The number of India’s ultra rich ( individuals with an annual income over over Rs 3 crore) rose by 16 percent to 1.17 lakh during 2013-14 and guess what their spending habits haven’t changed. Gold and jewellery remained the items they spent the most on, followed by apparel and accessories, and luxury holidays, according to a report by the Kotak Group and Ernst & Young (EY).
“While the number of ultra high net worth households grew by 24% over the last four years, the accumulated wealth of these households grew by a whopping 32% year-on-year during this period,” the report said.
Here are the eight ways in which the ultra rich like to spend their money:
- Diamonds are a girl (and boy’s) best friend if inlaid in gold:
Ultra HNIs spend most onjewelleryand apparel, followed by holidays and electronic gadgets.
- Asian or Italian cuisine:
While ultra HNIs have been adventurous in trying out new cuisines, Chinese seemed to be the most preferred cuisine, followed by Italian and Indian.
- Gift as generously as you get:
Ultra HNIs love to splurge on friends and relatives through gifts. As per the Kotak survey, luxury watches, jewellery and accessories are the most preferred gifting item, while mobile phones continue to increasingly feature in the list.
- Celebrities as important as friends at weddings:
Ultra HNIs are more inclined to celebrate personal occasions and successes to establish their identity. They also rope in movie stars or politicians for weddings or anniversaries. Moreover, having the best chefs of the city come and cook at the event is another attraction.
- Third time’s the charm, when travelling abroad:
Nearly 50% of the rich make 3 luxury trips a year and spend at least Rs 1.2 lakh per couple per night on an average during a holiday. While the rich love to visit the mega malls of Dubai and Singapore, they are also keen on vacationing in the exotic Mediterranean or the azure seas of the Caribbean. Some have grander travel aspirations, such as going into space. Meanwhile, Eastern Europe is emerging as a popular destination for exotic travel while stays in ancient castles and luxury villas in Ireland, Switzerland and Greece are also gaining popularity among the ultra-rich. The ultra-rich do not hesitate to spend on luxury travel if an idea catches their attention. For example, last year, a Mumbai-based businessman, on finding his family keenly follows the Wimbledon tournament, arranged for their travel in just three days’ time after shelling out Rs 50 lakh.
- Shop till you drop:
Shopping is the primevacation theme preference which is why Singapore, Dubai and European fashion capitals are the most preferred travel destinations for India’s rich, followed by beaches such as Maldives, Fiji, French Polynesia, the Mediterranean, French Riviera, the Caribbean and Hawaii.Beaches were closely followed by hills and mountains, and while the Alps were a strong favourite, many travelled along the Himalayas too. India’s rich are also interested in exploring the Maya/Aztec trails in Guatemala, trekking up to the Angel Falls of Venezuela or even diving in the blue waters of Belize in Central America. They’re also eager to travel to meet their favourite stars or drop in at high profile events – private meetings with sports personalities and Hollywood superstars were some examples of luxury trips that ultra HNIs undertook last year.
- It’s all about giving back:
As many as 650 of the ultra HNIs interviewed by Kotak felt it is important and necessary to give back to society in the form of a charitable activity and considered philanthropic activities while planning their annual expenditure.While ultra HNIs support a diverse number of causes across age, gender and need, education has emerged as the most important cause of support.
- Staying rooted to the land and markets:
Ultra HNIs have a strong preference for investing into equity and real estate. Two-thirds of the total distribution of wealth for ultra HNIs comes from their primary business and real estate. Given the latter is a tried and tested investment option, is not likely to lose its sheen any time in the near future. Of the total real estate investments, ultra HNIs tend to invest close to 50 percent in residential real estate and 25 percent each in land and commercial real estate.