The cost of a millionaire lifestyle is more expensive than it used to be as a result of price inflation.
An article in the Telegraph today explains that the basket of goods £1m could purchase in 1992 would now cost £2.6m.
The cost of buying an average house in Kensington and Chelsea, a Rolls-Royce, a luxury yacht, and holiday homes in Tuscany and Cornwall has increased by 163% since 1992. At the same time, the average annual salary has only increased by 100%.
There is no arguing that £1m is still a lot of money.
However, where it used to be viewed as a ‘large or iconic’ sum of cash by almost everyone, only 71% of people now hold this view.
Price inflation is an unfortunate fact of life and will always make the cost of goods and services more expensive over time.
In our experience, whilst a typical millionaire lifestyle doesn’t any longer involve the items described in the Telegraph article (none of our clients drive a Rolls-Royce, for example!), the desire to lead a millionaire lifestyle does require a significant amount of capital.
This is where Financial Planning comes in.
Our LifeWealth Design service helps individuals to understand the steps they need to take to achieve their objectives in life. When working with clients as LifeWealth Planners, we provide answers to life’s important financial questions.
-When will I be able to afford to retire?
-Will there be a time in my life when I run out of money?
-Am I taking too much (or too little) risk with my investments?
-What will happen to my family if I cannot work?
-For how much do I need to sell my business to achieve the lifestyle I want?
-Can I afford to privately educate my children or put them through University?
-How much inheritance tax will my children and grandchildren have to pay?
For some clients, this will include questions about what is required to live a millionaire lifestyle; being able to afford a home in a certain area or to buy a luxury yacht.
For others, it will be about achieving financial security and being able to have choices with their time, to spend it with family or experiencing cultural events abroad.
Photo credit: Flickr/rore
