I’m rich, but not rich enough

I’m rich, but not rich enough

A banker’s wife reveals what life is like among the moneyed elite in London’s ‘Alpha Territory’ – the land of the super-rich

http://www.thetimes.co.uk/tto/magazine/article4229469.ece

I am what you could call a BWAG (a banker’s wife and girlfriend), who is privileged enough to live in a five-storey, white stuccoed, terraced Victorian house in “Alpha Territory”, the land of the rich and super-rich in central London.

Our house has a nanny flat; a fridge called the Morgue (it is so big you could hide three bodies in it); a super-king-size bed, which could accommodate Brangelina’s family; a media/playroom for the kids with enough toys to start a Toys R Us; a mini gym with an elliptical cross-trainer and a stationary bike with a flat-screen attached to it; a garden with olive trees, figs and strawberries.

I have a nanny/housekeeper, who cleans, cooks and looks after my darling daughters, whom I send to a private school, at a cost of £18,000 a year per child.

Our holidays include a yearly jaunt to Barbados, a ski trip to the Swiss Alps and school holidays to our second home in the Med. We have memberships to just about everything you could think of: the Tate for private art views; the zoo, so we can skip the queues; a private club; an exclusive concierge service that can source tickets to anything that begins with the word “private”.

School fees, a full-time nanny/housekeeper, some designer clothes and handbags, a few Michelin-star dinners and one or two five-star holidays add up to at least £100,000 a year – and that’s not counting the mortgage payments, savings or the higher-rate taxes. And yet, BWAGs are quickly disappearing from London and being replaced by the super-BWAGS, the billionaire wives and girlfriends, most famously led by Dasha Zhukova, Roman Abramovich’s girlfriend. I am a dying breed.

Over the past ten years, while many bankers have stopped receiving their inflated salaries and bonuses, or have lost their jobs and moved out of London, the international super-rich have taken over prime areas of the capital, pushing not just the middle class out of central London, but the merely rich, too.

I am lucky. My banker husband has slogged on the trading floor of a gleaming American bank for 20 years, often for 18 hours a day. He has survived the job culls, the credit crunch, banker bashing and the nervous breakdowns around him. He invested in London real estate at the right time, during the property slump of 2009.

He has survived the worst of the recession. But many bankers did not, and banking is not what it used to be – a place to make real money. Even bankers no longer want to be bankers.

Not that you should feel sorry for us – because you shouldn’t – but banker bashing, Britain’s favourite pastime, is now irrelevant. It is the super-rich that are transforming London and creating a supersociety.

London has become the billionaire capital of the world, with 72 billionaires, ahead of Moscow (48), New York (43) and San Francisco (42). Such is the interest in this subset of society and its impact on London that sociologists at Goldsmiths, University of London, are studying what they call the Alpha Territory – elite enclaves in central London that are inhabited by the super-rich.

I live on the fringes of Alpha Territory. My children mingle with super-rich children at school, and we frequent some of the same private clubs. I am, by definition, an HNWI (High Net Worth Individual) with assets of $1 million (£625,000) or more (excluding primary residence). To all intents and purposes, I am rich. But I am a super-rich man’s pauper and they do not regard me as one of them. There is an entire social stratification of the rich, and I am at the bottom of the ladder.

Above me are Ultra High Net Worth Individuals (UHNWIs), who have a net worth of at least $30 million. Then come the centimillionaires – those with $100 million – which is considered really rich, even by really rich people’s standards. At the top of the pyramid are the billionaires.

And the centimillionaires and billionaires keep coming to London for political, economic and social safety. They are attracted to the city because it is one of the few places in the world where privacy is valued so highly, and where one can move from private members’ club to private car to private jet without actually having to walk on a public pavement.

Even New York does not have these levels of self-segregation. In London, there are private members’ clubs, private schools, private gardens, children’s private members’ clubs, access to private jets.

I belong to a members’ club. Some of my friends belong to more than one. An Italian friend, who left London ten years ago, still has membership at a club, just in case he is passing through. Another, who lives in New York and has never lived in London, has a club membership so that he can make business deals when he stops by (in his private jet).

For about £3,000 (£1,500 joining fee, plus £1,500 annual membership), Mayfair clubs such as the Arts Club and 5 Hertford Street – where I once overhead someone say, “In London, if you have £10 million, you’re poor” – allow the super-rich to dine and socialise with like-minded individuals. The Arts Club, which has welcomed everyone from Gwyneth Paltrow to Prince Harry and hosted Victoria Beckham’s 40th birthday party, now holds private concerts with the likes of will.i.am performing.

Culturally, London offers the super-rich experiences that go beyond the ordinary. Who wouldn’t want to enter this exclusive world, where I have been, on occasion, a spectator? For a few hundred pounds a concierge service can get you tickets for an exclusive Q&A with the director and actors at the premiere of an Oscar-nominated film. Or private views with artists such as Tracey Emin, Damien Hirst or Jeff Koons. Or a private Pharrell Williams concert at the Serpentine Summer Party, dancing under the stars, as I did, with Cara Delevingne and Keira Knightley. A ticket to the Serpentine Summer Party costs £350, so that’s £700 for a couple, not counting what you need to pay a concierge service to get these prized assets.

Exclusive concierge services such as Quintessentially Lifestyle and Sincura can source tickets for the most exclusive events, including those for the Cannes Film Festival for about £3,000 (for a screening of one of the Palme d’Or contenders), or London Fashion Week for anything from £500 to £3,000, depending on the designer and how near the front you sit.

Membership of these concierge services ranges from a few hundred pounds a year for basic services to more than £25,000. It’s like having a personal assistant who has insider knowledge of and access to all the hot tables and parties around town.

London also caters for super-rich hobbies, such as collecting fine art and wine, or playing polo, which means owning four polo ponies, each costing £20,000. This is creating a sub-society that only the super-rich inhabit.

I don’t live in one of the prime central London areas of SW1X, SW3, SW7 or W11, but in one of the less desirable postcodes such as SW10 (the “lesser” postcode in Chelsea), SW11 (Battersea, the wannabe Chelsea), W10 (North Kensington, not quite Notting Hill), or the dodgier parts of W2 (Westminster, which has super-rich, rich and pseudo-rich all mixed together), where a house will cost half the price of a comparable one in a posher postcode.

The international super-rich, whose favourite topic of conversation is property, collect houses like a Monopoly game, buying the most expensive houses possible in the most expensive postcodes. In this stratosphere of wealth, the more expensive, the better. The super-rich have flocked to areas such as Belgravia and Knightsbridge, which increases the price of property. But it also pushes up prices in neighbouring areas such as Chelsea and Kensington, and in the neighbourhoods next to them.

It is absurd for me to see my friends, in families with two incomes from big City banks of £500,000, unable to buy a property in central London. These are people who have lived in the Alpha Territory for the past ten years and have moved away to live close to a good state school, because they can no longer afford the fees at private schools.

One friend, a director at a City bank, is making a choice on whether to have a second child, knowing he cannot afford a bigger house or school fees for two children.

The merely rich will buy a three or four-bedroom house for a few million, spend another £500,000 on renovation, including a bespoke £60,000 kitchen with a £10,000 granite worktop, a wireless music system and a media room that doubles as a playroom. For those with a heftier bank balance, something will be created in the house to give it that “wow” factor: a zen garden with a waterfall, a subterranean gym, a climbing wall or a wall-to-wall aquarium.

But the super-rich are different. The properties they are buying are not really what we would consider houses. They are micro cities, with house managers who act like CEOs and run them like mini companies. They are built to cater to their owners’ every whim. Like to exercise and swim lengths in the morning? Let’s build a basement swimming pool with a gym next to it. You’re a film aficionado? Let’s build a 12-seater cinema room. For children, playrooms are built with slides, zip wires and climbing walls.

Doctors, hairdressers, masseuses and reiki masters are on speed-dial. These houses are so big and so well appointed that there is eventually never a need to leave them.

I was once invited to a superhouse, and it was a rather overwhelming affair. I was welcomed by the butler, escorted to one of the antechambers by a housekeeper and told to wait. I saw cleaners and nannies milling around, a chef cooking away in the back.

The staff seemed like a highly organised colony, and included two chauffeurs (his and hers), six cleaners, one house manager (the CEO), one personal assistant (the COO), a chef (trained by Gordon Ramsay), two nannies (one per child), a governess (what does a governess actually do?) – and that’s just those who lived in. The live-out staff extended to builders (they are constantly upgrading and renovating), a gardener, a landscape architect, an interior designer, a stylist, swimming-pool maintenance, a florist, an art consultant and the specialist architect who masterminded the subterranean renovation.

Then there were the financial advisers, who managed this wealth. Being this rich takes a lot of effort and manpower. At least this is one positive economic contribution the super-rich are making: the creation of highly specialised service jobs for UHNWIs.

On the other hand, I was recently in the process of hiring a nanny and discovered that the Russians are distorting the nanny-market economy. Experienced nannies are in great demand in these parts of London. You would expect to pay from £350 to £450 a week for a live-in nanny.

The Russians and some other ultra-wealthy families are offering double the going rate – £800 a week. And there are families who decide to buy for their nannies Burberry raincoats, Saint Laurent sunglasses, Tod’s shoes and Hermès bags, which 1) makes me look like a miser; 2) will bankrupt me if I follow their lead and try to retain these supernannies; 3) has made people mistake me for the nanny and vice versa on a number of occasions, since I do not wear Tod’s shoes or Saint Laurent sunglasses or carry an Hermès bag on the school run.
The Russians demand seven-day weeks and 24-hour availability, so if a nanny wants that bag, she’ll have to work for it.

Then there’s the issue of parenting. We are fortunate enough to send our children to schools and nurseries that attract celebrities and the super-rich. They are deemed some of the best in the country, and hence the world, because there seems to be a general opinion that a British early education is the best.

This creates a self-segregated group of HNWI and UHNWI parents. There is a selection process to enter these schools and nurseries, which involves who you know and whether you can afford the £18,000-a-year price tag.
After school fees, there are children’s private members’ club to think about. I know children who spend their weekends being chauffeur-driven from their private garden to Purple Dragon in Chelsea, their private children’s members’ club. It has everything a child could dream of: a soft-play area, cooking classes, painting classes, a swimming pool and a recording studio.

An ex-Purple Dragon mother told me that she had spent more than £100,000 there (and finally cancelled her membership). One wonders how this prepares children for real life, or whether they will ever need to encounter reality.

We have also been invited to birthday superparties at the Dorchester, Berkeley and Mandarin Oriental hotel ballrooms, which have been transformed into mini Disneylands complete with merry-go-rounds, rides, magicians, entertainers, popcorn machines, ice-cream machines, face painters, balloon sculptors and bouncy castles. I struggle to explain to my children why they will never have a party like that, and question whether it is morally right for me to expose them to this amount of obscene wealth. To these people it is small beer, but to us and to our kids, who do not have inheritances to fall back on and who will need to work to earn a living, where do we draw the line? We want our children to attend the best schools, but how can we protect them from a fantasy world they do not really belong to?

Similarly, weddings are occasions when the super-rich try to outdo each other. People I know, the merely rich, will organise “destination weddings” in the south of France in places such as Le Château de la Chèvre d’Or and Villa Rothschild Ephrussi, or at beautiful monasteries in Portofino or Ravello in Italy.

The super-rich will do the same, but fly their guests there by private jet and, instead of hiring the local band, will book George Michael and have a firework display bigger than Sydney’s new year pyrotechnics.

The richer the rich get, the more rich they want to be and, almost like an addiction, the more they want to spend to feel better.

First comes the house, then the cars, then the private jet and finally the superyacht. The super-rich compete with each other for the biggest yacht in the marina and their boats are moored in Monaco, St Tropez or St Barts for ogling bystanders to dream of becoming not only the “haves” but the “have yachts”.

This summer we splurged on renting a yacht for a few thousand pounds a day to go to Formentera and have lunch at Juan y Andrea. We felt a mixture of guilt and excitement to be splashing out on such luxury – until we ran into an acquaintance, who arrived on a 30m yacht that cost 10 times more than ours to rent, having flown down to Ibiza in his private jet.

With private jets being as easy to access as calling an Addison Lee cab, plane travel has enabled the super-rich to be citizens of the world, living a few months a year in one country and a few months in another. One billionaire I met said he spends more hours on his private jet than in his house.

It’s another reason why London is one of the best locations for the super-rich to base themselves. Being no more than 12 hours from most major cities and financial centres – New York, Paris, Frankfurt, Tokyo, Moscow, Hong Kong – it is easy to do business anywhere in the world.

It is also only a few hours away from the favourite super-rich holiday destinations: Monaco and Cannes for the Arabs, the Byblos in St Tropez and Courchevel for the Russians, the Hamptons and the Caribbean for the Americans, and the Maldives for the Asians, Chinese, Russians, British, French and Indians. A £10,000 holiday may sound like a lot to you or me, but for the super-rich, you can multiply that figure by 10.

Before we had children, we once went on what we thought was a very expensive holiday to Reethi Rah, a tiny island in the Maldives and a favourite of the super-rich. We treated ourselves to a private beach villa and business-class flights, thinking that overseas travel with children would soon be out of the question.

Even in the middle of the Indian Ocean, we ran into someone we knew, who was staying in the presidential villa with a private swimming pool while his children were in their own villa like the one we were staying in. By our calculation, including flying five people business class, they had spent £100,000 for two weeks of bliss.

For those who want to know how to snag a millionaire/billionaire, most of the BWAGs I know are intelligent, well-educated women from well-off families. Many BWAGs have their own careers and salaries that match their husbands’ (until they give them up to raise a family). Many met their husbands through work or at university, or from socialising in clubs or bars that cater to the wealthy.

I was educated at an Ivy League university in the States, where I met 18-year-old girls who openly admitted to being there to meet a husband. (My husband jokes that I am the overeducated, clever one, whereas he is the lucky one who is paid more than he really deserves.) There are women who lead the way in banking, private equity or hedge funds and have equally successful husbands, but, generally speaking, it is the men who are making the fortunes.

There are also women who have their own family fortunes looking for an appropriate husband, usually good-looking and charming, intelligent enough to bring home to Mummy and Daddy.

The dating game for the super-rich has its own rules. If you are a woman looking for a super-rich man, it helps to a) have supermodel looks; b) be highly intelligent; c) come from a very rich family yourself; d) all of the above, or, if you have none of the above; e) work for them. These include nannies, personal assistants or any of the service providers mentioned earlier. I have met an overnight billionairess who went from being a billionaire’s personal assistant to being a billionaire’s wife soon after his divorce came through. Call it luck or good planning.

After love comes marriage – and the prenup – and then divorce. Quite a few super-rich I know are on their second marriages. For the merely rich, divorce usually comes in the form of alpha men working too hard (workaholics), ignoring their wives and families (egoholics), or becoming too alpha at home as well (controlaholics), or wives becoming too demanding, needy or “difficult”.

Affairs happen, on both sides, when the men are working and travelling constantly and the women find themselves in the arms of a consoling other. One woman I know, who married into super-rich society thanks to her good looks, knew that affairs when he was away would be part of the contract. “At least I know he will be coming home to me and sleeping in my bed every night when he’s here,” she told me.

To some, marriage has become a cynical transaction. When we bought our second home and I started spending more time abroad, a friend warned me against it. “Don’t stay away from him too long. He’s only a man, after all.” As the French saying goes, loin des yeux, loin du coeur (far from the eyes, far from the heart). Of course, there are very happy, stable and genuinely solid marriages in the mix, mostly those who understand the limitations of wealth and power or those who have an equal marriage. I hope I fall into this latter category.

I arrived in London 12 years ago, wide-eyed and innocent. I was 26 years old and finishing a master’s degree. I lived near the King’s Road in Chelsea, where I watched financiers, who thought they were the kings of the world, driving their Ferraris and Porsches down Sloane Street.

This was a time when private equity and hedge funds were making their millions, when work trips involved reserving entire floors of five-star hotels, private jets, helicopters and £10,000 bar bills. Then Lehman Brothers fell and the credit crunch happened, leaving many bankers broke and in disrepute, funds shutting down and only the super-rich left standing when the dust settled.

I still feel like an onlooker to this new breed of super-rich. There is an inevitability that more and more of them will come to London for its culture, its education, its economic stability.

This concentration of wealth will affect everyone who lives in London, from the man pouring your Starbucks to the butler opening the door in the Kensington Palace Gardens mansion, to the banker who can no longer afford private schools.

There will be an increase in social inequality, but with it will come more jobs in London. Perhaps instead of a £2 million mansion tax (which is a misnomer; the price of an average London home is now £500,000 and £2 million no longer buys you a mansion), the council tax should be revisited and we should introduce a UHNWI supertax on purchases over £10 million (ie, planes, superhouses, art and boats), or a philanthropic tax to encourage the super-rich to donate to worthy causes.

I will leave these reflections to the economists and the sociologists who are researching the Alpha Territory. In the meantime, I have to figure out how to answer my daughter when she asks why we don’t have a pool in our basement and how to keep my nanny from leaving me for an Hermès handbag.

A BWAG’s guide to London’s hierarchy of wealth

Merely rich: A four-bedroom house in SW10; a full-time, live-in nanny; private schools for their children; a few nice holidays to Italy or Ibiza in the summer; possibly a second home in the Mediterranean; an Hermès Birkin bag; a black Range Rover.

Super-rich: A 10-bedroom house in SW1X, SW3 or SW7 (or some areas of Holland Park or Notting Hill); a lift and six live-in staff, including nannies, housekeepers and a chef; private jet and chauffeur-driven Mercedes; 10 Hermès Birkin bags in different colours; a property portfolio in at least two continents.

Billionaire rich: An ostentatious mansion the size of the Dorchester hotel, in Kensington Palace Gardens or around Regent’s Park; a micro city of employees; a private island; a superyacht with its own Wikipedia page; a football team; a £100 million divorce; a super-BWAG, preferably a supermodel.