Is flaunting Lamborghinis, Rolexes, and diamonds a thing of the past for the rich? Showing off wealth is no longer the way to signify you have it.
Hillary Hoffower, Business Insider
- Long synonymous with dripping diamonds, flashy Lamborghinis, and shiny Rolexes, rich people are being more discreet about their money.
- Showing off wealth is no longer the way to signify having wealth.
- Investing in things like education and health helps the rich propel social mobility and gain access to what the middle class cannot.
But such flashiness is becoming less ubiquitous among the ultra-high-net-worth crowd. They’re spending more than ever before on security and privacy, trading in hilltop houses for homes in neighborhoods hidden from Google Street View.
And in an era where mass consumption means both the upper class and the middle class can own the same luxury brand, the rich are forgoing material goods to invest in immaterial means as a way to signify status. It’s what Elizabeth Currid-Halkett calls “inconspicuous consumption” in her book “The Sum of Small Things: A Theory of an Aspirational Class.”
It’s the opposite of “conspicuous consumption,” a term conceived of by Thorstein Veblen in “The Theory of the Leisure Class” referring to the concept of using material items to signify social status — a hallmark of previous elite spending, Currid-Halkett wrote in an article last year.
Essentially, showing off wealth is no longer the way to signify having wealth. In the US particularly, the top 1% have been spending less on material goods since 2007, Currid-Halkett wrote, citing data from the US Consumer Expenditure Survey.
It’s a growing trend among not only millionaires and billionaires, but what Currid-Halkett calls “the aspirational class.”
“This new elite cements its status through prizing knowledge and building cultural capital, not to mention the spending habits that go with it,” Currid-Halkett wrote, adding, “Eschewing an overt materialism, the rich are investing significantly more in education, retirement, and health — all of which are immaterial, yet cost many times more than any handbag a middle-income consumer might buy.”
Investing in education propels social mobility
That inconspicuous consumption often goes unnoticed by the middle class but noticed by a fellow elite is what makes it so discreet. Currid-Halkett described it as a shorthand for the elite to “signal their cultural capital” to each other and cement status. It “reproduces privilege” in a way that flaunting luxury couldn’t, she said.
Displaying knowledge, such as referring to New Yorker articles, expresses this cultural capital, giving a person leverage to climb the social ladder and make connections, Currid-Halkett wrote.
“In short, inconspicuous consumption confers social mobility,” she said.
J.C. Pan of The New Republic described how parents try to reproduce their class position for their children: “They buy their kids boutique healthcare, take them on enriching trips to the Galápagos, and — most importantly — equip them with every educational advantage, from high-end preschools to SAT tutors to Ivy League tuition. In 2014, the top 1% spent 860% more than the national average on education.”
Just consider the rich families who are spending millions to live within walking distance of the country’s best public elementary and secondary schools, or those paying as much as $60,000 for a college tour via private jet — they make such an investment in education in hopes of setting their children up for a successful, well-connected future.
And often, the parents invest in their own knowledge and achievement by working all the time, another modern way of signifying status, Business Insider’s Shana Lebowitz reported.
As Currid-Halkett put it: “For today’s aspirational class, inconspicuous consumption choices secure and preserve social status, even if they do not necessarily display it.”
Health and wellness also signify status
Vogue reported in 2015 that health and wellness had become a luxury status symbol, and it makes sense.
And in an analysis last year, the Financial Times columnist Simon Kuper wrote that “the cultural elite spends relatively little on beauty products, but splurges on exercise, because it thinks that bodies (like food) should look natural.”
“The thin, toned body expresses this class’s worldview: Even leisure must be productive,” Kuper continued. “Instead of trawling shopping malls, class members narrate their family hikes on Facebook.”
Some well-off New Yorkers pay up to $900 a month for a membership at Manhattan’s Performix House, an elite gym with a rigorous application process, a private entrance, and a content studio for social-media influencers.
It’s the same feeling evoked by stepping out of a $30 SoulCycle spin class to buy a $10 green juice, or having a $200-plus membership to one of the nation’s swankiest gym chains, Equinox, which even offers a $26,000 ultra-exclusive membership for the traveling mogul.
“It’s like the only acceptable lifestyle brag,” a spin enthusiast told Vogue. “You are a douche if you brag about your car or how much money you make, but bragging about how much you spin is normal, though still very annoying.”