Breaking into the hedge fund industry is a sure way to find yourself with a large income. Culture seems to dictate that most of that income will be spent and not saved. After all, you have to look the part and live the life.
If you had to guess, where would you say the hedgies spend most of their money? Electronics? Mansions? Private islands? Jewelry? This wouldn’t be the first time someone was interested in the spending habits of the disgustingly “rich.” DealBook, a blog from the New York Times, has the story.
For his book Fortune’s Fortress: A Primer on Wealth Preservation for Hedge Fund Professionals, Russ Alan Prince of the consulting firm Prince & Associates, working in conjunction with trade publisher MARHedge, polled the buying habits of 294 managers with a median net worth of $61.7 million.
It tuns out that hedge fund professionals spend their income on fine art. Art, on which they spend $3.99 million, beats the second item on the list (yachts) by a very wide margin. Only $430,000 is spent on yachts.
Fine art among hedge fund millionaires: wise investment for the fabulously rich with enormous expendable income, a true appreciation of art for art’s sake, or extravagant spending indicative of a bubble of some sort?
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