Julius Baer Lifestyle Index
May 29, 2012 6 Comments
The government may publish inflation figures fortnightly,but these are for industrial workers,agricultural workers etc.Inflation obviously varies depending on a persons lifestyle and consumption habits.Have you ever wondered whether there is an increase in the cost of living a luxurious lifestyle?If so by how much?
Now there is a way to answer all these questions.The Swiss Private bank Julius Baer has constructed a Lifestyle Index to capture the rise in price of luxurious living in Asia.
The Julius Baer Lifestyle Index is based on a basket of 20 luxury goods and services that represent discretionary purchases of HNWI in the four major Asian cities: Hong Kong, Shanghai, Singapore and Mumbai. Properties are accorded the highest weight of 30% and cars the next highest weight at 10%.The list does not purport to represent the comprehensive spending patterns of HNWI in the region,but rather an indication of how various items they spend on have risen by. While properties and cars have a combined 40% weight, Julius Baer has given an equal weight for the other 18 items in the index to sum to 60%.
Here are the components of the Index:-
Wine – Lafite Rothschild
Wedding banquet – 500 persons at top hotel
Ladies handbag – Chanel quilted bag
Business-class flight -Avg. return to Ldn./NY
Piano – Steinway Grand
Hotel suite – Four Seasons 6 star
Residential property – 4000 sq ft high-end
Ladies shoes – Classic Louboutin pumps
Hospital – 1 day top-end hospital
Jewellery Tiffany – 2 ct diamond ring
Car – Mercedes S500
Lawyer – 1 hour fee with partner
Watch – Oyster Rolex
Golf club membership – Top local golf club
Cigar – Cohiba siglo VI
Boarding school – Average Eton/Deerfield
Men’s suit -Giorgio Armani
Root canal -Top local dentist
Facial aesthetic procedure – Sculptra liquid face lift
University fees – Average Oxford/Harvard
I’m not sure I care for every item on the list.I’m just not that much into spirits.I don’t smoke and never plan on changing it.I’m pretty anti-cosmetic procedures,unless it is done for medical reasons.I can’t play music and it seems stupid to buy a piano under the circumstances.Tiffany and Rolex are 2 brands I’m not particularly partial to.And I can compromise on a few other things such as the size of my house and my club membership.But there are few things I refuse to consider doing without such as the ability to afford the best hospital,best dentist and lawyer and the best education for any children I might have,though I can’t say I’m fully sold onto Eton.So, willy-nilly I suppose I will be have to follow this index if only to ensure that I and my family can continue to afford the best of what we value.So I’m pretty pleased to read that Mumbai has had the lowest inflation in this index amongst the 4 cities.At 7%,even investing in government bonds should beat the inflation in the luxury index.Of course with the depreciation in the Rupee, some of the imported luxuries — purses,shoes et al are bound to cost more.But I think a bit of bargaining should sort out that problem.
If you want more details of this index or are from one of the other 3 cities,viz Singapore,Hong Kong or Shanghai and are looking for more locally relevant information, you can get it here : http://www.juliusbaer.asia/data/docs/download/6170/zh_Hant/Julius-Baer-Lifestyle-Index.pdf