The night that Billy Gore, a cab driver from Kirby, won £1.1m on the lottery, he gave his cab away. To a friend. He paid for a fortnight’s all-inclusive holiday in Jamaica for 14 people, and a Ford Fiesta for his daughter. “But my Dad used to work at Ford’s, and we were entitled to a 20% discount. My wife said, ‘You just wasted £2,000.’ That’s when common sense kicked in; £1m seems like a lot if you’re collecting a giro every week, or putting 10p bets on Yankee accumulators. But I did my sums. And, I tell you, £1m isn’t all it’s cracked up to be.”
In 1956, when Cole Porter wrote High Society, and Who Wants to Be a Millionaire?, £1m paid for “flashy flunkeys ev’rywhere” and a “supersonic plane”. No more – although Billy Gore did stretch to an extension out the back. When Roger and Lara Griffiths from Wetherby won £1.83m, the national-lottery people told them straight – they wouldn’t be wallowing in champagne any time soon. Camelot’s board of financial advisers reckoned that they just didn’t have enough to live “the millionaire lifestyle”.
These days £1m buys a decent house, or a sizable fund to play the stock market. But not both. It offers some security, but not enough to tell the boss what you really think of your job. You’re not going to be able to retire on £1m unless you are very old – or very ill. If you invest it in a mix of bonds, you might just end up with £50,000 a year of after-tax income. That’s decent money, but not enough for flashy flunkeys ev’rywhere. However you cut it, £1m just isn’t enough to make you feel like $1m.
Now the economists have done the figures. According to Coutts, the private-banking arm of the Royal Bank of Scotland, you will require assets and wealth (not income) of £2.2m to live like a millionaire in Wales, and £2.3m to do so in, say, the East Midlands. And if you live in London, “the millionaire lifestyle” – which now Coutts defines as a five-bedroom house with two staff, two luxury cars, a yacht, an apartment in the south of France, two meals out a week, two luxury holidays a year and school fees for two children in private school – will cost you well over £3m.
The 2005 research already looks dated. “You couldn’t live the millionaire lifestyle on £3m,” says The Sunday Times’ Michael Winner. He should know – he spends £90,000 on Christmas in Barbados, and £1,500 a night on a hotel suite in the south of France. “You couldn’t even buy the house – there are terraced houses at the end of my street in Holland Park that cost £6m each. To live like a millionaire on £3m you’d have to live on the Outer Hebrides.”
Rising stocks, and the increase in UK property prices, mean there are now more millionaires in Britain than ever before, according to the Centre for Economics and Business Research (CEBR). More than 376,000 people have £1m in cash – or assets, such as property, that can be converted to cash – which is the accepted definition of a millionaire. It’s just a shame they can’t afford the lifestyle. The continuing property boom – the CEBR expects a 71% hike in prices by 2020 – will devalue the “millionaire” label even more. Clearly, we need a new definition of “rich”.
I am smiling at the most powerful man in London – the doorman at Nozomi. He runs the hardest door in town and holds the “guest list” – a single, blank sheet of paper. Nozomi is a chic Japanese bar and, to get in, you need to convince the doorman you look the part. When I say I’ve come to meet the entrepreneur Wayne Sharpe, I look the part. Sharpe has assets in excess of £30m. If you’re looking for a new definition of rich, look no further than Sharpe.
He wasn’t born rich – but he was born an entrepreneur. “The important thing when you’re an entrepreneurial thinker is being able to control your urges, and determine whether the market is ready or not,” he says. He speaks from experience. He set up a delicatessen – three years ahead of its time – and lost a lot of money. The market clearly wasn’t ready. And he lost another $500,000 in an unsuccessful restaurant venture. “That cured me of hospitality,” he says. But then he came up with the idea for Bartercard. Bartercard is a business that allows member organisations to buy and sell goods and services without actually using cash. It’s still growing. “I was on the phone as soon as I awoke,” says Sharpe. “When my housekeeper brought my fruit shake for breakfast at 10am I was still on the phone.” He is handsome in a man’s-man kind of way. He was married, but not any more. Which is why he’s taking “a very lovely celebrity date whose name I can’t mention” to a Robbie Williams concert in Milton Keynes tonight.
Coutts says entrepreneurs such as Sharpe represent the fastest-growing area of their business, especially in the fields of property and construction, PR, IT and personnel recruitment. Another firm of bankers, C Hoare & Co, says the key entrepreneurs are in the dotcoms, biotech and the media. “It’s not just the sexy areas,” says Philip Beresford, compiler of The Sunday Times Rich List. “Take scrap-metal merchants. It was an industry full of little players. It only took someone to consolidate it all to make large amounts of money. We’ll see the same with waste-recycling.
“My impression is that millionaires are being created faster here than anywhere else in Europe, maybe faster here than anywhere else in the world,” adds Beresford, who has been conducting the survey of Britain’s wealthiest people for the past 15 years. “That’s because the City of London has so dominated the financial markets. And the scale of the riches is staggering. Surveys have shown that people in the UK – certainly people in the southeast – are getting richer than ever before. Even richer than Shanghai – and that’s saying something.”
When Beresford is compiling the Rich List, he doesn’t bother with property assets – it’s too difficult to find out exact mortgage details – or anyone worth less than £10m. Millionaires are everywhere. He is convinced that, in five years’ time, there will be 750,000 UK millionaires. “Almost everyone with a large detached house in Cheshire, or outside Edinburgh, or in Harrogate, York, Leeds or the home counties will be a millionaire sooner or later – if they’ve got a low mortgage.”
And as the rich get richer, more of their money is going offshore. And the tax havens are ready and waiting to bank it. There were only 25 tax havens in the 1970s, but there are now more than 70. “And 35 of those are linked to Britain,” says John Christensen, international co-ordinator of the Tax Justice Network. “Many are crown dependencies such as Jersey. The City of London is also a leading tax haven. For example, Mohamed al-Fayed negotiated the amount of tax he paid with the Inland Revenue. Could you imagine the man off the street being able to negotiate his taxes?”
Wayne Sharpe lives in a pretty mews house behind Harrods. It is in the London Borough of Kensington and Chelsea, which has more high earners (over £60,000) than any administrative region in the UK. “One guy I know says champagne is ‘currency’ in Kensington and Chelsea,” says Sharpe. “But that’s because he goes out clubbing a lot. He says the quality of girls you will attract depends on which ‘currency’ you put on the table. That’s his thinking process outside his normal investment-fund activities…”
