00:16
Rolls Royce: the epitome of luxury and exclusivity. The number produced is limited. Each individual unit is made to order. They cost upwards of half a million euros - more than a house, more than the average European earns after 25 years of work . A luxury car that very few can afford – which makes the sales figures even more astonishing.
00:43
Aufsager Rolls Royce:
Rolls Royce has achieved a record profit last year and sold more cars than ever before in its 100-year history – all in the midst of the economic crisis. It seems the luxury industry knows no crisis.
01:01
The factory at Goodwood in southern England finishes off their wealthy customer’s desired car with lots of custom-made extras: the interior of a Rolls Royce alone requires 450 hours of work to be completed, all by hand.
01:19
Wood, fine leather and stainless steel are all used, as well as gold and silver for the Spirit of Ecstasy, the famous winged ornament for the bonnet.
01:33
OT I
Is that real gold?
01:34
OT Frank Tiemann
Yes, this is gold-plated stainless steel. Which is an alternative to solid silver.
01:39
This is the parallel world of the rich and the super rich.
01:44
OT Torsten Müller-Ötvös
There are customers who have three, four, five, six vehicles in the garage and there are other customers who have up to 100 vehicles in the garage. What one can say is that our customers usually have a garage akin to the well-stocked wardrobe of others.
02:01
OT I
What characterises a typical Rolls-Royce customer?
02:03
OT Torsten Müller-Ötvös
There are celebrities from film, TV, radio and royalty… so they come from everywhere. But there are also a lot of ordinary business people who have done something in their lives, who have set a goal that they have achieved and want to celebrate. Buying a Rolls Royce is also a special reason to celebrate. Of course all our customers are united in that they are very wealthy and have made their fortunes and they now want to own the best car that you can buy. This is undoubtedly a Rolls Royce.
02:36
02:43
How can it be that the luxury industry is booming like this? While across Europe there is austerity and benefits are being cut.
The explanation is surprisingly simple: the rich of this world have become even richer, since the economic crisis in 2009. Each year they have seen an average increase in their wealth of 6 percent. In some countries this increase has been as much as 18 percent. This can be read in an article in the Global Wealth Report, written by the Boston Consulting Group on the development of global wealth.
03:12
03:13
Who are these rich, how do they live? And how do they manage, even in times of crisis, to become richer?
3:18 (NY) -----------------------------------
03:28
In Manhattan, New York, lives many super-rich: of the 1,000 billionaires in the world, 58 call this home.
03:39
At the same time, one in seven Americans currently rely on food stamps, and one in six has no health insurance.
03:47
Aufsager NY:
This is the heart of the financial industry, the largest stock exchange in the world. Here the financial crisis started and from here it spread to the whole world.
03:58
Several billion shares are traded here each day. Peter Tuchman is one such trader: he has traded on the New York Stock Exchange for nearly three decades.
04:15
He was present at the crash of Lehman Brothers, the starting point of the financial and banking crisis. Pictures of him were seen around the world.
04:24
OT Peter Tuchman, Trader (English)
The impact was huge, it was felt worldwide ...
The consequences felt were enormous and global. No one could believe that this had really happened. If markets fall it causes incredible stress, everyone is scared. I have now been here for 26 years, and, besides the crash of '87, this was the most exciting and nerve wracking period. Fear and panic were everywhere, it was incredible.
The energy here was unbelievable.
04:52
04:57
Next to us is a live circuit television broadcast in motion. Manuel Koch, Wall Street correspondent, reports on the rapid development of the markets for German investors.
05:08
OT Manuel Koch
The ratios have shifted totally. People used to be happy when you had made a two or three million dollar profit. Today we see large companies like Apple, who record a 6 billion dollar profit, and whose dealers are not even satisfied with that, because they were expecting seven billion in one quarter. That's not even turnover. That is pure profit. I imagine many people watching cannot understand how someone with a six billion dollar profit is not satisfied.
05:35
The strong performance of financial markets recently has exacerbated the wealth divide. Whilst property value increases virtually by itself, people without property are becoming poorer.
05:45
OT Peter Tuchman, Trader (Victor)
For everybody who is making money there is somebody who is losing money ... if someone wins, another loses. For those people who have no money and no assets, who have lost their jobs, the cost of living has risen, homes are more expensive ... Those who had no money, now have even less. And those who have money, now have even more ... it makes a lot of sense.
06:08
06:09
OT I
Young people have demonstrated here for three months at Occupy Wall Street. How do you feel about that?
06:15
OT Manuel Koch
Everything here was blocked off for around three months, it was like a high security prison. Many people were escorted around. Of course it is a shame when you see young people who pay big money for their education but who currently have no chance in the job market.
06:33
06:33
There used to be opportunities for huge profits here: hedge fund manager Jon Paulson made a record $ 5 billion here a year ago.
06:41
Manuel Koch
You can see quite clearly: one can only make such high profits by entering a high-risk situation. It is mostly a risk at the expense of others, i.e. to bet against something. For example, in the case of Greece you bet on the collapse of a country, attempting to make the largest gains. Many think this is morally reprehensible but it makes no difference for the hedge fund managers, because they want to make their profits. They are in the position of Kings.
07:05
07:06
OT I
The Global Wealth Report from the Boston Consulting Group has found that the global wealth is increasingly concentrated in the direction of a few very rich. Why is this so?
07:17
OT Manuel Koch
One can say that the rich are getting richer and the poor are getting poorer. The money of the rich works for them too. They begin with the capital they have. Even if they only gain a small return, it adds up to more and more. I think it's often the case that people worked hard for their money and it shows in America even more clearly than in Europe.
07:42
(7:50) ---------- ----------------
07:53
In the U.S., almost more than any other country, the dream that anyone can do it exists.
Klaus Heidegger realized that dream. The former alpine skier from Tyrol built up a small natural cosmetics company, Kiehls, into a mega-company and eventually sold for rumoured $ 150 million. He then created the brand MBT with the money, creating healthy shoes with curved soles.
08:18
Flying is his biggest hobby. He has just flown into the family holiday home in his private plane.
08:23
OT I
Hello, Good day!
08:24
Klaus OT
Hello Christa!
08:26
OT I
How was the flight?
08:27
Klaus OT
Flight was fine. I was down in Palm Springs because it is always nice. It was pleasant. The kids are staying at the bottom, my daughter and wife. I fly back again tomorrow.
08:36
08:37
He lives in a beautiful $800m villa set in park with Hollywood-esque surroundings. Outside, a fleet of expensive cars and motorbikes confirm a life of luxury.
08:51
Klaus has had both family and career luck, having a wife and three children. He has moved from being a skier of humble beginnings to a multi-millionaire, living in the world of celebs ...
9:12
… in sunny California.
09:24
OT I
Do you ever regret having come here?
09:26
OT Klaus Heidegger
No, definitely not. The Tyrol is also nice, but there is a very different character here in Venice Beach California, Los Angeles.
09:37
OT Klaus Heidegger
America is unique. I think the American dream is that, in America, you can make it if you work really hard at it. Of course, the options are different: the country is so large with its 300 million people. In Austria there are seven and a half million. These are completely different dimensions. I think that because of that the Americans are very open when it comes to business. Even if something fails once, that's part of the success. One cannot always do things correctly, you will make mistakes, and things fail. The next time you try to do better - that is the success of the Americans!
10:15
10:18
Yet for most the American Dream seems to rarely succeed: social mobility has become lower than in Europe.
10:25
Klaus OT
There is the Cirque de Soleil!
10:29
But American optimism seems undiminished.
10:34
Klaus OT
There are movie actors here. Here at Broadbeach live people like Dustin Hoffman, Nicolas Cage, Cher - they are all based here in Malibu, usually on the weekend. They also meet at Starbucks.
10:56
OT I
Do people recognise you too sometimes?
10:58
Klaus OT
Yes, many people were my customers, at Kiehls and at MBT. Dustin Hoffman was wearing MBT as was Sylvester Stallone. In Kiehls we have had customers like Richard Gere, Heidi Klum, Cindy Crawford, Julia Roberts.
11:21
We go to Klaus Heidegger's house in Malibu, a second home in which he is investing. Those who can afford to leave their money to do the work pay only 14 percent profit tax - much less than the payroll tax for workers. The rich retain much more ... which can then be reinvested.
11:40
Klaus OT
I took up riding since I built the stables.
11:50
Higher taxes for the wealthy in the U.S. are a hot topic. Klaus Heidegger thinks nothing of it. He has adopted the American mentality, which is less composed of envy and more influenced by the belief in unlimited possibilities.
12:04
OT Klaus Heidegger
In America if you are successful, people look up and say: I want to do the same. If you drive a good car or whatever, no one says: this is a show. You have fun with it, people are supportive and say, I want to do the same, which would be a great thing. In Europe and in Austria, there is more envy. I think that's bad, because it's bad for the people to feel envious; it holds you back.
12:33
OT I
Now I would like to talk about taxes: President Obama himself is calling to retrospectively tax Warren Buffett, one of the richest people in the United States and his friend. What do you think about that?
12:45
OT Klaus Heidegger
I know a lot of rich friends, who pay huge amounts of tax. Just as I know those who pay too little. What the Americans have which the Europeans do not are foundations. Charities, as they are called in America. Americans spend a lot of money on charities. When someone reaches a certain level, he must give back to the community. The Americans do this a lot, that's the difference. Lower taxes are always better than too much tax.
13:18
(13.20) ----------- -----------------------------
13:20
No one wants to pay more in taxes, including those in Germany. Here, capital gains are taxed at 25% - more than in the U.S., but far less than the 43% payroll tax that is taken off workers.
13:35
The gap between winners and losers has increased dramatically, even with the stagnation in the growth of most manager salaries.
13:45
Aufsager:
In Munich, there is big money. In the suburb of Grünwald, out of every hundred inhabitants, one fifth have the income of a millionaire, the income of at least one million euros a year. We will now go to a particularly successful section of Munich.
14:00
14:09
On the 32nd Floor of the Highlight Towers is one of the most modern office buildings in the business district of Schwabing.
14:21
Roland Berger owns Europe's largest management consultancy firm. It is also one of the largest worldwide, with offices in 40 countries. He also worked his way up from humble beginnings; today his fortune is estimated at several hundred million. His collection of modern art alone is worth millions.
14:43
Behind his desk is a picture of the German artist Georg Baselitz.
14:49
OT Roland Berger
Germans, as well as Austrians, can interpret a falling eagle in many different ways. Since Baselitz started his paintings 40 years ago the world has turned upside down. He has taught people that so much in the world is slanted differently.
15:09
15:09
At the height of the economic crisis, Berger advised agency staff to reduce costs: by reducing fringe benefits, provision of unpaid overtime and dismissal of employees. However, he doesn’t speak in the same vein today.
15:26
OT Roland Berger
You should not recycle any citations that may have been made during the economic crisis in 2008 or 2009. Just because the economy has slumped in the world, we should not generalize about such measures: I do not think this leads to anything. It is quite clear that every company must be economically efficient and be more cost-efficient as a standard; otherwise people lose their jobs in the company because the company disappears.
15:57
15:58
Research shows that many companies have used the crisis to their advantage, acting in ways that would have been impossible in a different climate.
16:08
OT I
In Germany there is quite a heated debate on distributive justice. Do you sometimes feel you almost have to justify your wealth?
16:17
OT Roland Berger
I do not need a warrant for my success and prosperity. I've worked towards my success and when at the end there is some extra money, then I see this as a result of the work's success. The fact is that the upper income groups and lower income groups have drifted apart.
16:46
OT I
There are cases where a manager earns more in one day than a kindergarten teacher earns in a year. How do you view this development?
16:54
OT Roland Berger
This is a sign of globalisation. On the other hand, say you have a manager who now works 10 times as intensely as 30 years ago ... The complexity and size, thus the absolute responsibility, of the MD for the 500,000 or 450,000 jobs in Siemens, is sizable. I do not feel it is extortionate if an executive of Siemens, who previously earnt 2 million Deutsch Marks, is now paid 10 million euros.
17:40
17:41
What about responsibility? Why should managers get their bonuses even when they operate poorly?
10 million euros a year - that's 46,000 euros for each working day.
(17.54) ----------- ----------------------------
17:55
But the really rich are those who increase their wealth by millions each day - and that’s without working. Ideally, they live in Switzerland, with bank secrecy and tax packages; a haven for billionaires.
18:09
Ueli Mäder is a sociologist at the University of Basel and is concerned with social inequality. The disparity in Switzerland is especially large: here the richest 2 percent of the population have as much as the remaining 98 percent. One of these super-rich, Ingvar Kamprad, founder of furniture retailer IKEA, has been living in the Vaud canton since the 70s.
18:32
OT Ueli Mäder, sociologist, University of Basel
Take the municipality of Epalinges, where Mr. Kamprad lives. The canton of Vaud has a flat tax, that is, if I use the calculations of Attac, then Mr. Kamprad, although worth 50 billion francs, only pays 200,000 francs of tax. This is more than manageable, even if it is raised, especially as he has gained 90 million every day this year.
19:11
OT I
You say (in your book) that the rich have become richer. How did they do that?
19:16
OT Ueli Mäder
Firstly, in the wake of the financial and economic crisis it is becoming apparent that enormous profits on the stock exchanges were made possible in that time. And secondly, we can see that during the financial and economic crisis, the rich have gripped the public sector and the state in an arm lock.
19:40
19:41
While the state saves the banks, keeps wages low and grants benefits, the rich from other countries can transfer their money here to benefit from the local taxes in Swiss banks. An estimated 44 billion euros of Austrian money is here.
19:57
OT Ueli Mäder
Switzerland is a very secretive country, willing to control the tourist costs that exist in other countries. Switzerland is keen to attract people who have a lot of money. One in ten billionaires worldwide live in Switzerland. So far, this principle works.
20:30
20:31
We would like to visit Ingvar Kamprad. However, the media-shy multi millionaire will not receive us. Kamprad's wealth has grown in recent months by 14%, or EUR 90 million every single day!
20:46
OT I
We are here in Epalinges, above Lake Geneva. Here dwells one of the richest people in the world.
OT Ueli Mäder, sociologist, University of Basel
Yep, this is true.
OT I
That's Ingvar Kamprad, Ikea's founder. Why he has chosen this as his place of residence?
OT Ueli Mäder, sociologist, University of Basel
Whether he personally prefers it, who knows. But it is also safe for his money here, because here he has to pay exceedingly little in taxes.
OT I
What does this mean exactly? What taxes do they pay?
OT Ueli Mäder
What exactly he pays in taxes I don’t know. But he is one of those who benefit from lump sum taxation. This is calculated according to the rent of the house. This may mean that he pays only 200,000 francs. An extremely low amount compared to what would be paid otherwise, estimated at 2500 times the amount.
21:42
21:44
Therefore, Kamprad avoids an estimated 400 million euros in taxes a year.
21:49
OT I
Is it a topic of interest here in Switzerland that one of the richest people is living here paying very little taxes?
OT Ueli Mäder
This is controversial. There are those people who only remark on the fact that Mr. Kamprad lives here, and that he brings prestige. And there are others who say it drives up land prices, which is discouraging and disheartening. This leads us to recognise that as the value lifts, others must have two or three times the amount of francs before they can spend it.
22:18
22:19
This debate is little seen the Swiss media: the subject of money is considered taboo - Discretion is part of the complete package for rich foreigners.
--------------------------------------- 22:27
22:31
We are in London, a microcosm of Russian high society. They could live anywhere in the world, but London is their preferred place of residence: low capital levies, security, the best private schools and a high glamour industry.
22:51
The hostess arrived 12 years ago with her banker husband from Moscow. She is herself a banker, an engineer, an economist, and is committed to cultural exchanges and Charities. Elena Ragozhina, now a publisher, is celebrating the 100th edition of the luxury magazine 'New Style'.
23:09
Elena Ragozhina OT (open)
about Russian people in London
23:11
23:11
A glossy magazine specifically for Russians in London. With articles about the Romanovs and Pushkin. Sponsored by the glamorous luxury brands, real estate and investment offices, specializing in the affluent Russian clients in London.
23:29
OT Elena Ragozhina, publisher, New Style Magazine
There are a lot of wealthy people, many of them earn money from oil .. There are a lot of wealthy Russians here, they have oil, gas, are in the steel business, or they are bankers, you name it. It is very much in vogue that the family lives in London. Many have moved here, the men fly to Russia and the family is here in London. This is a lifestyle ... It's their lifestyle.
24:02
Oligarchs like Roman Abramovich, Oleg Deripaska and Boris Beresosky live in London. As money is no object, the prices are rising fast. London has part of the most expensive real estate in the world.
24.14
OT Elena Ragozhina, publisher, New Style Magazine
Before the Russians arrived, Arab’s moved in and prices went up: the prices went into orbit when the Arabs began to buy real estate. Then came the Russians, now there are wealthy Chinese. And I know of a real estate agency that is currently booming with Greeks and Italians. They have a crisis in their country and rich people are trying to protect their money by buying real estate in England. This is a good investment ... they think it's a good investment.
24.46
24.50
A top investment would be a house on Chester Square. Plastic overshoes are required during the visit so the luxury property will not be damaged.
25:11
800 square feet on six floors, fully furnished, under floor heating and an alarm system - the equivalent of 40 million euros. A bargain compared to the 100-million loft in Hyde Park, which the real estate agency also offers. There are enough interested parties.
25.28
OT Noel de Keyzer, real estate agents
We already had a lot of interest and the house is only six weeks on the market. Above all the interested parties are from abroad, from Saudi Arabia, Iran, Malaysia, the United States. Customers in this high-price sector want a turnkey home where they can move straight in without having to worry about anything. They want it fully furnished and, in this case, whatever is inside is included in the price, the equivalent of 40 million euros. Besides the paintings, which can be valued at 4 million euros ... you can also purchase all the artwork for another 3.25 million pounds.
26:02
OT Noel de Keyzer, real estate agents
So this is the ... This is the ground floor, where there is wine cellar with a range of red wines, white wines and champagne....
OT I
Does the wine come with the house?
OT Noel de Keyzer, real estate agents (Marcus Waibel)
Absolutely ... Absolutely, absolutely ... the wine is included.
And then … And here is the gym. This is a fully equipped gym.
26.22
26.23
OT Noel de Keyzer, real estate agents (Marcus Waibel)
A lot of the Russian buyers ... Many of the Russians who purchase houses move permanently to London. Last year, we had two similar houses sold to Russian families who now send their children to school here. Others, such as the Malaysian family who are interested, would never really live here. This would be one of several homes which they own all over the world.
26.46
-------------------------------------
26.51
The 40 million-€-house is now sold.
As this parallel world of the super-rich blossoms, the disparity between the financial top and bottom is increasing. According to forecasts it will grow even further. And current economic policies will not prevent this but, on the contrary, contribute to it.
27.14
In the past half hour alone, whilst you have watched this report, the 10 richest people in the world earned 70 million euros.
27.31 END