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Elite Traveler – ET Insider – December 14, 2010

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ET Insider – December 14, 2010

Elite Traveler Insider –

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December 14, 2010

Elite Traveler Insider

By Douglas D. Gollan, President and Editor-in-Chief, Elite Traveler Magazine  

Welcome to the latest issue of Elite Traveler Insider, the bi-weekly newsletter designed to update our top partners on trends in the private jet lifestyle.  This information is provided to offer a better understanding of how to target these globetrotting elite travelers, their impact on your business and other trends that affect you.  Remember, private jet travelers are paying up to $10,000 per hour to fly by private jet, so these super rich consumers could be and should be your best customer.  We talk about them and how you can get more of them and more from them.

In this issue:

1. Mauritius Goes Elite In Pursuit Of Destination Weddings

2. How much could you lose before you notice?

3. The Very Rich Are Even Richer

4. Washington Post: $250,000 and In The Red

============================================================ Not another magazine or newspaper in that stack of unread mail: With over six private jet trips every two months, that’s at least six chances for wealthy private jet travelers to see your advertisement in Elite Traveler. And even better, share it with friends on the jet! ============================================================

1. Mauritius Goes Elite In Pursuit Of Destination Weddings

According to reports, Indian Ultra High Net Worth Dilip Jiwarajka has become the first person to make use of a new tourism initiative by Mauritius to attract the big and expensive Indian weddings to the picturesque country.

Jiwarajka of family-owned Jiwaraj Textiles Industries Ltd, has chosen Mauritius to wed his daughter, Srita to Amit Puri, and the wedding was scheduled to take place from November 26 to 29.

This wedding was to be the first such affair under the new declared tourism policy aimed at attracting large destination weddings to the country, Sudesh Lallchand, senior advisor of tourism minister, said in a news report.

Three resort hotels — Intercontinental, Grand Mauritian and Le Meridien, located in the northern part of the island, have been booked by the Jiwarajka to accommodate a thousand special guests coming from India, England, Pakistan and the United States.  The guests will arrive through three chartered flights from Air Mauritius and a private jet, Lallchand added.

Four days of joyful festivities have been scheduled to entertain the guests, and present will be the well-known music director duo of Sajid-Wajid.

This first wedding is being considered by the tourism ministry as a major breakthrough in its attempt to target high net worth families to hold marriage ceremonies in this country, whose main forex earner is tourism.

Two other weddings are in the pipeline. Bodha said that Mauritius is offering a red carpet welcome to these groups and is providing all infrastructure and facilities.

============================================================ With 41 trips per year, including 11 intercontinental trips and 3+ principal residences, we know where you’ll find elite travelers: in their private jets and in private jet terminals. It’s why we’ve invested in providing BPA audited circulation to private jets and private jet terminals in over 100 countries. ============================================================

2. How Much Could You Lose Before You Notice?

Ever lost twenty or a hundred dollars and not noticed?  Certainly we all have misplaced some change.  The amount of attention is probably correlated to how much money you have, so it was interesting to recently read about a Hong Kong businessman who traveled via private jet to Teterboro airport and ended up being defrauded for more than $800,000 thanks to an unscrupulous limousine driver.

Tony Chan, the wealth Feng Shui master from Hong Kong, hired a limousine to take him from Teterboro airport to a meeting in New York City. The problem started when he gave his American Express card to the driver, Peter Rahhaoui, of Flushing, Queens, who copied the card and proceeded to go on a months-long spending spree racking up hundreds of thousands in unnoticed fraudulent charges.

Mr. Chan, apparently too busy to check through his charge card statements, knew nothing of the scheme until American Express security specialists noticed a suspicious pattern of activity months later. Rahhaoui’s spending spree sometimes hit $19,000 in one month. Prosecutors stated that the tally of unauthorized charges totaled $794,986.

Of course, Mr. Chan actually never even noticed the stolen money, nor did the people who pay his bills!  I guess sometimes it’s hard to keep track of what the boss spends while he is away.  We can only assume he spent quite a bit more than the thief!

============================================================ Spotting Fakes: How can you be sure that a publisher is really sending out the number of copies he or she says? How can you make sure they are actually putting copies on private jets? Ask for the BPA or ABC audit statement. You can find our BPA statement here. ============================================================

3. The Very Rich Are Even Richer

According to Crain’s New York:  “Fueled largely by a booming Wall Street, the share of income going to the tiny sliver of New York’s wealthiest-the top 1% of households-soared to 44% in 2007 from 17.2% two decades earlier. The average income of the city’s super rich was $3.7 million, and the price of entry into this exclusive club of 34,625 members was $642,000.

While the city’s rich have gotten richer, everyone else is treading water at best, according to a report to be released Monday by the Fiscal Policy Institute, a liberal think tank. The income share of the bottom 90% of households here was 34.5% in 2007, compared with 59.1% in 1987. Even as the city’s economy grew at a rate of 2.9% annually from 1990 to 2007, the hourly median wage fell 8.6%, to $15.50; median household income fell 2.2%, to $45,000.

“There has been considerable growth,” says James Parrott, the institute’s chief economist, “but it has not meant higher real wages or higher family income for most New Yorkers.”

Nationally, the top 1% earned 23.5% of total income in 2007, compared with 12.7% in 1987.”

Of course Super Rich New Yorkers also pay their share to keep the city moving.  Their presence in turn helps keep city coffers filled, schools staffed and streets safe. The top 1% pay more than half of the city’s personal income taxes.

============================================================ Would you buy a diamond without a certificate? Would you fly on a plane that hadn’t been certified as safe to fly? Would you buy milk in the supermarket that didn’t have a ‘sell by’ date? Before you buy advertising, next time a publisher says they have distribution on private jets or in private jet terminals, ask for their Circulation statement from ABC or BPA. Ask for them to show you the number of copies going to private jet travelers. You can find our BPA statement here. ============================================================

4. Washington Post: $250,000 and In The Red

Do you think a consumer household with a $250,000 Household Income is a good target for luxury goods and services?  With the recent debate over extending tax cuts for folks who make over $250,000 a year, The Washington Post did an in-depth analysis of where they money goes for a professional career family of four making that magic mark.  Below are some highlights:

– By any measure, a $250,000 household income is substantial. It is six times the national average household income, and just 2.9 percent of couples earn that much or more. “For the average person in this country a $250,000 household income is an unattainably high annual sum – they’ll never see it,” says Roberton Williams, an analyst at the Tax Policy Center, a nonpartisan think tank in Washington.

– Just how flush is a family of four with a $250,000 income? To find the answer, this analysis considers the household budget, piece by piece, from housing costs to health care, Internet service to summer camp for kids and even the cost of the dog. And of course: taxes. BDO USA, a national tax accounting firm, computed the total state, local and federal tax burden of a hypothetical two-career couple with two children, earning $250,000.

– The outtake? They’re comfortable. They’re secure. But they’re not Donald Trump.

– The analysis assumes that this couple – let’s call them Mr. and Mrs. Jones – are both working professionals. They take advantage of all tax benefits available to them, such as pre-tax contributions to 401(k) plans and medical, child care and transportation flexible spending accounts.

– They have no credit card debt, but Mr. Jones racked up $40,208 in student loan debt in undergraduate and graduate school, and Mrs. Jones borrowed $22,650 to get her undergraduate degree (both amounts are equal to the national averages for their education levels). They also have a car loan on one of two cars, and a mortgage for 80 percent of the value of a typical home in their community for a family of four, which includes a toddler and one school-age child.

– The bottom line: Living in high-tax areas on either coast can leave our $250,000-a-year-family with little margin. Even with an additional $3,000 in investment income, they end up in the red – after taxes, saving for retirement and their children’s education and a middle-of-the-road cost of living – in seven of the eight communities in the analysis.

– Taxes take a hefty toll. Everything from property taxes and the alternative minimum tax to the taxes tacked on to cell phone bills and the cost of gas, when combined, takes a large bite out of earnings – in some cases even more than the federal income tax toll. And it’s not likely to get better anytime soon. States and municipalities have been steadily raising income tax rates to close gaping holes in their budgets.

– Property taxes are also increasing even though real estate values have cratered. And sales taxes are hitting record levels, in some areas nearing 10 percent. Gas taxes, alcohol taxes and surcharges on things such as flights, ferry rides, soda, vehicle registrations and rental cars have also climbed.

– Being in the red on a $250,000 annual salary might still seem surprising. But taking responsibility for their retirement and their children’s future is costly. They are maximizing contributions to two 401(k)s and all flexible spending accounts available to them, and they are squirreling away $8,000 a year into college funds.

– Their spending is conservative, based on national averages for professional couples with two children. Not included are those run-of-the-mill pay-outs for charitable deductions, life insurance premiums, disability insurance, legal fees – or monthly sessions at the salon or gym membership.

– As educated professionals, they buy books, newspapers, magazines; they own computers and pay for Internet access.

– The Joneses don’t take lavish vacations. They don’t belong to a country club, play golf or drive luxury cars. They don’t have a swimming pool or buy designer clothes. They don’t own or rent a second home and don’t send their children to private school. And they don’t shop for groceries at high-end markets (they spend what the Department of Agriculture defines as a “moderate” amount on food for the average family of four). – In reality, to make ends meet, this couple would have to cut back on discretionary expenses – take a pass on a new suit, skip an annual vacation and drop some activities for the children. Unfortunately, the family would also probably save less, at the expense of retirement or college funds.

– And costs assumed by the Joneses could be significantly higher if their circumstances changed. If they worked for themselves, for example, they would have to foot the bill for their full medical insurance premium, which averages $14,043. As it is, they pay 30 percent of the premium and their employers pay the rest.

–  For folks like the Joneses, $250,000 goes quicker than you think.

A full analysis can be found at this link.

============================================================ With 41 trips per year, including 11 intercontinental trips and 3+ principal residences, we know where you’ll find elite travelers: in their private jets and in private jet terminals. It’s why we’ve invested in providing BPA audited circulation to private jets and private jet terminals in over 100 countries. ============================================================

All the best,

Douglas D. Gollan Group President and Editor-in-Chief

 

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