The World Wealth Report showed the number of high net worth individuals rising by 7.3 per cent in 2004, but they are having to pay more for ...

The World Wealth Report showed the number of high net worth individuals rising by 7.3 per cent in 2004, but they are having to pay more for luxury items. And the ultra-high net worth are having to pay the most.

Price inflation for top-of-the line luxury goods and services rose at a faster pace than mass-produced consumer goods, according to research from the World Wealth Report, compiled by Merrill Lynch and CapGemini.

The study points out that the Forbes’ Cost of Living Extremely Well Index, which measures price changes to a basket of luxury goods and services rose by 4.2 per cent in 2004. This compares with a 3 per cent rise in the US consumer price index.

But for those wanting top-of-the-range luxury, they are seeing prices rises even more steeply. The report constructed an “Ultra-High Net Worth Individuals Index”. This focuses on price changes of products and services such as private jets, Rolls Royces, and luxury yachts.

The UHNW index rose by 11.3 per cent in 2004.

“This rising trend-line translates into a two-fold challenge for Ultra-HNWIs: To maintain their lifestyles and purchasing power, the world’s wealthiest must not only closely manage the people who manage their wealth, they also must contend with an inflation rate that is nearly four times higher than the ‘regular’ inflation,” said the Wealth Report.