- Wealthy people snatched up bizarre items during the coronavirus pandemic – take, for example, this $US31.8 million T. rex , or this $US1.9 million pigeon .
- Many millennials and Gen Zers have also leaned into nostalgia-tinged purchases, stocking up on Patagonia vests that cost up to $US1,000 and trading $US1 million worth of Pokemon cards.
- Auction houses and online high-end marketplaces are seeing a record number of sales in some luxury categories, such as watches, jewellery, and handbags.
- Some of these buys are for fun, while others are investments into categories that have historically shown better yields than standard investment funds, Rob Petrozzo, cofounder and chief product officer of the online investment platform Rally , told Insider.
- These hobbies are also a result of the rise in what’s known as “solitary leisure” and the search for new status symbols, as the rich no longer have the experience economy – like travel to exotic destinations – to rely on.
- Visit Business Insider’s homepage for more stories.
“I want it, I got it.”
So sings Gen Z and millennial muse Ariana Grande in “7 rings.” The pop star goes on to detail all of the things that she can buy with her reported $US150 million fortune â€” eyelashes, diamonds, hair.
“Whoever said money can’t solve your problems/Must not have had enough money to solve ’em,” Grande, 27, croons.
During the pandemic, wealthy millennials and Gen Zers seem to have adopted the Ariana ethos. They’re pouring millions into everything from sports cards and luxury handbags to pigeons and 17th-century books.
Science explains their behaviour a bit: Research has shown that, in moments of instability, we are more likely to feel nostalgia, which might explain the turn towards investments in toy collectibles and vintage Patagonia fleeces.
And, with the fall of travel and the experience economy, the wealthy have been splurging on solitary activities like collecting art as they spend more time alone and at home. That, perhaps, has less to do with science, and more so with the appeal of scarcity: the pleasure and financial value of owning what others can’t have.
Based on a year’s worth of reporting on wealthy spending habits, these are the five broad categories that Insider saw high-net-worth connoisseurs flock toward in 2020 â€” and, finally, some theories why they did so.
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1. Children’s toys, cards, and collectibles
Millennials have been flocking to the toys of their youth in the past few years, buying trading cards, wrestling memorabilia, and other collectibles, according to investment and collectible experts spoken to by Insider.
Earlier this year, one Pokemon card was traded for a lot of cards worth $US1 million, and a Shadowless Charizard card sold for nearly $US200,000. That’s not to mention the 16-year-old who sold a basketball trading card of Giannis Antetokounmpo for $US1.8 million this year, after purchasing it for $US40,000 three years ago.
In early December, billionaires Steven A. Cohen and Dan Sundheim teamed up with collector Nat Turner on a $US700 million deal to take the collectibles authentication company Collectors Universe private. The company said that its shares tripled this year, as more people began to buy collectibles. Nostalgia holds both emotional and financial value. Over time, many childhood items become hard to find, which also increases their investment value, Rob Petrozzo, cofounder and chief product officer of the investment platform Rally, previously told Insider. Interest in buying and investing in toys has also risen as an asset class that shows better yields and is more interesting than standard investment funds, he added.
“There’s this emotional connection and passionate investment from something that you recognised from childhood or from a good moment in your life,” Petrozzo said. “The same collectors who are buying mint-condition cards might now be sitting on a $US20,000 or $US30,000 Hulk Hogan card.”
2. Vintage and contemporary luxury clothes, shoes, and bags
Consumers are also nostalgic for luxury retail and are snapping up vintage finds.
Consider the obsession with pre-millennium Patagonia fleeces. Scarcity is driving these to fetch up for as much as $US1,000 on eBay, The Wall Street Journal reported this month.
“There’s definitely a hype aspect to it,” Kelsey Silverstein, who runs vintage outdoor clothing store Orbital Outdoors, told The Journal. “People are looking for what’s really hard to get.”
Auction houses, too, are capitalising on the thirst for vintage luxury.
Christie’s is offering a collection of over 200 Supreme T-shirts expected to go for $US2 million and a jersey worn by Lou Gehrig expected to fetch $US1.5 million. It already sold off a pair of 1985 Nike Air Jordan 1 Game-Worn High sneakers for $US615,000, and Sotheby’s also auctioned a pair of 1985 Nike Air Jordans for $US560,000, after they were expected to go for between $US100,000 and $US150,000.
But even contemporary luxury items are benefiting from a boost during the pandemic, such as a Hermes Birkin Kelly bag that sold for 220,000 South African Rand ($US15,000) or a Rare Salmon Dial Audemars Piguet Royal Oak sold at Sotheby’s for $US441,000. Business Insider previously reported the recent Sotheby’s Important Watches live auction brought in $US10.4 million â€” up 27% from last year.
As reported by the New York Times, Sotheby’s has, so far, made $US425 million from hosting nearly 320 online auctions of art and other luxury items, compared to $US90 million last year. At Christie’s, the story is similar: Caroline Ervin, head of e-commerce of Christie’s jewellery department, told Bloomberg in December that it’s seen a 200% increase in the number of online sales for November and December.
3. Rare books and paintings, some by ‘activist collectors’
Both the book industry and art market took a hit during the pandemic, but that didn’t stop the ultrawealthy from splurging on arts and culture.
In the book world, Bloomberg’s James Tarmy reported in November, investments took shape in rare books and antiquarian collectibles.
Look no further than Christie’s autumn sales: a 1623 folio of Shakespeare’s comedies, histories, and tragedies for $US10 million, originally expected to sell for between $US4 million and $US6 million; a complication of works by Aristotle for $US475,000, above the expected $US200,000 to $US300,000 selling price; and a first edition of Charles Darwin’s “On the Origin of Species” for $US168,000 â€” it was, at first, expected to go for between $US90,000 and $US120,000.
Over in the art world, contemporary pieces continued to sell for big bucks. As previously reported by Business Insider, contemporary art is one of the most popular categories for millennials to invest in â€” and its allure has only continued to grow.
Many buyers have pivoted now to becoming ‘activist collectors’ to ‘support the artists and the voices that they believe deserve to be supported right now’
In June, Sotheby’s sold a 1981 Francis Bacon painting for $US85 million, while Christie’s sold a 1994 Roy Lichtenstein painting in July for $US46.2 million, and a 1967 Mark Rothko painting in October for $US31.3 million, as reported by Art Net’s Eileen Kinsella.
Mike Steib, CEO of the online art marketplace Artsy, told Insider that contemporary art has been Artsy’s biggest category this year, particularly in street art, works from the African Diaspora, and Black Figurative Art.
Many buyers have pivoted now to becoming “activist collectors” to “support the artists and the voices that they believe deserve to be supported right now,” he said.
“We’re seeing many more collectors consciously seek to collect works of artists of colour, LBGTQ+ artists, et cetera,” he said, adding that even non-wealthy people sought to decorate their homes with art during this time since they were spending more time at home.
Steib said the interest has helped Artsy have its best year yet, with e-commerce sales up by 170% in the past year. In fact, he added, Artsy sold more art this year to collectors than ever since it first launched in 2009.
4. Animals, dead or alive
The wealthy are also investing in animals, whether dead or alive.
An unidentified buyer spent $US31.8 million on an assembled Tyrannosaurus rex at Christie’s 20th Century Evening Sale in early October. The dinosaur, nicknamed Stan, was initially expected to sell for between $US6 million and $US8 million. It’s estimated to have died over 65 million years ago and was discovered in 1987, with additional skeletal remains excavated in 1993 and 2003.
“Whether it’s a $US30 million dinosaur or a $US50 million Ed Ruscha [painting], that is an asset class where people of extraordinary wealth believe that they’re making a sound investment,” Steib said.
People are also dropping millions on pigeons to partake in pigeon racing â€” pigeon connoisseurs tend to be a bit older in age, however. The hobby of pigeon racing began as a working-class sport post-World War One, but has since turned into a booming and prestigious industry in China. In November, pigeon “New Kim” sold for a record-breaking $US1.9 million. Her new owner is the same anonymous buyer who acquired the previous recordbreaker, “Armando,” for $US1.4 million in 2019.
Even in the midst of a recession, these birds are flying off the shelves.
Pipa, the auction house that hosted the New Kim sale, is currently hosting a sale of 800 racing pigeons. Bids for “Golden King,” a descendant of 2017 recordbreaker “Golden Prince,” were up to 204,000 euros, or around $US248,441, around mid-to-late December.
5. Bitcoin and stocks (via app)
In a less weird trend, the youth Intangible investments, like cryptocurrency and stocks traded on investing apps, may not be as random or weird as the wealthy’s other pandemic investments, but they have been on the climb in 2020.
Bitcoin is back and buzzing in 2020, surpassing its previous peak from December 2017. The cryptocurrency had a “wild run” in 2017, rising by over 1,300% and going mainstream. But bitcoin took a mighty tumble the next year, falling 80% from its peak, while other cryptocurrencies also slumped.
The hype is alive again, thanks to substantial millennial interest.
There’s no one clear reason behind the cryptocurrency’s massive rise. But the conditions of the pandemic and resulting search for an investing alternative that won’t be impacted by potential inflation, more widespread availability on PayPal and Square, and new Wall Street regulators, could be contributing to its current â€” and continuing â€” rally.
Stock-trading startup Robinhood has also seen explosive growth during the pandemic thanks to a new generation of novice traders flocking to the stock, options, and cryptocurrency platform,Insider’s Graham Rapier reported.
Users, bored during quarantine, have come to view day trading in a volatile stock market as an “exciting hobby,” the New York Times wrote. But the boom hasn’t been entirely positive: It’s triggered outages and angry customers, and amateur traders have lost thousands of dollars through high volume day trades.
The free-trading investing app, whose average user is 33 years old, added 3 million users to its current total of 13 million this year alone. The company even raised $US200 million in funding in December.
Why people bought these bizarre items
These quirky investment hobbies reflect the obvious: In the wealthy’s quarantine world, there is simply not much else to do.
Leisure spending has taken on various forms since modern capitalism was born, beginning with the “conspicuous consumption” of the nouveau riche who flaunted luxury goods in the 19th century. When the 21st-century world was more open, the wealthy gravitated toward inconspicuous consumption representing a critical part of the experience economy â€” health, wellness, and high-end education â€” that signalled their cultural capital.
Now that schools are closed and health and wellness are uncertain, they have shifted to splurging on activities and hobbies enjoyed alone to stave off boredom and find a new type of status symbol. In the process, it’s possible they have retreated to the ways of the nouveau riche â€” at least for the time being.
Daniel Yoder, the department chair of the Recreation, Park, and Tourism Administration at Western Illinois University, told Insider earlier this year he thinks the uptick in solitary leisure will drop off when the pandemic ends.
Until then, even in the midst of chaos, the ethos of Ariana Grande still holds true for the wealthy: “I see it, I like it, I want it.”
They got it.