It wasn’t that long ago that an executive or business owner might have shied away from buying a new yacht because of the sensitivity of spending big money when millions of people were losing jobs. It was all about optics. They didn’t want to seem oblivious or callous with so many people struggling.
What a difference a few years makes. With the economy recovering (knock wood) at long last, the reluctance to spend on luxury items is also ebbing. Improvements in jobs and housing, combined with pent-up demand and the wealth effect created by the booming stock markets, are giving boat sales a lift.
Something else has returned, too. There’s some swagger back on the docks. Confidence. It’s not the old days, to be sure, when legions of Thurston Howell III wannabes strolled the boat shows with the equity from their inflated homes spilling out of their pockets. But big spending is back.
Witness a headline in the New York Times last week: “High Rollers in a Buying Mood.”
That piece begins with a Cleveland business owner who last year bought three Mercedes-Benzes, two for himself and one for his wife, spending in total about a half-million dollars.
“I look at it as, I don’t have a boat,” Matt Hlavin told the newspaper. “I feel confident about the economy and my business.” The story described Hlavin as owning seven businesses, mostly concentrated in manufacturing.
It’s no secret that confidence and boat sales walk hand in hand.
About 4½ years ago I wrote a column with the headline, “What happened to conspicuous consumption?” At that time, big spending wasn’t dead, but it was pretty wounded. Profligate spending was out and we had entered what was tagged a “new age of thrift.”
The recent economic collapse will affect many people for many years. If you are one of the millions still unemployed or underemployed or if you’ve lost your home, the Great Recession may well be life-altering for the long run.
For the more fortunate, life and work and recreation go on, which includes buying boats and cars and so on.
The Times story ends with a quote from the Rolls-Royce president for North America, who said the barrier to buying for the wealthy wasn’t money, but “cultural sentiment.” Rolls-Royce, by the way, is now looking at four consecutive years of record sales, according to the report.
“Our customers never lost the ability to buy,” Eric Shepherd told the newspaper. “They may have lost the appropriateness to buy.”
I’ll end with the last two sentences from the column I wrote in the spring of 2009, when the economy was still extremely fragile.
“Be sensitive, obviously, to the plight of others, but remember that if you decide to defer your dreams, you do so at a risk. No one knows for certain what’s around the next bend, how many hours are left on the engines.”
Don’t forget to live.