‘The things you own end up owning you.’ There was a prophetic ring to these words by Tyler Durden, lead character in Chuck Palahniuk’s mid-‘90s novel Fight Club, when one considers this was long before the term ‘sharing economy’ began to appear – and service giants such as Uber, Airbnb and Spotify emerged, changing the way we live and own.
His foresight was uncanny – fast forward to 2016, and our attitude towards material things is indeed shaping the way we access big-ticket items, and manage our personal wealth.
As we fall down the Google rabbit hole of renting (or sharing) versus buying, concepts such as open-source communities, collaborative consumption, access economy, fractional ownership and asset sharing flicker by. We seem to be evolving into minimalist ‘transumers’ — consumers who value experience over ownership. The joy though, is that we can do this without sacrificing style and comfort.
BIG-TICKET RENTING
One way to free ourselves of excessive material possessions is to rent them, and, make no mistake, the high-end rental market is booming. Only, this particular market has nothing to do with landlords and tenants, and everything to do with watches, designer handbags, classic cars, artworks, antique furniture. Think it and it’s available to rent.
The trend is to choose ease and instant gratification over the practical hassles of ownership and commitment, opting for variety over the limitations of one item.
In New York on business? How about you whisk your loved one away on an Uber chopper ride ($3 000) to an Airbnb villa in the Hamptons for an Independence Day break? Have a smart fundraiser to attend? Kit yourself out with a Louis Vuitton Twist shoulder bag (at $400 per month versus $3 250 to own) or a pair of Elizabeth and James ‘Montgomery’ sunnies ($48 to rent for eight days versus $185 to own). Finish off the ensemble with Christian Louboutin heels ($50 per week versus $845 to own).
Celebrating a very special 40th birthday? Choose a hassle-free travel adventure. Make like Bill Gates and rent an island in the Seychelles for $150,000 a week, Or help magician David Copperfield meet his rental quota by leasing his 700-hectare private island in the Bahamas.His foresight was uncanny – fast forward to 2016, and our attitude towards material things is indeed shaping the way we access big-ticket items, and manage our personal wealth.
THE NEW NETFLIX
Rental companies are popping up everywhere. Eleven James is described as the ‘Netflix for luxury watches’, while JetSmarter is known as the ‘Uber of private jets’. Through Haute Vault you can access diamonds by the dozen. In their own words, you simply ‘choose it, flaunt it, and return it’.
In case you momentarily tire of that Kentridge above your mantelpiece, Hang Art and Art Remba are doing similar things with art.
Yacht charter companies are also booming. Who wants their prized possession to languish in a Caribbean yacht basin, decreasing in value each year and with new barnacles attaching themselves to the hull, when they could be making a smart return? According to The State of Wealth, Luxury and Yachting report, ultra-high net worth individuals know this, which is why they took 21% more charters last year than they did in 2014.
WEALTH MANAGEMENT
Jamey Lipschitz, Wealth Manager at Sanlam Private Wealth, underscores the financial benefits of renting, which he says are twofold. ‘Renting allows the individual to place the capital that would otherwise have been tied up in a depreciating asset into one that potentially grows over time — like property or equities. Furthermore, the rental amount can potentially be used as a tax-deductible expense and assist in reducing the individual’s annual taxes.’
Jamey also points to the lifestyle benefits of being able to use an item once, something rich people may do even if they own it. ‘You can also use it without the hassle of storage requirements — and the Joneses are none the wiser regarding whether you in fact owned the item or not.’
While we may not yet have an abundance of such sites available locally, South Africa’s discerning consumers are mimicking this global trend, be it through sophisticated apps, basic retail websites, exclusive members-only clubs or swap sites.
Contact Sanlam Private Wealth or speak to your wealth manager to see if renting is the best financial option for you.
"After a global financial crisis, the new breed of consumers want to get the most from their money. They’re image conscious and brand aware, but service these desires with a different attitude to money. And here the sharing and renting economy makes perfect financial sense."
RAYMOND DE VILLIERS - Futurist at Tomorrow Today