(DC): Region’s rising wealth brings new luxury brands and wealth managers

[mahatmakanejeeves]

The DC area is in its own financial bubble. I was at a local shopping center yesterday. It was, as usual, crowded. I've never seen it desolate. By contrast, I went through downtown Baltimore a few months back. Go to Google maps and select street view to see what Howard Street in downtown Baltimore looks like.

The money in DC comes from being associated with government work, not from working for the government. In other words, lobbyists, contractors, and other hangers-on.

Keep paying those taxes.

Disclaimer: I'm sure Aston Martins are nice cars, and I don't mean to get on the bad side of DUers who own an Aston Martin. It's just the dichotomy that has me flummoxed. I don't see that it can last forever.

Region’s rising wealth brings new luxury brands and wealth managers
http://www.washingtonpost.com/local/regions-rising-wealth-brings-new-luxury-brands-and-wealth-managers/2012/12/17/19376172-3f27-11e2-ae43-cf491b837f7b_story.html

By Annie Gowen, Dec 17, 2012 10:39 PM EST

The Washington Post With plenty of two-income highly educated families, the D.C. region already has a reputation as one of the most affluent in the country. But the area is fast emerging as a home to the truly rich as well.

High-end luxury retailers are responding. Brands such as Aston Martin are expanding their operations into the area — betting, for instance, that there will be plenty of customers who can afford the $280,000 sports car James Bond drives in the movies. Nearby in Tysons, a Saint Laurent store and the high-end electric car maker Tesla are also set to open their doors

The region’s top one percent of households make more than a half million dollars yearly — far more than the national average for the one percent, according to a study of Census data by Sentier Research, an Annapolis-based data analysis firm.
....

Data on assets can be difficult to come by at the metropolitan level because the sample sizes are so small, experts say. But wealth managers such as Traver point to industry research, for example, Capgemini’s Metro Wealth Index, which recently estimated that the number of high-net-worth residents in the region has grown from 127,000 to 166,000 since 2008, a 30 percent increase. They define “high net worth” as investable assets of more than $1 million, excluding the value of a primary home and collectibles.

The comments are great. Here's one:

Nosh1 wrote:
12/18/2012 8:55 AM EST

These millionares are more than welcome to spend millions of their own money on their "hobby" of Aston Martin dealership. I find it laughable they did it now of all times rather than in 2002-2008 time frame when federal procurement spending in the DC area was expanding at ~15% per year.

Folks who think this level of spending is sustainable, or won't be affected are simply lying to themselves. We've seen it before, when Federal spending had a half dozen years of run up, mostly benefiting the DC area then it tanked nearly 30% in 4 years when Clinton became President.

These guys and their customer base have gotten wealthy from Federal Contracting. Not because they invented something, or even run their business well. They take a task that the Fed's could be doing inhouse add on a 50% surcharge, and send them the bill.

And these aren't the big guys we are familiar with, the Lockheeds, Boeings and SAIC's of the world, these are guys who decided to get into Federal contracting 6 years ago, spent 6 months bidding on proposals and then won a 3 million contract for 2 years worth of "support" services" to some random dept among the agencies. Which is fancy talk for providing 2, 26 year old college grads to take notes at meetings and put powerpoint presentations together for them, billing $150 an hour while paying the employee $60 an hour (overhead included), letting the owner of this fly by night "contracting company" collect 180 an hour (90x's2), 40 hours a week ($375K a year) to sit in his home office and golf half the week away. By year two, he starts looking around for another 2 or 3 million dollar contract, rinse and repeat. How do I knw? My brother has been doing it for years.

People get upset over the billion dollar contracts the feds hand out while completely ignoring the thousands of these "minor" 2 or 3 million dollar contracts a year.

DC went from not being on the list 15 years ago, to having the richest two counties in the nation every year. Coincidence?