Thanks to the recovering global economy, the world’s wealthiest individuals have regained their mega-spending confidence. Evidence of this can be found in the sudden up-tick in the number of mega-yachts being sold.

According to this Bloomberg article, boats over 100 feet are selling “very strongly”. Simon Clare, head of marketing for Princess Yacht, spoke to Bloomberg about the phenomena:

“Boats over 100 feet are selling very strongly as the very wealthy feel the crisis less and tend to buy bigger and more modern boats”.

The recovery in sales is very welcome, considering the beating the yacht industry took the previous year. International Boat Industry magazine found that European yacht sales plunged about 50 percent in 2009.

But who is buying these yachts? Juergen Tracht, head of Germany’s aquatic sports industry association offers some insight:

“Typical buyers for these boat categories like medium-sized entrepreneurs usually pay them with savings, and they still haven’t reached the level prior to the meltdown during the crisis”.

At first look, it doesn’t appear these are the Lambda personalities who were freely buying mega-yachts before the recession. But look at it another way: Many are still trying to recover their financial footing.

The people who are buying now are the people who feel compelled to set themselves apart from their friends, even if the size and price of the items is less than in earlier years. That is the mark of a true Lambda.

There’s an interesting story in the New York Times today about the coming bonuses that rescued banks will begin doling out to its employees. Setting aside the furor over whether it’s the right thing to do, I want to look at what happens after the money is awarded.

The article suggests that those who get the bonuses will indeed accept them. However it will be a quiet affair, not a flashy, borderline show-off event. Purchases made with bank bonus money are treated with secrecy, as one New York Times reporter found:

In the Hamptons, where real estate agents court bankers looking for summer homes, the sales are also expected to be a boon for contractors, movers and groundskeepers. “A community like the Hamptons depends on house trades,” said Diane Saatchi, an agent with Saunders and Associates who just sold a home to a banker for $4.9 million. “Don’t ask to talk to him about it, because he won’t,” Ms. Saatchi said of the buyer, deflecting a reporter. “They don’t want anyone to know they are buying.” That includes the banker’s extended family, she explained, because he is worried they will ask him for money.

A by-product of the global recession has been how people feel about wealth. More specifically, how people feel about individuals who have great wealth.

Instead of being seen as the fruits of hard work and business savvy, it’s instead being seen as a sign of extreme greed and selfishness. It’s too early to tell if this will be a short-term side effect, or if the public psyche has been forever altered by it.

The torrent of populist rage against bankers enriching themselves in the midst of a global recession has had an impact inside the banks, according to the article:

“Bankers are being told by their bosses to be careful,” said Janet Hanson, who was an executive at Goldman Sachs for 14 years and is a founding member of 85 Broads, a professional women’s networking organization. “I mean, how does it look if you got a $1 million bonus from Goldman Sachs and you are sporting around in a new Audi TT? People will hate you.” (To deflect criticism, Goldman announced last week it would pay its top 30 executives in stock only.)

As the global economy continues to recover, it will be very interesting to see what the longer term affects that the recession will have on people’s perception of wealth.

Was the rage and, at comes, contempt, because others around were suffering? Or is it the build-up of years of frustration? If it’s the latter, then perhaps we will see this phenomenon continue, long after the economy has fully recovered.

The Wall Street Journal’s Wealth Blog recently posted about how true luxury — “goods that are rare, expertly made and sold to a select few” — is on the rise in spite of the recession. The wealthy seem to appreciate the exclusivity of luxury, and the economic climate has widened the gap between those who can afford to spend on true luxury and those who can’t. In a recent survey of private jet owners, 94% defined luxury as ‘for one’s self’ rather than for the masses. This is in line with my my thinking, that luxury depends on how the individual interprets it.

While I didn’t have the chance to research this for my PhD, my feeling is that Lambda personalities are the early birds and will be the early majority to start spending on luxury again. I hope to have the opportunity to research in the future whether the purchasing cycle from early birds to late comers follows from Lambda to Theta. My colleague Randy has observed that Lambdas tend to spend more than Thetas on similar offers. Theta buyers buy smaller diamonds, for example.

We are now seeing Lambda consumers interested in bespoke (and more expensive) purchases while Thetas will potentially follow later. This could be explained by the yearning of the Lambda for novelty while Theta look for social affiliation so the society has to be created first so they can join it.

It seems that the economic crisis has put many luxury shoppers into a state of shock. We can’t forget that luxury is what makes us human: it allows us to choose. People learned quickly how to overcome this shock.
Lambdas have already started but Theta will follow. Thus all the claims that the cheaper stuff is out is premature. People will go back to Burberry but it will take some time since the more expensive things will be sold first. However, if we talk about an economic recovery in 2010, luxury recovery will start earlier, maybe in 2009.