(Confidential to society: I'm sorry that I just openly suggested Wal-Mart bombard you with magnetic rays as you walk through their door just so they could get you to buy more pillows, but really, do you think they hadn't thought of that already?)
Anyway, the people reading my mind/blog who aren't Wal-Mart (I'm thinking... peanut brittle? really?)(Actually that seems about right) are the folks over at NPR and NYU, with the former reporting on a study the latter did in which an NYU professor found that "the more expensive the painting, the less the return on investment," that result coming as a surprise to people who don't, you know, know about stuff.
Of course the more expensive something is the less there's a potential for return on your investment. If you buy something for $1, all you have to do is find someone who's willing to pay you $1.10 for that thing, as I did to this kid who bought the rest of my peanut brittle yesterday at Wal-Mart, and you've got yourself a 10% return on your investment. And lots of people have a dollar, so your market is huge. To use Drake's Equation in a novel way, if 10% of all the people in the world have $1, and 10% of those people are looking to buy something and 10% of those people looking to buy something are interested in your thing, you've got 6,580,657 potential customers. (There being 6, 580,657, 003 people in the world as I type this.)
But if you spend $119,900,000 on something and want to make just one percent on your investment, you've got to find someone to spend $121,099,000 on that painting.
There are only 56 people in the United States worth over $100,000,000, so your market is decidedly more limited.
On the other hand, there are fifty-six people in the United States alone worth over $100,000,000, a number that seems kind of staggering to me. In the US, the most expensive place to live is New York City, where the median income is just over $63,000. There are 8,175,133 people in New York City, and that means that 4,000,000+ people in New York city make less than $63,000.
Just for fun (?) let's think about something. What if you were a $100,000,000-aire, like, say, you had selfishly bought a painting for $119,900,000 because you have no soul, but you decided to do something nice and bring those 4,000,000 people up to the median income line in New York? Could you do it? And for how long? Remember, you've got to leave something for yourself, so let's leave you, Selfishy McSelfishson from Selfishville, $1,000,000 per year so you can still go clubbing, and let's assume you're 25.
To live 75 more years -- you've got medical insurance, you'll make it -- you need $75,000,000. (I'm assuming you've only invested in art and so get no return on your money, Mr. McSelfishson). That leaves you with only (?) $25,000,000 left to dole out, really not so much when you think about it.
What can you do with that $25,000,000? Giving it away just in dollops, like that millionaire who literally throws money out the window because people have forgotten what happened in the French Revolution, gets all those 4,000,000 people just $6.25.
If, though, you invested it in safe, long-term investments in a trust and directed the trustee to pay out the income each year to the 4,000,000 people we're theoretically saying have nothing, you would be able to give away about $500,000 every three months. (T-Bills, a safe investment that would make you a patriotic person, Mr. McSelfishson, pay about 2.04% every 90 days.) Or $2,000,000 per year without ever cutting into the principal.
So what if you were to take that whole $100,000,000 and put it into T-Bills and live off 1/2 the return? Why, then, you could give away a million dollars a year and still have $1,000,000 per year to live on and all that money you have would never even be touched, so your son, Selfishy McSelfishson, Jr., would inherit it completely unscathed.
That million per year wouldn't, again, help directly, not everybody -- but that million per year could provide grants for kids to go to college, or matching funds to open small businesses, or perhaps rent assistance, or funding legal services, or buying text books for a school. That million per year in found money would do a lot of good, Mr. McSelfishson.
Or, you know, you could blow it on a painting you have to keep in a vault and never ever let anybody see plus the painting's ugly anyway.
(PS: "Eleven of the 20 highest prices ever paid at auction have occurred since 2008, when the global economy all but collapsed," says this article, which goes on to note that many art buyers aren't buying the art for an investment. They're just getting it because they like it. In the worst economic conditions anyone alive can remember, people have money to throw away on pretty pictures.)
Wait, wait! What
happened in the French
Revolution? Was it bad?