Quora Answer: Why Do Rich People Like to Buy Luxury Yachts?

The following is my answer to a Quora question: “Why do rich people like to buy luxury yachts?” 

By itself, a yacht is always a depreciating asset, with tremendous upkeep, making is a massive cost centre.  Beyond being an obvious status symbol, a yacht has a good many uses, which may not be apparent to the masses.  It can be used as a means to move some assets between domiciles, bypassing customs and tax authorities, notwithstanding the border controls.  This is especially useful for oligarchs and despots who need to flee a country quickly, since a yacht carries much more than a private jet, and does not need to file a flight path.  For example, when a certain politician in a neighbouring country was caught in a huge embezzlement scandal, his party lost a general election.  In the aftermath, he was seen at the airport with his wife and luggage.  His passport was impounded, and he was forbidden from fleeing the country.  Crowds and the media gathered there.  In the meantime, his ill-gotten gains were loaded on a yacht, and cash, jewellery, and art were moved offshore. 

For those not obviously politically exposed ultra-wealthy, a yacht is an ideal place to conduct business away from prying eyes, with minimal risk of surveillance.  A lot of business from the procurement of sensitive equipment, to the negotiation of major deals, to outright hustling, happen at sea.  Doing a deal on your own private yacht grants you a certain sense of control you will not have in the boardroom.  For example, in the region, a great many arms deals are negotiated on these yachts, anchored offshore.  These negotiations involve payments to various parties.  It would be inconvenient for these people to be seen together onshore. 

Finally, a private yacht is a useful means to entertain guests, and for people to misbehave, away from the public.  This shared misbehaviour helps some people bond.