Monday, April 9, 2012
America has 2.7 million very wealthy households that earn mover $250,000 a year. The annual income of these very wealth households as a group is around $1.5, though their collective net worth is closer to $23.3 trillion. Additionally, America has 58.5 million "affluent" individuals who earn $100,000 or more a year. While the average earner may believe that their wealthier counterparts spend frivolously and shop only at high-end boutiques, knowing exactly where these wealthy families spend their money can benefit those looking for investment ideas. Figures from a recent Ipsos Medelsohn Affluent Survey concerning the spending habits of the very wealth are below:
- Thirty-five percent of seriously wealthy American households intent to spend more this year than last if the economy continues to improve
- Only 27% of affluent individuals intend to spend more this year, 69% intend to spend the same as last year, and 4% intend to cut their spending
- Twenty-seven percent of affluent individuals plan to invest in “stock/mutual funds” in 2012
- Seventy-six percent of affluent individuals intend to take a “cruise or trip/vacation” this year
- Forty-two percent of affluent individuals plan to “redecorate/remodel/renovate” the outdoors of their current homes, and only 8% intend to “buy or build” a new home this year
- Seventy-four percent of the super rich and affluent shop at Walmart
- Seventy-three percent shop at Target
- Sixty-three percent shop at the Home Depot
- Only 6% shop at Brooks Brothers, 5% at Tiffany & Co., 5% at DKNY, 2% at Burberry, and 2% at Luis Vuitton
- Seventy-one percent of affluent individuals use paper coupons on a monthly basis, and 54% use online coupons monthly
- Only 8% of affluent individuals know what private equity firms do
- Only 26% of affluent individuals consider themselves to be “somewhat familiar” with private equity”
See Richard C. Morais, How the Rich Spend Their Money, Barron’s, Mar. 27, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.