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Discussions of affluence in the US often employ a threshold of $100,000 in household income to define that status, yielding a group whose sheer size—more than one-fifth of the US population—makes it important. These days, though, an income at the low end of that bracket will strain to support what feels like a middle-class lifestyle in high-priced metro areas. A new eMarketer report, “Auditing the Highly Affluent in the US: 10 Questions and Answers About People with Serious Money,” focuses instead on the higher reaches of affluence, examining the smaller population whose income and/or net wealth makes them highly affluent.
Highly affluent people feel they were smart about making money, and they don’t want to look stupid in spending it. They are as determined as anyone to get good value when they buy.
March 2015 polling by Experian Marketing Services captured this tendency, which manifests itself in everything from showrooming to couponing to simply waiting for things to go on sale.
It is hard to walk the aisles of a discount store without tripping over a rich person. A report
by Unity Marketing and the American Affluence Research Center (AARC) published in February 2015 cited data from Unity’s 2014 Shopper Track research that showed sizable percentages of millionaires having shopped at discount stores in the past three months: 31% at Target, 25% at Costco, 21% at Wal-Mart and so on. “The simple fact is, [high-net-worth] shoppers patronize all the same kind of stores that everybody else does,” the report said.
Affluents’ frugality can take the form of forgoing very big-ticket categories. In a September 2014 round of polling by the AARC, US affluents were asked whether they planned to purchase a number of major items in the next 12 months, including motor vehicles, boats, cruises and vacation homes. A majority of respondents with net worth less than $6 million planned to buy “none of the above,” as did about four in 10 of those with net worth above that level.
One would expect highly affluent consumers to spend above-average amounts on just about everything, and the latest Consumer Expenditure Survey data from the US Department of Labor Bureau of Labor Statistics confirms that they do. But the disparity in expenditures between those in the income bracket of $150,000 or more and total households—or even those in the $100,000-and-higher class—is not as large as the disparity in incomes might lead one
to anticipate. The simple reason is that really affluent affluents spend a smaller proportion of their income than other people do.
As the Unity Marketing/AARC report put it: “The typical US millionaire makes lifestyle choices about spending that will lead toward their personal goal: accumulating wealth, not material possessions.”
eMarketer corporate subscription clients can view the full report here.
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