Super Rich Continue to Spend..

[SteveR]

The article below is from Roaming Times, a RVing newsletter.
Despite slowing economy 'super rich' continue to spend  - Roaming Times

"
NEW YORK, Jan. 31 2008 -- Despite continued news of a looming recession, 80.3 percent of the "Super Rich" (consumers with net worth of $30 million plus) will increase their spending on luxury goods and services. This is according to the Elite Traveler/Prince & Associates 2008 Affluent Consumer Spending Survey conducted January 10-18, 2008. The survey polled a panel of more than 600 affluent consumers who had a net worth of at least $1 million. Overall the wealthy expect the economy to worsen in 2008. However, 84 percent of the Super Rich said the current economic environment represents an investment opportunity, and they will continue to spend more on luxury products and services and increase donations to charitable organizations more than ever before. The survey also reports that affluent consumers have little faith in the government's ability to "fix" the present economic situation...."

The article was based on interviews with 600 people in the "Mass Afflent" grouping...those with over $1 million in NW.

The article cuts the "Mass Affluent" into three pieces.

Super Rich..those with NW over $30 Million
Rich...........those with NW between $10 and $30 Million
Affluent......those with NW over $1 Million

The Super Rich will continue to spend on luxury items and 80% will even increase their spending this year.

The Rich will back off on luxury items based on prices.

The Mass Affluent will essential stop buying luxury items.

A couple of things are obvious. The Super Rich are not as affected by a slowing economy because they have so much $$. I can't imagine having $30+Million. A measly $2Millon for a Marathon Prevost conversion motorhome would be a drop in the bucket.

The Mass Affluent are not rich. Having less then $10 million does not make you rich in America anymore. Having more than $1 million makes you "affluent" but not rich. I know we have discussed these limits before but this is the first time I have seen them layered like this.

So, what will you do this year? Buy more luxury items, back off or stop?

 

[DangerMouse]

I am not certain what is defined as being a luxury item. We do not qualify as rich however I can't see our spending patterns change.

Our charitable donations will remain at the same level, however this year I am going to stick to 4 major donations instead of the 30 smaller donations of 2007 which resulted in non-stop begging letters asking for more.

We will likely buy a Mac Air sometime this year. However we did buy a Mac workstation last year so that is more of the same.

Vacations are probably going to be even more plentiful this year. So far we have 2 trips to Hawaii, a trip to Vegas and 1 trip to Australia planned, so Hawaiian Air will be the recipient of most of our travel funds this year.

Overall I expect our income to be slightly lower in 2008 than 2007 but spending will remain the same.

 

[bbbamI]

 

[HFWR]

SPAM, SPAM, SPAM...

Hey, where'd that cutie pie disappear to?

 

[bbbamI]

Which pie would that be?

 

[Notmuchlonger]

"So, what will you do this year? Buy more luxury items, back off or stop"


We have no plans on changing our spending habits.

 

[mountaintosea]

I never started buying "luxury" goods.

 

[unclemick]

I never started buying "luxury" goods.

Helped a guy move the other day - the neighbors full sized pickup we borrowed had a 'free' mind you free concrete six foot parking curb in back to put traction weight on his snow tires. To think for my little pickup I had bought 'luxury' sixty lb bags of tube sand from Ace Hardware at retail. But I did only buy one snow tire from Tom's used tires this year.

However - according to the article - having been affluent for several years, I may loosen up and spend the big bucks cause I'm not getting any younger. Get that second snow tire from Tom and pass on Salvation Army's sidewalk sales and go straight to a J.C. Penny sale and spend some big bucks.

No big cruises or vacations planned - but my passport is renewed for ten years and we'll see how long February gets.

heh heh heh -

 

[Nords]

The Mass Affluent are not rich. Having less then $10 million does not make you rich in America anymore. Having more than $1 million makes you "affluent" but not rich. I know we have discussed these limits before but this is the first time I have seen them layered like this.
So, what will you do this year? Buy more luxury items, back off or stop?

Well, in four months we're going to buy a good used car. We might even pay more than $7000 (the price of our last good used car). Does that count?

Until then, I'm going to see if I can figure out how a survey company determines that someone is worth >$30M, >$10M, or "just" >$1M. I want audits of tax returns & brokerage statements.

Otherwise it's probably the same company that's been telling us many retirees go back to work because they're feeling [-]broke[/-] bored & unfulfilled.

 

[calmloki]

Helped a guy move the other day - the neighbors full sized pickup we borrowed had a 'free' mind you free concrete six foot parking curb in back to put traction weight on his snow tires. To think for my little pickup I had bought 'luxury' sixty lb bags of tube sand from Ace Hardware at retail. But I did only buy one snow tire from Tom's used tires this year.

However - according to the article - having been affluent for several years, I may loosen up and spend the big bucks cause I'm not getting any younger. Get that second snow tire from Tom and pass on Salvation Army's sidewalk sales and go straight to a J.C. Penny sale and spend some big bucks.

No big cruises or vacations planned - but my passport is renewed for ten years and we'll see how long February gets.

heh heh heh -

Hey Mick - sounds like we're similiar: Plan to sell my worktruck '93 BMW touring (stationwagon) at some point - one of the bleeding rear tires had several free Les Schwab patches in it and they declined to patch it further. Spent weeks dithering about 2 or 4, shoeing the 15" or 16" wheels, buying local or Tirerack - fun sticky tires or maybe state cop car winter tire takeoffs at the local state auction. Factoring amount of tread, use, season, weather expected, shipping cost, mounting and balancing cost and ability (there's a real good race shop locally i like to use).

After all that i went to the local junkyard and paid $20 for a pair of decent tread cheapo brand tahrs - added $25 for the race shop to mount and balance them and all is well. It was funny - picked the best tread pair out of three matching - got home and was cleaning them up and found a hole in the sidewall i could put three fingers in! Took it back and swapped for the other one. Then sent Vanguard Prime MM $15k out of this month's rent. I crack me up.

 

[SteveR]

...Until then, I'm going to see if I can figure out how a survey company determines that someone is worth >$30M, >$10M, or "just" >$1M. I want audits of tax returns & brokerage statements.

Otherwise it's probably the same company that's been telling us many retirees go back to work because they're feeling [-]broke[/-] bored & unfulfilled.

I suppose they just ask those they interview. Sort of like here on the board. There is no way to know NW of anybody here anymore than on a telephone poll. I would guess they conclude a certain audience (magazine subscribers of luxury items) might have a NW to afford them much like FIREes are not exactly "average" NW either. How they "determine someones net worth" seem irrelevent to the discussion. I don't see any focus on having retirees return to work in this article. Rather, it reports the results of a poll of 600 "affluent" folks who answered some questions about possible purchases of luxury goods in 2008. The point of posting it was to share what these so called "affluent" folks think of the current economic situation and to start some discussion around folks slowing down on non-essential purchases this year.

 

[Marquette]

I'm pleased to announce that our household has completed its projected 2008 budget. I'd like to thank all members of the planning committee, the pre-planning committee and the planning committee committee for their diligent and timely work on this effort.

The largest monthly expenditure remains "investing like a mofo" with allocations in that group split between 401(k), SEP IRA, taxable accounts and emergency funds.

The second largest monthly expenditure will be "mortgage and related moneypit expenses".

"Food" is third on the list in spite of the fact that it has been pointed out that one member of the household could "stand to lose some weight"

The largest change from the 2007 budget is that a purchase of land "aka, capitalistic expansion and agression" is anticipated in November. This assumes that targets of 6 months living expenses and 20% of the land purchase price are actualized. If actualization is not realized than land purchase will be forwarded to the 2009 budgetary committee for consideration.

In sum, 2008 planned expenses are in line with 2007 planned expenses. 2007 actuals were well within the accounting department's threshold in comparison to 2007 planning. CPI-P numbers have not yet been tabulated but are expected to beat CPI-U and remain relatively flat.

 

[gandalf42]

"Luxury items": What other folks buy

"Essential items": What I buy

Nope, don't have any plans for buying luxury items.