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According to the 2022 Schwab Contemporary Wealth Survey, Americans consider people with a net worth of about $2.2 million to be wealthy and people with a net worth of $774,000 to be financially comfortable.
While we typically think of wealthy people as people who drive flashy cars and carry expensive designer bags, data on their spending patterns tells a different story. Wealthy people enjoy vacations, but they direct some of their assets toward creating more wealth through investment accounts.
Wealthy people consistently invest in their retirement and also invest in their education. They care about their health and often pay their medical bills without incurring medical debt. They also tend to buy higher quality products and foods.
Here's what the rich spend their money on, but the poor and middle class don't.
healthy food
Tom Corey, a financial planner and author of the book Rich Habits: The Daily Success Habits of Wealthy Individuals, spent five years researching 233 millionaires. What he discovered was that millionaires are different when it comes to how they spend their money, especially when it comes to food.
According to Corey, wealthy people prioritize health and buy natural foods. His data shows that 97% of poor people eat more than 300 calories of junk food per day, while 70% of rich people eat less than 300 calories of junk food per day. . He also found that wealthy people exercise more often than poor people.
high quality products
Corey's research also showed that wealthy people are more likely to buy high-quality clothing and furniture. They avoid buying fast fashion and cheaply made goods, preferring clothing and furniture that last longer. Even though high-quality products cost more, wealthy people prefer long-lasting products to cheaper products that need to be replaced frequently.
Experiences/Events
Consumer spending data from the Bureau of Labor Statistics shows that wealthy people spend more on entertainment, including admission and admission fees, to sporting events, concerts, museums and more. Also includes toys, hobbies, and play equipment for pets.
pet
There are approximately 218 million pets in the United States, but how people spend on them varies by income bracket. According to data from the U.S. Bureau of Labor Statistics, people in the highest income quintile spend more than four times as much on their pets as people in the lowest income quintile.
retirement
Data from the U.S. General Accounting Office highlights the disparity in retirement savings based on income level.
On average, people ages 51 to 64 in the highest income quintile saved about $605,000 for retirement. The middle income quintile was even lower, at about $100,000. Finally, the average retirement savings for the lowest income quintile was about $75,000.
Unsurprisingly, the data showed that higher-income workers contribute a higher percentage of their paychecks to retirement accounts. In other words, wealthy people always spend a portion of their income to further increase their wealth through investments.
education
It's no secret that education is becoming more expensive. Interestingly, the top 1% of earners spend almost 6% of their income on education. The middle class spends just over 1% on education.
Educational spending, known as “inconspicuous consumption,” does not only refer to spending on universities. Rather, it can also include private education for children from preschool onwards.
medical bill
Americans of all socio-economic classes have health care costs, but the wealthy pay for their medical needs differently than the middle and lower classes.
According to a report by think tank Third Way, about 13% of high-income people have unpaid medical bills. Nearly 24% of middle-class Americans have unpaid medical bills, as do 22% of low-income Americans.
The report highlighted that the middle class, even with good health insurance, may not qualify for medical assistance programs and are hit hardest by medical debt.
frequent vacations
Data from the Bureau of Labor Statistics shows that wealthy Americans spend significantly more money on vacations. His highest income quintile spent about $4,540 on travel in 2021, while his lowest income quintile spent $466.
Travel expenses include food, alcohol, accommodation, transportation, entertainment, etc. during the trip. During the pandemic, spending in this category fell significantly across all income levels, but it's on the rise again.
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