4 things rich people spend too much on, according to experts

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• Millionaires may be making a lot of money, but that doesn't necessarily mean they're the best at keeping it.
• Financial adviser Mark Scribner says the wealthy are squandering their money on luxury cars and household help.
• Billionaires also spend a lot of money treating their friends and family to expensive dinners.

The wealthy Really Are you really that different from us?

While billionaires may not impulse buy the $25 cat door you bought on Amazon, they still have the same spending habits as the rest of us. Some billionaires spend their money to impress friends and family, while others keep a low profile and maintain a diversified investment portfolio, just like the rest of us.

To learn from the mistakes of the rich, we spoke with Mark Scribner, managing director of Boston-based wealth management firm Carson Wealth and a financial advisor to billionaires. Scribner shared four things the rich do to overspend and what we can learn from their mistakes.

1. Boat or yacht

Have you ever maxed out your credit card to buy a pair of designer jeans that you'll only wear once just to impress your friends? Scribner says that wealthy people do the same thing, but on boats and yachts.

“Did you know that BOAT stands for Break Out Another Thousand Dollars?” Scribner jokes. Yachts are notoriously expensive to maintain and require a full-time crew. Scribner says most wealthy people splurge on these big-ticket items to impress others. “Some of them have never actually been on a boat,” he continues. “What a waste of money.”

2. A fleet of luxury cars

Just like with boats and yachts, the wealthy tend to overspend on luxury vehicles that they never actually use — these cars sit in the garage for months until it's time to show them off to friends, family, and coworkers.

“Most cars depreciate quickly if you stop driving them,” says Scribner. “So it's best to buy or lease one luxury car at a time and enjoy it. When the thrill wears off, you can just move on to another luxury car.”

3. Household staff, including a personal chef

We all have this fleeting dream of becoming so rich we'll never have to do housework again, but Scribner says that hiring house help is one of the biggest ways that the wealthy waste their hard-earned money.

“You can save a lot of money by hiring a cleaning lady who cleans every day,” Scribner suggests instead of hiring a full-time housekeeper. A personal chef will cost an average of $50 to $75 an hour, plus groceries, Scribner says. A full-time chef will cost an average of $100,000 to $150,000 a year, Scribner adds, which is significantly more expensive than cooking for yourself or ordering takeout.

4. Pay for dinner

Have you ever been out with friends and felt pressured to pay for dinner or drinks? Millionaires feel the same way.

Scribner says that while it's fine to treat your family to dinner every now and then, “paying your friends every time you go out to eat or go to a nightclub is a huge waste of money.” These acts of generosity can add up quickly, especially when you factor in bottle service, expensive champagne, and fine dining.

This millionaire's mistake teaches us how to set firm boundaries, no matter the size of our income: Even if other people expect you to pay for dinner, it doesn't necessarily mean you have to.

This article was originally published in November 2021.