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According to the 2022 Schwab Modern Wealth Survey, Americans consider people with net worths of around $2.2 million to be wealthy and those with net worths of $774,000 to be financially comfortable.
Although it’s common to think of the wealthy as people who drive flashy cars or carry expensive designer bags, data on their spending patterns paint a different story. The wealthy enjoy vacations, but they also direct a portion of their wealth to create more wealth via their investment accounts.
The wealthy invest in retirement consistently, and they also invest in education. They take care of their health and, more often than not, pay their healthcare bills without incurring medical debt. They also tend to purchase high-quality products and food.
Here are the things the rich spend their money on that the poor and middle class don’t.
Healthy Food
Tom Corley, a financial planner and author of the book “Rich Habits: The Daily Success Habits of Wealthy Individuals,” spent five years studying 233 millionaires. What he found was that millionaires spent their money differently, especially when it comes to food.
According to Corley, the wealthy prioritize their health by purchasing whole, organic food. According to his data, 97% of poor people eat over 300 calories of junk food per day, whereas 70% of wealthy people eat less than 300 calories of junk food per day. He also found that wealthy people exercised more frequently than the poor.
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High-Quality Products
Corley’s research also showed that wealthy people were more likely to purchase high-quality clothing and furniture. They avoid buying fast fashion or cheaply made goods in favor of clothes or furniture that last much longer. Even if high-quality products cost more, the wealthy prefer longer-lasting products to cheaper items that have to be replaced frequently.
Experiences and Events
According to consumer expenditure data from the Bureau of Labor Statistics, the rich spend more on entertainment, which is a category that includes fees and admissions to sporting events, concerts and museums. It also includes pet toys, hobbies and playground equipment.
Pets
While there are approximately 218 million pets in the United States, how people spend on their pets varies depending on income bracket. According to data from the U.S. Bureau of Labor Statistics, people with incomes in the highest quintile spend over four times more on their pets than those in the lowest quintile.
Retirement
Data from the U.S. Government Accountability Office highlights the disparities in retirement account savings based on income level.
On average, people aged 51-64 in the highest income quintile had retirement savings of approximately $605,000. The middle-income quintile was much lower, at approximately $100,000. Finally, the lowest income quintile had an average retirement savings of around $75,000.
Unsurprisingly, this data showed that high-income workers contributed larger percentages of their pay to their retirement accounts. In other words, the rich make sure to spend a percentage of their incomes growing their wealth even more through investing.
Education
It’s no secret that getting an education is becoming more expensive. Interestingly, the top 1% of earners spend almost 6% of their income on education; the middle class spend just over 1% on education.
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Dubbed “inconspicuous consumption,” educational spending does not just refer to college expenditures. Rather, it can include private education for their children from pre-school and beyond.
Healthcare Bills
Americans of all socioeconomic classes have healthcare costs, but the ways in which the wealthy pay for their health needs differs from the middle and lower class.
According to a report from the think tank Third Way, approximately 13% of higher-income people have unpaid healthcare bills. Nearly 24% of the middle class have unpaid bills, and 22% of lower-income Americans have unpaid healthcare bills as well.
The report highlighted that the middle class is hit hardest with medical debt even if they have good health insurance, likely because they might not qualify for medical assistance programs.
Frequent Vacations
Data from the Bureau of Labor Statistics showed wealthy Americans spend considerably more on vacations. The highest quintile of income earners spent approximately $4,540 on travel in 2021 versus the $466 spent by the lowest quintile of earners.
The cost of travel includes food on trips as well as alcohol, lodging, transportation and entertainment. Although spending in this category dropped substantially for all income levels during the pandemic, it is on the rise once again.
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FAQs
The 10 things that millionaires typically avoid spending their money on include credit card debt, lottery tickets, expensive cars, impulse purchases, late fees, designer clothes, groceries and household items, luxury housing, entertainment and leisure, and low-interest savings accounts.
What are the 10 things millionaires don't do? ›
The 10 things that millionaires typically avoid spending their money on include credit card debt, lottery tickets, expensive cars, impulse purchases, late fees, designer clothes, groceries and household items, luxury housing, entertainment and leisure, and low-interest savings accounts.
What does the middle class spend their money on? ›
“The middle class often carries a load of debt, from mortgages to car loans and those pesky student loans,” said Larsen, noting that these financial commitments can eat into their discretionary spending and limit their savings. “Taxes and healthcare costs can also take a significant bite out of their income.”
What do the rich do that the poor don't? ›
Rich people sacrifice the present for the future.
They invest time and money into their future. For example, they invest time and money into their education, their planning, their careers and their value. They spend their nights improving themselves, their careers and their businesses. They face their problems.
What do super rich spend money on? ›
“In fact, some of the most expensive items the wealthy spend their money on include private yachts, art collections, exclusive celebrity experiences and top-of-the-line home electronics,” she explained. “No matter what it is, if it's expensive and luxurious, the wealthy will find a way to buy it.”
What do 90% of millionaires do? ›
Ninety percent of all millionaires become so through owning real estate.
What is 90% of all millionaires? ›
Real estate investment has long been a cornerstone of financial success, with approximately 90% of millionaires attributing their wealth in part to real estate holdings.
What do upper middle class people spend their money on? ›
Nicer Housing
“One thing that sets the upper middle class apart from the middle class is their housing budgets,” said Jake Hill, finance expert and CEO of DebtHammer Consolidation. He observes that upper-middle-class people and families can afford larger, more luxurious homes than most members of the middle class.
What do upper middle class people buy? ›
“Additionally, being in the upper middle class means you can easily afford more leisure purchases like recreational vehicles, sporty cars, and maybe even a small vacation home in popular vacation spots.” This is similar to what you might experience in the upper class, but perhaps a tier lower.
Is $4000 a month enough to live on? ›
The answer is yes, almost 1 in 3 retirees today are spending between $2,000 and $3,999 per month, implying that $4,000 is a good monthly income for a retiree.
Most wealthy people don't watch a lot of TV, according to Corley's findings, which he revealed on his Rich Habits website. According to him, 67 percent of wealthy people watch less than one hour of television per day versus the 77 percent of poor people who spend more than one hour in front of the TV daily.
What the rich don't work for? ›
'The rich don't work for money': Robert Kiyosaki warns that our wealth is 'designed to be stolen' by taxes and inflation — says the rich save these 3 'real' assets for protection.
What do the poor have but the rich need? ›
The answer to the riddle is "nothing." Nothing is greater than God. Nothing is more evil than the Devil. The poor have nothing. The rich need nothing.
What does the super rich buy? ›
Here are a few examples: Real estate: Rich people often buy expensive real estate, such as mansions, penthouses, and private islands. Luxury cars: Rich people also buy luxury cars, such as Ferraris, Lamborghinis, and Rolls-Royces.
How do millionaires spend their day? ›
Most self-made millionaires/billionaires have found something (a product or service) hat they do xcetiomally well, that is in high demand by many …. And they spend decades working at it 70 to 80 hours or week (no time for other pleasures, interests, and little time for relationshps or family).
What is secret lifestyle of the super rich? ›
Secret Lives of the Super Rich is an American television series hosted by Robert Frank airing on CNBC. The series explores how wealthy people live, what they buy and how they travel. It regularly features mansions, luxury cars and aircraft and expensive jewelry.
How do most millionaires go broke? ›
Poor Financial Planning
Rich people who don't create a financial plan often set themselves up for failure. They not only fail to properly track and manage their income and expenses — they also fail to prepare for unexpected events that can drain their money in a hurry.
What does a millionaire do all day? ›
How do millionaires spend their day? Millionaires spend their time on the things they know will bring them more income and wealth. That could be nurturing a solid friendship, investing in education, or delegating busy work to spend time on the most revenue-generating tasks.
What billionaire gives everything away? ›
After piling up billions in business, he pledged to donate almost all of his money to causes before he died. He succeeded, and then lived a more modest life. Charles F.
