7 Issues Excessive-Earners Refuse To Spend Cash On

Two young women walking away from a helicopter with a glass of wine in their hands.

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In accordance with U.S. Census information, solely 5% of American households earned $250,000 a yr or extra in 2020 (the median wage being $67,521). How do these high earners spend their cash? And are there sure areas the place they attempt to funds and save? From interviews with high-earners and monetary planners with high-income purchasers, GOBankingRates uncovered a number of widespread areas the place a few of America’s high earners refuse to splurge.

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1. Designer Clothes

Identify-brand clothes is the highest merchandise that Holly Johnson — budgeting knowledgeable, freelance author and creator of “Zero Down Your Debt” — refuses to purchase. Johnson has been incomes a six-figure revenue since she give up her job to put in writing full time a decade in the past. In 2021, she earned $422,000 via her writing.

“I refuse to spend cash on luxurious objects with model names, akin to designer purses or clothes,” she stated. “I purchase most of my garments at Goal or Goodwill, largely as a result of I believe new clothes is a waste and unhealthy for the surroundings. … We purchase most of our youngsters’s clothes used, too, they usually don’t actually thoughts.”

2. Luxurious Vehicles

Because the founder and chairman of Lynx Funding Advisory in addition to a registered funding advisor, Peter Tanous commonly works with purchasers who earn over $250,000 a yr. Whereas high-earners’ spending habits fluctuate, he’s seen that many select to not spend cash on luxurious vehicles.

“I’m stunned to look at what number of very, very rich purchasers don’t purchase status cars like Maseratis or Porsches–to not point out Rolls Royce or Bentleys,” Tanous stated. “Those I do know drive bizarre vehicles and SUVs which might be purposeful and comfy. They don’t must promote their privileged monetary standing.”

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Tanous’ observations match Kat Tretina’s expertise. As a finance author and co-founder of Freelance Author Academy, Tretina earned $210,000 in 2021 and is on observe to make $250,000 this yr from her freelance writing work.

“I refuse to spend cash on vehicles,” Tretina stated. “I used to work for a pharmaceutical firm, and everybody was attempting to maintain this picture, so yearly when bonus time got here, you’ll see brand-new Mercedes within the car parking zone. And that simply looks like a good way to not ever have cash within the financial institution. So personally, I at all times purchase an inexpensive, usable automobile and pay money.”

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3. Enormous Houses

Kyle Bloyd, a senior monetary advisor and vice chairman of Revolutionary Monetary Group, stated lots of his high-earning purchasers stick with a funds no matter how a lot they make.

“Most don’t spend on luxurious houses or vehicles, however some do,” he stated. “I’ve seen that those that do usually finance them. Those that finance are inclined to have much more in property and people who pay money have loads much less in property. I counsel letting the property develop. Some even use the investments to cowl their mortgage and vehicles, permitting them to not spend the money.”

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4. Journey Sports activities for Youngsters

Journey sports activities is one other space the place Johnson refuses to spend cash — and for extra causes than one.

“Journey sports activities have gotten utterly uncontrolled in our space, each as a result of price and the time funding required,” she stated. “We all know many {couples} with youngsters who spend their weekends in motels in separate states so as to be at video games and tournaments, so their household time is proscribed.”

However that doesn’t imply Johnson by no means splurges on journey. Quite the opposite, she and her household take pleasure in cruises and touring to unforgettable locations like Italy, Norway, Denmark and Sweden.

5. First-Class Flight Tickets

Flying firstclass could also be a fascinating alternative for some, however not for a lot of of Tanous’ high-earning purchasers.

“When touring as a household, the very rich will typically select financial system class on airplanes, eschewing their capacity to fly firstclass,” he stated. “When requested about this, the most typical reply is, ‘We get to sit down collectively and we get there concurrently the blokes using up entrance.’”

6. Costly Jewellery

A number of high-earners listed jewellery as one other merchandise they refuse to pay for.

“I’ve by no means had an costly piece of bijou in my life,” Johnson stated. “I nonetheless have the $400 engagement ring my husband proposed to me with 17 years in the past, and I purchase all my earrings at Kohl’s.”

Tretina agreed, saying she’s merely not “a jewellery particular person” and would “be simply as pleased with a $10 ring from Claire’s.”

7. Huge Holidays (Typically)

Lots of Bloyd’s high-earning purchasers restrict their trip spending when their investments aren’t performing nicely.

“Whereas the market is down, they usually don’t pay for these cruises or different extravagant holidays,” he stated. “The rich usually assume in another way whereas spending and attempt to watch out when mandatory.”

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In regards to the Writer

Jenny Rose Spaudo is content material strategist and copywriter specializing in private and enterprise finance, investing, actual property, and PropTech. Her purchasers embrace Edward Jones, Flyhomes, PropStream, and Actual Property Accounting Co. As a journalist, her work has appeared in Enterprise Insider, GOBankingRatesMovieguide®, and numerous smaller publications. She’s additionally ghostwritten a e-book and tons of of articles for CEOs and thought leaders. Earlier than going freelance, Jenny Rose was the web information director for Charisma Media, the place she oversaw three on-line magazines, hosted a each day information podcast, and managed the editorial content material for the corporate’s sturdy podcast community. In 2014, she graduated summa cum laude from Stetson College with bachelor’s levels in Communication & Media Research and Spanish. Throughout her faculty profession, she received two awards for her analysis and was named “High Senior” in each her majors. Discover her at jennyrosespaudo.com and join together with her on LinkedIn.

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