In a world with vastly different financial habits, the spending habits of the wealthy stand out as particularly interesting. Everyone needs to manage their finances, but wealthy people often exhibit clear patterns in how they allocate their resources. Understanding these differences provides valuable insight into wealth accumulation and financial success.
In his book Rich Habits: Daily Success Habits of Wealthy Individuals, Tom Corey reports on the habits of the very rich. Below are some of his insights into how wealthy people spend their money differently than other people.
are you wealthy? How does your spending compare?
healthy eating and exercise
One of the striking observations made by the author is that billionaires prioritize health and spend their money on organic food.
He found that poor people eat far more junk food and exercise far less than the rich.
quality
Another notable difference in spending habits is the emphasis on quality over quantity. Although it may be tempting to choose cheaper alternatives or shop more frequently, wealthy people prioritize value and durability when making purchases. Rather than chasing trends or accumulating possessions for status, they invest in quality goods and experiences that provide lasting satisfaction and utility.
education
Wealthy people often spend more money on education than the average person. Investing in your education is considered a long-term investment in yourself and your family, increasing your earning potential and potentially opening up opportunities for advancement. Corey emphasizes the correlation between knowledge acquisition and wealth accumulation and emphasizes the value of intellectual investment.
Wealthy individuals may allocate resources to prestigious private schools, tutoring, extracurricular activities, and higher education institutions. Additionally, you may prioritize ongoing learning opportunities such as workshops, seminars, and professional development courses to enhance your skills and knowledge in a variety of areas.
By investing in education, wealthy individuals aim to gain a competitive edge, increase their intellectual capital, and position themselves for success in their personal and professional lives.
conscious consumption
Contrary to popular belief, the spending habits of the wealthy are not necessarily extravagant and wasteful. Many wealthy individuals practice careful spending and conscious consumption, carefully considering the impact of their purchases on both their personal finances and the wider world.
Whether it’s supporting sustainable brands, philanthropy, or ethical business practices, wealthy individuals often align their spending with their values and priorities.
strategic spending
One key difference between wealthy people and average consumers is their approach to spending. While many people may prioritize immediate gratification and impulse purchases, wealthy individuals tend to focus on strategic investments that provide long-term returns.
Whether investing in stocks, real estate, or business, the wealthy allocate their resources diligently to accumulate and preserve wealth.
Experiences
Recognizing the lasting value and fulfillment that unforgettable experiences bring, wealthy individuals often prioritize spending on experiences over material possessions. Unlike physical goods that depreciate in value over time, experiences such as travel, fine dining, cultural events, and adventure activities create cherished memories and enrich lives in meaningful ways.
Wealthy individuals can allocate resources to quality travel experiences, such as luxury accommodations, private tours, and special excursions to exotic destinations around the world. You may also enjoy fine dining experiences at famous restaurants, attend well-known cultural events such as concerts, plays, and art exhibitions, and take part in adventure activities such as safaris, yachting, and hot air ballooning. Wealthy people prioritize personal growth, enrichment, and enjoyment by investing in experiences, creating lasting memories, and cultivating rich, fulfilling lifestyles.
Note: Experiential spending doesn’t have to cost a lot of money. And it’s one of the key ways to buy happiness.
retirement savings
Data from the U.S. General Accounting Office highlights the disparity in retirement savings based on income level. Wealthy people save more for retirement than anyone else.
On average, people aged 51 to 64 are:
- The highest income earners had $605,000 in retirement savings.
- The middle income quintile had only $100,000.
- The lowest income quintile had an income of $75,000.
Click here to learn more about average retirement income.
Wealthy individuals often utilize a variety of financial tools and expertise to optimize their spending and investment decisions. This may include working closely with your financial advisor, tax professional, and estate planner to develop a comprehensive wealth management strategy tailored to your specific goals and circumstances.
By harnessing the power of financial knowledge and expert guidance, wealthy individuals can navigate complex financial environments and capitalize on opportunities for growth.
new retirement planner
yes. The average net worth of NewRetirement subscribers is significantly higher than the national average. In fact, this is an order of magnitude higher than the average retirement savings of the highest income earners cited above.
We found that wealthy people want to take advantage of financial tools and expertise, and they want to save money while doing so. The $120 NewRetirement Planner gives you complete control over your financial forecasts, with output comparable to those offered by more expensive advisors.
