Being wealthy intuitively means that one has enough financial resources to not worry about spending. And while this means that the rich can pretty much afford anything they want, their spending behaviors are not that predictable.
So, let’s have a look at the things rich people spend the most on.
According to CNN Business, philanthropic giving is a priority to wealthy people; 36% of the rich, and 57% of the ultra-rich stated that charitable giving is one of their top priorities.
Experiences, Not Possessions
A recent study in Singapore showed that higher income families were spending less on shopping and buying fancy brands, and more on recreational experiences like frequently traveling, dining at restaurants, watching shows or movies, and reading books.
Yes, money can buy time. Rich people like to reserve their precious hours for experiences and networking that they actually pay to save it. Eliminating distractions and purchasing shortcuts or conveniences open more time to do enjoyable things. Investing in non-stop flights, fast passes at conferences or tourist destinations, and paying for convenient parking in a crowded city, all might sound like unnecessary costs, but they all come in exchange for time better spent.
The wealthy made their money by being smart, and investing in life insurance proves just that. Tax laws grant life insurance premiums and proceeds tax benefits and allow the rich a way to protect assets.
In addition, the proceeds of life insurance are tax-free to beneficiaries. Since wealthy people don’t want their deaths to pose financial pressure on their heirs, the death benefit is a big component of any life insurance strategy.
Life insurance, however, doesn’t have to be strictly for the rich. Anyone can do their homework and figure out ways to finance their own insurance policies. Mammoth Investor is a good online resource to start researching.
Rich people know that they won’t stay young forever, and are aware that their ability to do business and work hard will gradually diminish. It’s only logical that one should plan for the day they can no longer work.
There are myriad of ways the wealthy plan for their retirement; saving in a separate bank account, building an emergency savings fund, and investing in the stock market are some methods to accomplish that.
Wealthy people naturally happen to mingle within the same circles, and while they may not know exactly how much the others have in the bank, “the joy of ownership” is beautifully displayed in showing off their art collections. Owning and appreciating art is a great indicator of status among the rich, in addition to some practical motivations like guaranteeing a safe haven for capital, capital appreciation, and investment portfolio diversification.
Wine and art have been competing for attention among the rich over the past decade, according to the Luxury Investment Index. Being one of the best-performing collectibles, a wine has recently replaced classic cars in the top tiers.
According to recent statistics following the global financial crisis, wealthy Chinese is not only purchasing fine wines and beautifully crafted wine bottles, but they’re also showing great interest in vineyards, acquiring over 100 chateaux in Bordeaux, France.
Rich people – like all kinds of people – have habits that make sense to us, and others that don’t. We can, however, choose to learn from the ones that we think can benefit our life goals. While spending obscene amounts of money on expensive wines, paintings, and direct flights to Cannes may not fit our lifestyles; saving up for retirement, an insurance back-up plan, and giving back to society just might be worth looking into.