On what do wealthy people spend a lot of money

On what do wealthy people spend a lot of money?

A few years ago there was a really good book written called The Millionaire Next Door. Although it was written about the USA, I think a lot of the messages that it tried to convey were pretty universal. The book popped a lot of the stereotypical myths about millionaires (the first one being that they are rare: the US contains over 8 million households that are ‘millionaire’ households in terms of net wealth). But to me the more interesting bits were what millionaires do (and do not) spend lots of money on. The two things that millionaires consistently spend a lot of money on were: (1) their homes; and (2) their children’s educations. Homes is an obvious one - properties are a stable investment that generally increase in value. It makes sense to stretch yourself financially to increase your footprint on the property ladder. Children’s education is a value statement though. There is normally a zero return on that, but wealthy households spend extravagantly investing in their children’s futures. Almost as interesting is what wealthy people do not spend their money on. They generally did not buy fancy cars (conversely, millionaires were far more likely that other people to buy a second hand car than a new car); fancy watches; expensive clothes; expensive holidays (they tended to take fewer holidays, and were more likely to take budget holidays); and relatively few of them purchased boats. Almost none of them purchased time shares. All of which sounds like good household budgeting (from a financial point of view). The other things that set them apart: they saved heavily, often heavily emphasising long term tax efficient retirement plans. They mostly consisted of households with a sole bread winner, but where there was a second breadwinner a surprisingly high proportion of those were where the wife was a schoolteacher. I am not sure why that would be. Anyhow, all interesting stuff, and I can thoroughly recommend the book if you are interested in a deeper dive.

On what do wealthy people spend a lot of money