The Importance of the Affluent Market

The wealthiest 10% of U.S. households, as defined by a minimum $942,000 net worth in the Federal Reserve Board research, have the following profile:

•  With an average annual income of $361,000, they earn about 40% of the total income earned by all American households.
•  They account for almost half of all consumer spending and thus represent about a third of total GDP (gross domestic product).
•  With an average net worth of $4 million, they control over 70% of the total net worth of all U.S. households.
•  As a group, these 12.2 million households hold about 90% of the value of all publicly traded stock and stock mutual funds in the U.S.

The affluent market is composed primarily of people who are careful spenders and aggressive savers. They are not conspicuous or ostentatious consumers. This is clearly and consistently demonstrated in the 30 years of research starting in the 1970s by Thomas Stanley, author of “The Millionaire Next Door”, and in AARC’s research.

Contrary to the opinion of some marketers and researchers, an income of $100,000 does not equal affluence, especially for a family in a major metropolitan area. And research by the Federal Reserve Board and the Internal Revenue Service shows income is not a stable indicator of wealth, as there is considerable turnover and volatility among people in the highest levels of income.

“Only a small number of the affluent can be considered conspicuous
consumers. Most of the affluent are conservative spenders and aggressive savers.”