November, 2014 – This article from the New York Post discusses how the one percenters keep accumulating wealth because most millionaires do not spend extravagantly. (http://nypost.com/2014/11/02/according-to-the-fed-the-rich-are-getting-richer/)
By Gregory Bresiger
Yes, the rich are getting richer, but many of them also go to Walmart, clip coupons and don’t drive a Lexus.
Having short arms and deep pockets is the main driver that allows the one percenters to keep accumulating wealth, according to the Atlanta-based American Affluence Research Center.
A surprising aspect — which flies in the face of Madison Avenue — is that America’s 11.53 millionaire households often shun the prestige brands, officials of the research center reported by analyzing the latest Federal Reserve numbers.
“While marketers, especially those promoting luxury brands, are eager to entice the wealthy to purchase their goods and services in order to live the good life, the fact is most millionaires do not spend extravagantly,” says Ron Kurtz, president of the American Affluence Research Center.
And having no interest in status-symbol spending means the rich — the top 3 percent of American households with a million dollars or more in net worth — are doing better than ever.
The share of total income of the top 3 percent of Americans grew to 30.5 percent in 2013 (from 27.7 percent in 2010), according to new Federal Reserve numbers.
Further, the top 3 percent saw their share of total wealth rise from 44.8 percent in 1989 to 54.4 percent in 2013, the central bank said.
One reason the rich get richer is many of them don’t overspend. Indeed, the American Affluence Research Center reports many of them think luxury brands are overpriced.
“Nearly 44 percent of those surveyed felt Louis Vuitton in particular is overrated and is aimed at status-seekers rather than the consumer who is quality conscious,” according to the center.
Other luxury brands, he added, fared poorly with the well-heeled.
“More than one-third of those surveyed said that Hermès, Gucci, Prada and Rolex were other overrated luxury brands as well,” Kurtz said.
So, in a few respects at least, it turns out the rich are no different from the rest of us — they look for bargains and hate to overpay.