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A new study has found that people with a net worth of $25 million spend far more on home renovations than they do on clothing, cars and jewelry
By Robert Frank, cnbc.com
The spending of the super-rich is no longer just about stuff and status. It?s more about memories and moments ... and lots of home renovations.
?A new study from Spectrem Group, a Lake Forest, Ill.-based research group, shows that people with a net worth of $25 million spend far more on vacations and home renovations than they do on clothing, cars, and jewelry.
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The survey showed that nearly half of the respondents spent more than $25,000 a year on vacations or leisure travel. More than a third spent more than $25,000 on home improvements. Vacations and home improvement were among the top categories for the spending of the ultrawealthy.
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Lower on the list was jewelry (58 percent spent less than $10,000 a year), autos (44 percent spent less than $10,000) and clothing (53 percent spent less than $10,000).
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?The data tells us that there are very few people in this group who are really flamboyant in how they spend their money,? said George Walper, president of Spectrem.
Of course, just because a couple spends $30,000 for luxury tents and chef-prepared meals in the Okavango Delta doesn?t mean they are not extravagant. It?s just that they?re ?experience extravagant,? rather than ?material extravagant.?
Still, the spending of the wealthy has taken on a slightly different character since the bling-filled years of 2005?2007. Aside from spending more on vacations and home improvements, they're also spending more on entertainment and the arts. Today, a third of the ultrarich are spending $25,000 or more a year on the arts. (Are they?re buying symphonies?)
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In 2007, 25 percent of the superwealthy spent more than $25,000 a year on jewelry. In 2010, that number fell to 21 percent. In 2007, one in four spent more than $25,000 a year on clothing; that share has fallen to 19 percent.
They are still a charitable group, at least, according to their survey responses. Nearly half gave $25,000 or more to charity ? more than the combined totals for jewelry and clothing.
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A subset of the rich are also big political givers. One in five gives more than $10,000 in political contributions each year.
?With political giving, we see that a small percentage of them are giving the most,? Walper said.?
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