Let's face it: thanks to inflation, being "a millionaire" just isn't what it used to be. In an America where an ordinary single-family home can be worth over $500K in many markets, simply having "a net worth of a million dollars or more" is no longer synonymous with "Woo-hoo! My family and I are set for life."
That's been the case for at least a generation now.
Even so: if you are indeed a millionaire, you're still much better off than the average American these days. And if you're in the marketing biz, you want to know what millionaires buy so you can make money selling to them, so it's no surprise to read in MediaPost that the market-research firm Mintel has been studying the spending habits of millionaires - or "affluent shoppers," as they're called in the report.
Might be surprising
What might be surprising is where and how those affluent shoppers do their shopping: MediaPost summarized it under the headline "Millionaires love Costco, Home Depot and Lowe's."
There were actually two studies mentioned in MediaPost's piece. The Mintel study of "affluent shoppers" focused on people's incomes, rather than assets or net worth, which means many of the shoppers were not millionaires, nor anywhere close: an annual salary of $150,000 does indeed make you "high-income," yet depending on how much money you spend versus how much you save or invest, it's also easy for somebody to make that much money and still have a low overall net worth, or even be in debt.
The second study, from the investment site Millionaire Corner, focuses on actual millionaires - multi-millionaires, in fact, with a total net worth of $5 million or more excluding their primary residence. But both studies, about these two groups of people with some overlap between them, reached similar conclusions: affluent or downright rich shoppers tend to prefer stores like Costco and the two home-improvement warehouses to more "upscale" stores:
Only 2% of the survey (based on 1,200 investors with net worth ranging from less than $100,000 to more than $5 million) ever go to Lord & Taylor, for example. And only 8% of the highest net-worth shoppers go to Neiman Marcus.
Hmm. Interesting choice of stores - if I had a dollar for every time I heard or read some variation of the joke "Neiman-Marcus? More like Needless Markup, amirite?," I'd almost be rich enough for investment sites like Millionaire Corner to develop a professional interest in me. So just how exaggerated is that cliché, anyway?
$70 candles
The Neiman-Marcus website, as of July 15, is offering a sale on its exclusive store-brand scented candle-in-a-jar: usual price $70, but you can get one for only $56, shipping included.
By comparison, Amazon sells scented jar candles of the same size or even larger (and in a much wider variety of scents) for $9 and up, or you can haunt the brick-and-mortar discount stores and bargain outlets and find nice jar candles for as little as $4 (as I personally have done).
Decorative scented candles are perfectly fine things to have, if you like that sort of thing and take all applicable fire-safety precautions. Now suppose you have $56, the desire to own a scented wax candle in a glass jar and the desire to one-of-these-days be a millionaire, or at least be debt-free and have accumulated some savings and assets for youself.
What would you say is your best course of action: spending the whole $56 on the Neiman-Marcus candle, or buying a candle elsewhere for considerably less money, and using the difference to pay down your debt, bulk up your savings, add to your investment account or otherwise get closer to your financial goal?
And here's another question: if two people have identical incomes and outlays, except one person pays Neiman-Marcus prices for discretionary items whereas the other one shops in the "Target or cheaper" range, which one is more likely to sit in the millionaire corner someday? Which one will get there first?
Hint: it's probably no coincidence that "only 8% of the highest net-worth shoppers go to Neiman Marcus."
How they voted
Yes
Yes