Your income, HHI, and spending on “luxuries”

[Anonymous]

Anonymous wrote:

Anonymous wrote:Many people don't seem to splurge much and are high income but not as high net worth as I'd expect based on the answers. What do people spend their money on if they are not splurging in these categories (but aren't saving massive amounts to add to NW either)?

Mortgage
Health insurance
Kids activities
College savings
Utilities are up, groceries are up, gas is high where I live.

We do try to take a vacation once a year

Kids’ activities for sure. I think we’re getting close to spending $20K on after school and summer activities for 3 kids.

[Anonymous]

Anonymous wrote:Someone in my family makes 3 million a year: they don’t buy this stuff. They drive a Prius and a Subaru both 8 years old. Their house is not that great. The one luxury purchase I saw were authentic Persian rugs. I stepped on one that was 15k. They have several.

My sister and BIL make a lot of money and are empty nesters at 50. They don’t spend on cars, clothes or jewelry. They do spend on nice home improvements (gourmet kitchen, spa bath, and nice furniture). My sister treated herself to a Dyson hairdryer and they are taking their adult children on a high end 10 day trip in February.

[Anonymous]

Anonymous wrote:Someone in my family makes 3 million a year: they don’t buy this stuff. They drive a Prius and a Subaru both 8 years old. Their house is not that great. The one luxury purchase I saw were authentic Persian rugs. I stepped on one that was 15k. They have several.

As Ramit Sethi would put it, that's their rich life and not mine.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:HHI 440k. None of that crap.
Only luxury is Whole Foods

It's terrifying that health food is considered a luxury, hence why Americans are so huge.

It’s terrifying that you don’t know how to buy healthy food at Harris Teeter and Giant. There is little about WF that’s special except the prices unless you need a special ingredient for a recipe.

Actually, WF has better pricing on organics. HT's produce is trash.

[Anonymous]

Anonymous wrote:If the answer is none, I don’t under why people are bothering with this thread. Obviously a lot of people in DC make other choices, but the luxury shops are still open.

I think because housing is very expensive here and most people are self-made, so there's not a lot of income left to decorate, entertain, or take care of one's self. Most of the PPs are working on accumulating wealth for their kids, so they come from nothing. It's also a lot of travel expense, which means they didn't have the money growing up to travel with their families, so they make up for it now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If the answer is none, I don’t under why people are bothering with this thread. Obviously a lot of people in DC make other choices, but the luxury shops are still open.

I think because housing is very expensive here and most people are self-made, so there's not a lot of income left to decorate, entertain, or take care of one's self. Most of the PPs are working on accumulating wealth for their kids, so they come from nothing. It's also a lot of travel expense, which means they didn't have the money growing up to travel with their families, so they make up for it now.

It's also lots of people earning from several hundred thousand to maybe a couple of million, but working for somebody. Law firm, lobbying firm, etc.

It's not the investment bankers, P/E executives, VC executives, start-up folks that get massive bonuses/paydays. I think there is more a tendency to splurge if you make $250k base (not uncommon for IBankers), but then receive a $5MM bonus. I know a start-up founder worth $200MM on paper, but only gets paid $250k. If his paper value becomes real money (IPO or acquisition)...yeah, he is going to buy a bunch of expensive toys.

[Anonymous]

Anonymous wrote:All of us patting ourselves on the back for driving old cars don’t get it, it’s still luxurious because a) we could afford to maintain them and b) if and when they become unreliable, we’ll replace them

So? It frees up money to spend on other "luxuries" in life. I drove my Luxury big SUV for 12+ years, sold it for ~30% of what I paid for it. Yes, I got rid of it when it started having electrical issues that were going to start costing $$$. But I have an extra $25-40K in my pocket because I didn't get a new car after 4-5 years, not to mention my insurance was cheaper the last 4-5 years because it was an older car. Do that with each vehicle (10+ years instead of 4-5 years) and you have a lot of money to spend on other luxuries.

[Anonymous]

This will sound crazy but our income in 2022 was over $2 million and I spent just about nothing on clothes, jewelry or other luxury goods like fancy cars. I love my Forester! We do travel very well and we have two nice homes so our overhead is high. We give away a lot every year so we are not sitting on mattresses stuffed with cash.

[Anonymous]

Anonymous wrote:This will sound crazy but our income in 2022 was over $2 million and I spent just about nothing on clothes, jewelry or other luxury goods like fancy cars. I love my Forester! We do travel very well and we have two nice homes so our overhead is high. We give away a lot every year so we are not sitting on mattresses stuffed with cash.

Same. I drive a minivan and buy my clothes at target. We do spend a lot on travel, food and housecleaning/yard/child activities.

[Anonymous]

Anonymous wrote:

Anonymous wrote:All of us patting ourselves on the back for driving old cars don’t get it, it’s still luxurious because a) we could afford to maintain them and b) if and when they become unreliable, we’ll replace them

So? It frees up money to spend on other "luxuries" in life. I drove my Luxury big SUV for 12+ years, sold it for ~30% of what I paid for it. Yes, I got rid of it when it started having electrical issues that were going to start costing $$$. But I have an extra $25-40K in my pocket because I didn't get a new car after 4-5 years, not to mention my insurance was cheaper the last 4-5 years because it was an older car. Do that with each vehicle (10+ years instead of 4-5 years) and you have a lot of money to spend on other luxuries.

But why would anyone get a new car after 4-5 years if it's still running well?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This will sound crazy but our income in 2022 was over $2 million and I spent just about nothing on clothes, jewelry or other luxury goods like fancy cars. I love my Forester! We do travel very well and we have two nice homes so our overhead is high. We give away a lot every year so we are not sitting on mattresses stuffed with cash.

Same. I drive a minivan and buy my clothes at target. We do spend a lot on travel, food and housecleaning/yard/child activities.

+2

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:All of us patting ourselves on the back for driving old cars don’t get it, it’s still luxurious because a) we could afford to maintain them and b) if and when they become unreliable, we’ll replace them

So? It frees up money to spend on other "luxuries" in life. I drove my Luxury big SUV for 12+ years, sold it for ~30% of what I paid for it. Yes, I got rid of it when it started having electrical issues that were going to start costing $$$. But I have an extra $25-40K in my pocket because I didn't get a new car after 4-5 years, not to mention my insurance was cheaper the last 4-5 years because it was an older car. Do that with each vehicle (10+ years instead of 4-5 years) and you have a lot of money to spend on other luxuries.

But why would anyone get a new car after 4-5 years if it's still running well?

Features improve. They make cars that keep your drinks cold!

[Anonymous]

Our HHI is around 800K.

I think it's important to realize that certain luxury brands hold their value or go up in value, so I treat these as investments not as expenses.

For jewelry, Van Cleef and Cartier hold their value very well. For bags, the classic Chanel flap bag and the Hermes Birkin (if you can get your hands on a new one) have appreciated at the same rate as the S&P 500.

So it depends... would I "waste" $2500 on a Gucci or YSL bag that will lose more than half its value in a year? probably not, but I will save up for a small piece of Van Cleef jewelry for $5000. The former is an expense, the latter is an asset.

[Anonymous]

I think the DMV has an overabundance of HHI earners, but not that many people with f**k you money.

All the folks that barely spend who make $800k...I bet if they worked for a hedge fund and made $50MM in a year...they would probably buy a bunch of useless crap.

I would assume Carlyle VPs, MDs and Partners and wives probably spend $$$s on extravagances, but they also don't worry much about covering their daily expenses if they quit tomorrow

[Anonymous]

Anonymous wrote:I think the DMV has an overabundance of HHI earners, but not that many people with f**k you money.

All the folks that barely spend who make $800k...I bet if they worked for a hedge fund and made $50MM in a year...they would probably buy a bunch of useless crap.

I would assume Carlyle VPs, MDs and Partners and wives probably spend $$$s on extravagances, but they also don't worry much about covering their daily expenses if they quit tomorrow

50m/yr is a wild unachievable dream for me but my spending would be on the same stuff just amped up. Still mainly food, travel and kids but first class and fine dining all the time. My art collection would grow but I'm not going to suddenly become interested in jewelry and logo bags I didn't like before