Several years ago, you might signal to your friends and neighbors that you were rich by wearing a Rolex Submariner or taking your Lamborghini Aventador out for a spin.
Now, that's just so 2022.
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In fact, the wealthiest people in the U.S. are so wealthy that approximately 30% of all national wealth now belongs to just 1% of the population. The pandemic was, in some ways, a boon for rich people. It created a new billionaire every 30 hours. Real estate values skyrocketed across the country and the S&P 500 is up some 61% over the past five years.
Of course, the boom hasn't affected everybody equally. The average 30-year fixed mortgage is a whopping 7.9%, pricing many everyday consumers and would-be homebuyers out of a critical first step to personal wealth.
Some economists had been forecasting a "rich-cession," or a downturn that would have mostly affected those where wealth was densely concentrated. For example, plenty of layoffs have affected high-paying, white collar jobs. But investments and home values suggest the rich-cession just isn't here.
Instead, the rich are just getting richer. Some things never change. But their spending habits certainly are.
Wealthy Spending Habits Are Changing
According to Moody's chief economist Mark Zandi, wealthy people are changing how they're spending their money. They aren't spending less -- far from it. They're just splurging on different things.
In fact, those things are mostly not things at all. They're experiences. Rather than springing for new cars (which have never been more expensive), diamonds, or designer goods, they're buying access to services and memories.
"It's just a shift in preferences. They're out doing things, so that's where the money is. They're going to see Taylor Swift for $2,000 a pop. They're not buying Rolex watches," Zandi said, claiming the rich have "spent up" goods and items, now swapping those purchases for the intangibles.
Luxury vacation bookings are up 34% over the past six months, and include experiences like Arctic expeditions, private tours of priceless artifacts or destinations, and extremely private enclaves most of us have never even heard of.
This makes sense, since most of the world has since reopened and the pent up demand for travel affects all of us.
“Americans are the new Russians,” luxury travel agency Embark Beyond founder Jack Ezon told The New York Post in June. “They are filling the Med hot spots at ridiculously inflated rates, and they cannot seem to get enough of it.”
