Looking at research on luxury and lifestyle spending by Ultra High Net Worth families and layering it against recently released research on how much the Top 0.1 percent make, I estimate these 117,000 households contributed $214 billion to the economy last year.
Analysis by Sadoff Investment Research of University of California, Berkley’s Emmanuel Saez study of U.S. income tax returns reveals the Top 0.1 percent have an Average Household Income of $6,373,782.
So where does it go?
According to a study by The Washington Post of households with a $250,000 income, after taxes, mortgages, child care, electricity, water, phone service and other necessities they probably have about $15,000 a year to spend on leisure and luxuries, including clothing.
The Top 0.1% of American earners represents some 117,000 households (117 million x 1/10th of 1 percent). We also know from Saez that since 2009, the Top 1 percent of gained 95 percent of all income gains, and luxury autos, fashion, watches and hotel revenue has continued to grow. In fact, 2013 marked the second highest year in history for the sale of new private jets at $23.4 billion.
With that in mind I thought it would be interesting to look at lifestyle spending research published in The Sky’s The Limit based on 661 private jet owners with a Median Net Worth of $41 million.
Not all of the Super Rich spend in all categories measured, but weighting the numbers and making the assumption since the lot of the very rich has only improved they are spending at least the same as they did in 2007, I worked out how much the Top 0.1 of American households percent contribute for various industries (chart below).
Based on my analysis, the Top 0.1 percent spent nearly $50 billion on making their homes nice, some $25 billion on fine jewelry, $19 billion having events and parties and $5.5 billion on watches among other things. Moreover, they contributed over $12 billion to those who make their living getting us dressed. All together, my estimates show the 117,000 top earning households in the U.S. put about $214 billion into the economy.
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Howdy! This post could not be written any better! Reading this post reminds me
of my previous room mate! He always kept chatting about this.
I will forward this page to him. Pretty sure he will have a good read.
Thanks for sharing!
Woha ! cool I always had feeling does this really happen.