Well as the title says above, this is about what millionaires buy for fun and luxuries. I will talk about some things that they bought and invested in as well as things they say and do. There is also some information on things that millionaires do not spend money on that may or may not surprise you. And finally, how do they make their money and give me a sneak peek into their lifestyles.
These purchases might overwhelming and outrage some people as it seems like an obscene amount of money but they do this cautiously. But keep reading and learn more about what do millionaires buy for fun and enjoy your day.
Travel
We’ll begin with this from millionaire 50:
We love to give each other experiences, not presents.
Our big splurge last year was to fly to Colorado, land at the highest airport in the country, Leadville, spend a week with friends hiking and biking in Breckenridge.
We then took a flying, day trip to Torrington, WY to experience the total solar eclipse. Two bucket list items in one trip.
Sounds like fun, right? Colorado is awesome and I like Breckenridge in particular.
Here’s another from millionaire 70:
Vacation is my big splurge.
I take a vacation every 3 months and I like to stay at really nice hotels across the Mexico, Caribbean and Hawaii islands.
I refuse to short myself on vacation time or accommodations.
I can really identify with the quality comment. I would rather go on one nice vacation than two where I had to stay in a hostel.
I don’t need to stay at the Ritz (and wouldn’t prefer it anyway), but do like the place we stay to be nice.
Next is this comment from millionaire 77:
I love traveling. I spend about $45k a year just on trips.
I love going to a new country, learning about a new culture, meeting interesting people on my trips and, of course, the beautiful beaches!
I love a good beach myself!
Perhaps I’ll get up to $45k spending on travel myself one day, but I suspect that $20k is more my limit.
Here’s a different take from millionaire 78:
We love cruises — in fact, the header image on my website is a photo I took of the ocean from a cruise we were on. I did mention that we’re naturally frugal though and it comes into play with our cruises as well.
We don’t just pick one and go. We dig around to find a really good deal, but we always get a balcony (once you go balcony, you can’t go back!).
We’ll find a cheap flight and stay at a cheap hotel the night before. We don’t buy any upgrades on the ship and very little in the ports. But we do love the experiences and will go to restaurants in the ports and eat and drink to our heart’s content.
It’s a balance that works for us and we never feel like we’re missing out. However, it’s something that might not work for everyone and that’s OK … to each his own!
This blends both travel and the desire to get a “good deal” which I can support 100%!
We’ve been on three cruises and like them a lot as well. I’m thinking a fourth might be in our near future.
And here’s a final thought from millionaire 95:
Vacations. In the last 15 years I have probably spent $20K-$50K a year on family vacations. My kids have been to over 35 countries and 5 continents.
Great times, experiences and memories.
The memories are priceless. Our trips are always among the most discussed memories in our family.
Food/eating out
This one was a bit of a surprise to me, but apparently millionaires like their fine food.
The combination of “food” and “eating out/restaurants” was mentioned by 35% of the millionaires and made up 21% of the mentions.
There were a couple different expressions of this answer.
Sometimes millionaires meant eating out and sometimes they referred to eating at home. I’ll give examples of both.
Here is a comment from millionaire 59 about eating out:
We both like to dine out and eat good food. This is our single biggest expense when it comes to ‘wants’ vs. ‘needs.’ Hedonism has a price.
And another from millionaire 68:
As I mentioned, food has never been scrutinized in our budget. It’s something I love way too much to compromise on.
We eat out more than we should and over grocery shop, but I’m okay with it.
And a final one from millionaire 81:
We also enjoy gourmet dining experiences; I don’t blink at spending $250/person for a meal every couple of months, but consider paying $60 for 4 of us to get hamburgers a total waste.
That must be some really good food for $250 a person!
Now let’s move to those who like to spend on food eaten at home:
Here’s millionaire 53’s comment:
Food is our favorite thing to spend on by far.
My wife is an excellent cook and we all have a lot of fun trying new recipes.
We also like our cookbooks (America’s Test Kitchen) and Pressure cookers.
They love registries, where they can have their names next to the most luxurious items without always physically possessing the product.
The thing about most rich people is, they have to do almost everything ‘rich people style’. Part of being super rich comes with the satisfaction that you get to have your name on rare, expensive, luxury items. This is where registries come in. Like when the super-rich people want to pre-order a rare car, they usually go to duPont Registry. Say, a super-rich person wants to buy a rare diamond from another super-rich seller, they approach a similar registry, which then arranges the transactions. But it’s not like the new owner is going to display the diamond on his coffee table. It’ll still be in a secure vault, most likely, the same one where it existed earlier. But the registry reflects the new owner’s name. Win, I guess.
AAirpass – Pay $250,000 and fly unlimited first class on this airline for all your life
Back in 1981, if you had $250,000 and an extra $150,000 for a partner, you could fly first class in any American Airlines flight throughout your life. By 2004, this price had gone up to $3 million and then later, American Airlines discontinued the “unlimited” part of the deal for new members. Over the years, 66 people had subscribed to it.
The super rich have their own version of e-Bay and Craigslist
When you’ve reached Uncle Scrooge levels of richness, you don’t wait around for Flipkart discount deals or great bargains on eBay. One of the luxury e-commerce sites like to visit is JamesEdition.com, where you can buy rich people things like jets, yachts and even real estate. They even listed the freaking Batmobile on their site.
High-end Watch Clubs – Yes, even rich people rent
Some rich people are rich because they make clever decisions. For example, they don’t always buy assets with depreciating value, but they lease/rent them. When it comes to fancy watches, they prefer renting them for special occasions from sites like BorrowedTimeWatches.com. And it makes total sense if you think about it – you get to impress the world with your bling, without paying shit loads of money.
They don’t overspend
If you have more disposable income, it’s easier not to overspend. Yet, it’s worth noting that even millionaires, including some of Daugs’ clients, still have frugal spending habits.
While these clients do enjoy some of life’s finer things, Daugs says they typically do not overspend.
For example, they’ll purchase a certified pre-owned car versus buying a brand new one; they will search for good deals on vacations; they may upgrade to economy plus on an airline but won’t pay for first class; they will keep their cell phones as long as they are working and don’t feel the need to upgrade every time new technology comes out.
They utilize rewards credit cards
Daugs’ clients use credit cards that offer rewards for their spending. Many of them will put most of their day-to-day living expenses on a credit card that offers points or miles in return. Then they use these rewards to offset the cost of vacations or leisure activities.
And they always make sure to pay their credit card balance off in full every month to avoid incurring any interest charges or fees.
Another added benefit of using a credit card for most of their everyday expenses is that Daugs’ clients have a strong understanding of what it costs them each month to live their lifestyle. “This then proves to be extremely helpful information when helping them plan for their retirement goal and retirement expenses,” he adds.How you can utilize rewards credit cards, too
The best rewards credit card for your wallet should help you earn rewards on the purchases you make the most.
For example, if you spend a lot on groceries, consider signing up for the Blue Cash Preferred® Card from American Express to earn 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
Anyone planning to travel as Covid restrictions ease in the coming months should take advantage of the Chase Sapphire Reserve®, which offers luxury travel perks, a $300 annual travel credit, earn 5X points on air travel 10X total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards (after using $300 annual travel credit), 3X points on travel worldwide and on dining at restaurants including eligible delivery services, takeout and dining out, plus a generous welcome bonus of 50,000 bonus points after you spend $4,000 on purchases in the first three months from account opening.
They pay themselves first
The habit of paying yourself first — also known as reverse budgeting — means you build a budget based on your savings goals rather than based on your spending and expenses. In doing so, you ensure that every month, money gets allocated to future you.
Daugs’ clients pay themselves first by systematically saving money via direct deposit from their paychecks, or as a recurring transfer from their checking accounts.
“Whether it be into their employer retirement plans, IRAs or general investment accounts, this is money they put away and invest with no intention of using it for day-to-day living,” Daugs says.
By saving first, Daugs’ clients are able to freely spend whatever is leftover, with the comfort of knowing their savings plans — both long- and short-term — are already taken care of.
“They live within these ‘net cash flow’ means and make every effort to keep all savings plans active and increase them on an annual basis,” Daugs says. “They do not dip into these investments for anything other than their intended goal.”
They keep an emergency fund at all times
An emergency fund is essentially a stockpile of cash that you can use in the short term for unexpected expenses.
Financial experts generally suggest setting aside three to six months’ worth of your living expenses in an emergency fund (Daugs’ clients typically maintain six to nine months). But just how much you choose to save is dependent on your individual income and comfort level.
Arguably as important as how much you save is where you save. Your emergency fund cash should be kept in a savings account that’s accessible and not at risk to the ups and downs of the stock market, but at the same time it should always be earning the highest return possible.
“In today’s low interest rate environment, it can be challenging to find reasonable return for these emergency funds in traditional savings accounts,” Daugs says. For this reason, Daugs recommends his clients follow a more productive “tiered” strategy when deciding where to put their savings:
- Tier one: In a simple money market or high-yield savings account.
- Tier two: In an ETF portfolio that invests in short-term maturity securities. “While these can fluctuate in value, they typically generate higher yield than savings accounts and the short-term maturity keeps potential fluctuation in [value per share] at a minimum,” Daugs adds.
- Tier three: In Buffered ETF investments. Since it is unlikely that Daugs’ millionaire clients will actually need their reserve dollars quickly, they utilize these Buffered investments that allow for potentially higher returns tied to a market index, such as the S&P 500 or the Nasdaq, yet offer some degree of downside risk protection, aka a “buffer.”
How you can be strategic about saving for your emergency fund
In Daugs’ tiered strategy, each tier takes on a bit more risk as you progress from tier one to tier three. This strategy is only recommended for those who have more risk tolerance; otherwise, stick to a high-yield savings account that is FDIC-insured and offers an above-average interest rate.
Select’s top pick is the Marcus by Goldman Sachs High Yield Online Savings. Marcus offers no fees whatsoever and easy mobile access. It is the most straightforward savings account to use when all you want to do is grow your money with zero conditions attached.
They are strategic about carrying debt
Most of Daugs’ clients try not to carry debt on things like cars or boats to avoid paying years of interest on something that quickly depreciates in value.How you can utilize rewards credit cards, too
However, they may carry a mortgage on their primary home. “This is especially true in this current low interest rate environment,” Daugs says.
He adds that still even now, most of these clients accelerate their mortgage payments to pay it off years ahead of schedule and thus reduce the overall interest they have to pay.
Conclusion
millionaires are humans too. they like to have fun, hang out with friends, and travel like everyone else. you might not think that normal guy next door is a millionaire, but do you actually know what millionaires buy for fun or how they invest in things? rich people are different than their everyday peers. they experience certain things in life that make them react in particular ways instead of like others would.