What do Millionaires Drive?
The Millionaire Next Door By Thomas J. Stanley, Ph. D. and William D. Danko, Ph. D devotes an entire chapter to the cars that millionaires drive. You might find a surprising lack of luxury cars in the cars most frequently driven by millionaires. It's kind of crazy to think that millionaires spend so little on cars while they have so much.
In fact, I think its safe to say that a lot of millionaires have spent less on cars than most of your parents. "Fifty percent of millionaires never spend more than $29,000 in their entire lives on motor vehicles" (Disk 4, Part 1). About one in five never spend $19,000 (Disk 4, Part 1).
The following are listed in rank order according to their respective market shares:
•1. Ford (9.4 percent)
•2. Cadillac (8.8 percent)
•3. Lincoln (7.8 percent)
•4. A three way tie: Jeep, Lexus Mercedes (6.4 percent)
•5. Oldsmobile (5.9 percent)
•6. Chevrolet (5.6 percent)
•7. Toyota (5.1 percent)
•8. Buick (4.3 percent)
•9. Nissan and Volvo (2.9 percent each)
•10. Chrysler and Jaguar (2.7 percent each)
(Chart above from: Disk 4, Part 4)
Most millionaires know that the car does not make the man(/woman). Millionaires can differentiate them selves from their motor vehicles and don't feel the need to drive luxury cars. 76.5% of millionaires do not own the most recent model of car (Disk 4, Part 3).
Personally I try to save money by not owning the newest model of phone. Pictured above is my Samsung Galaxy SIII, the only phone I have ever owned. I purchased it used off craigslist a few years ago, and intend to use it until it dies in my arms. At this point it is pretty close because I think there is a hardware issue getting power to the phone (it doesn't turn on). I took it apart and am attempting to fix it as we speak.
Can you think of places in your live where you choose not to buy the "luxury model" in order to save a few bucks?
Citations:
Stanley, Thomas J., and William D. Danko. The Millionaire Next Door: The Surprising Secrets of America's Wealthy. Atlanta, Ga.: Longstreet Press, 1996.
You could get clothes from Ross or Marshall for a cheaper price than Macy's.
ReplyDeleteMost millionaires probably don't own luxury cars because they know it is a waste of time and they should probably make smarter investments.
ReplyDeleteYeah Quoc, one can spend a lot of money on clothes and buying less expensive clothes is a good way to cut costs.
ReplyDeleteYou're right Jake, millionaires become millionaires by making smart investment choices and spending a lot of money on a luxury car is not a smart investment choice
ReplyDeleteAlways - we always buy used/off-brand. It's partially a financial decision, but it also is about making choices that are good for the earth - we try not to support the over-consumption of resources, and also not to buy-in to the materialistic aspects of our society.
ReplyDeleteAwesome! We do the same thing, when it comes to most products we buy the cheaper of the lot. My family also buys a lot of used items. Craigslist is one of our favorite websites
DeleteI believe in spending money where you will use it, so If you going to buy something that you plan on using a lot you should get a higher grade, or quality item, then if you are buying something to use on occasion it is okay to buy the off-brand, or a discounted item.
ReplyDeleteYeah Shane, I do that a lot in my life. If it is something that I think I will get a lot of use out of then I am more like to put more money into it.
DeleteI agree with Shane its like a hobby thing, that if you like you spend more money on it. I think it depends on the type of millionaire because if they are never in the car or they don't enjoy driving why waste money on a car when they can put it towards something else.
ReplyDeleteYeah Noah, its kind of up to each person how they choose to spend their money. This books gives lots of good tips and guidelines, but really it comes down to the individual
ReplyDeleteFrom personal experience of knowing several people that have a net worth of over 1 million I can kind of de-bunk this as all the people I know own cars that are definitely over $30,000. However that might be the fact that they are car people so they own some pretty great cars! I do not try and get the cheaper version as the "luxury" version is usually the more well built and I am okay to spend the few extra dollars on the items.
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