Most people would find my job boring. Every day, I read dozens of polls and studies about America’s personal finances. Whether the topic is money and gay marriage or money and religion, I look for trends that might teach me something — and maybe you, too.
Yet the most intriguing piece of financial research I read over summer was from an automobile website.
Last month, Edmunds.com compared new car registrations to households that report more than $250,000 in annual earnings. Conclusion? “When it comes to which cars the wealthiest Americans actually choose for their daily drivers, most opt for practicality over pomp.”
Sure, wealthy drivers will buy luxury cars — but not as many as you might think. The Top 10 high-end vehicles look like this…
- Jaguar XKR
- Audi S8
- Ferrari 458
- Aston Martin Vanquish
- Jaguar XFR
- Aston Martin Rapide
- Bentley Mulsanne
- Tesla Model X
- Bentley Continental
- Ferrari 488 GTB
…but “purchases of these top 10 vehicles represented only 0.7 percent of the total number of vehicles registered by this group, demonstrating that flash is still by far the exception and not the rule.”
That’s right, all of those pricey rides don’t even add up to 1 percent of the cars the wealthy buy.
What’s the most popular vehicle for those earning more than $250,000 a year? The same vehicle for those earning less than that: the Ford F-Series of pickup trucks. In fact, both Top 10 lists contain the Honda Accord and CR-V.
At this point, you may wonder why I’m so impressed with these results. Simple: It proves the way to wealth isn’t by spending it capriciously. Cars are the ultimate status symbols in our society, but not the only ones. Big homes, designer clothes, and the latest electronics also entice us to spend more money even if the value isn’t there.
As a financial counselor for more than two decades and the author of two books on wise spending and saving, I often run into resistance from otherwise intelligent adults who tell me, “But I need to buy these pricey items because I need to look successful in my job.”
We’re bombarded with TV shows and web videos showing off the extravagant purchases of the “super-rich.” That’s not the reality of the “merely wealthy.” It’s well known that billionaire Warren Buffett lives in the same house he bought in 1958 for $31,500.
With this summer study from Edmunds.com, I now have slightly more proof that you don’t need to go into debt so you can prove how much money you’re going to make later.