Yahoo Finance 4 Major Expenses Rich People Splurge on During the Holidays
What do wealthy individuals spend their money on during the holiday season? Nearly a decade ago in 2014, CNBC conducted a Millionaire Survey to uncover the answer to this question. Five categories were identified as the top for holiday spending among millionaire respondents surveyed at the time. They included charitable donations, gift cards or cash, travel, clothing and family parties.
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As 2023 comes to a close, are millionaires still prioritizing family and experiences over more stereotypical lavish holiday purchases like luxury cars? The answer, as it turns out, is yes.
GOBankingRates spoke to four financial professionals who work closely with millionaire clientele. Here’s what the rich splurge on during the holiday season.
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International Travel
Kevin Ross, ChFC and financial advisor at Cape Securities, has noticed a pattern among his wealthy clients. Many clients tend to do things repetitively.
If a client who has traveled to many destinations, domestic and international alike, finds a place they love the most, Ross said they tend to go back to this favorite spot whenever time permits.
With time being an issue, Ross said wealthy clients splurge on international travel. Typically, this means chartering a private plane or flying business class on a commercial airline to either warm parts of the world or the ski slopes.
Why would the rich choose to book a business class seat on an airline?
“While some appreciate the convenience and privacy of private aviation, many self-made millionaires remember what it was like before they were wealthy and can’t justify spending the money on private aviation, even though they could easily afford it,” said Ross.
While traveling, Ross said wealthy clients enjoy giving back to others who come into their orbit and are kind and helpful. He uses the example of having a wealthy client who dined at a nice restaurant with his wife and kids. Their waitress was a very friendly student who took care of the entire family. The wealthy client tipped her $1,000 and added a “thank you” note on the check.
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Giving To Charity
Carla Adams, CFP, founder and financial advisor at Ametrine Wealth, does have some wealthy clients who splurge on fancy vacations during the holiday season. However, most of her clients put their year-end splurging towards charitable donations.
At year-end, Adams said her clients will make donations and give to the causes that are important to them and their family. Typically, this includes something personal to them. A wealthy client might make a significant donation to their place of worship or to a disease or cancer-focused foundation that affected them or a family member.
Another area of giving interest among the wealthy are charities that focus on the change they want to see in the world. Adams said wealthy individuals may give to organizations like food banks or women’s shelters.
Gifting Family Members
Timothy Kirch, CFP at Nashville Financial Planning, works alongside several wealthy clients at this advisory company. Every year, one of the largest families he works with gifts company stock — to every single family member.
“It’s definitely common for wealthy individuals to max out the annual gifting limit with a $17,000 check to their kids and/or grandkids,” said Kirch.
Adams also sees a similar gifting pattern among her clients to family members.
“My clients contribute to college funds for their kids or grandchildren, and/or perhaps gift to their adult children during their lifetime so they can see the impact of their hard-earned wealth, such as enabling their kids to be able to purchase a home and/or provide opportunities and experiences for their own kids that might otherwise be out of reach,” she said.
Gifts For Staff and Advisors
The final major expense the wealthy make during the holidays is to everyone instrumental in helping keep up their day-to-day lifestyle.
John Jennings, president and chief strategist of St. Louis Trust & Family Office, said wealthy individuals give during the holidays to thank their staff and advisors. “They give cash, gift cards and gift baskets to their housekeepers, landscapers, hair stylists, personal assistants, nannies, staff at private clubs, accountants and wealth advisors.”
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This article originally appeared on GOBankingRates.com: 4 Major Expenses Rich People Splurge on During the Holidays
