What makes a customer affluent? How much money does someone have to make or have to be considered affluent? How is wealth defined? For the sake of convenience, this book defines three categories of wealthy customers.
The moneyed customer.
The rich customer.
The ultra-rich customer.
Later on, each of these categories will be divided into sub-categories, such as women, men, same-sex, baby-boomers, and the self-made. But generally speaking, the three basic categories are defined as follows.
Moneyed customers. The people in this category make $200,000 to $1 million dollars per year. They are usually young professionals, what used to be called “white-collar workers.” More often than not they are highly educated, having graduated from colleges or universities. However, this is not always the case. There are many exceptions. Some have graduate degrees, and many attended professional schools, where they received specialized training in a specific discipline. This group includes doctors, lawyers, computer sciences and dentists. Others graduated from professional business schools. Some are entrepreneurs, who hope to grow their small-businesses into large corporations. In reality, this category is difficult to define, other than the fact that they are motivated to succeed.
This category is experiencing rapid growth, and is in the upper 3 percent based on income. In other words, they make more than 97% of the population in the United States. Unique to this category are the baby-boomers, who are not young. Indeed, they are close to retirement. Some are from blue-collar backgrounds. Nevertheless, they have tremendous wealth.
The rich customer. Yearly income in this category is $1million to $5 million. According to the IRS, in 2005 there were 146,000 people in this group. By 2008, the number had increased to 215,000. This group is growing steadily. The people in this category own and trade stocks. Many of them own more than one property, and are looking to purchase investment properties. They purchase luxury automobiles, take frequent vacations, and shop online. Most individuals in this income group are still relatively young, 35 to 50 years of age, and display an eagerness to ascend to the next income level.
The ultra-rich customer. People in this group have incomes of more than $5 million dollars per year. They reside in the upper 1 percent, which means they control 90% of the wealth in the United States. Many own yachts and private jets. They travel frequently, taking lavish vacations. Most own multiple properties, on which they spend an average of $500,000 in maintenance and household goods. Your Family Finances reports that these individuals spend $30,000 per year on wine and other alcohol, $250,000 per year on jewelry, $125,000 per year on apparel and personal accessories, and more than $170,000 per year on vacations.
This is a diverse group, including corporate CEOs, movie stars, musicians, venture capitalists, financiers, and successful entrepreneurs.