Thursday, March 4
Posted 11 a.m. EDT
I can believe that in this shaky economy the wealthy have been reining in spending, though truthfully, in the well-heeled Florida town where I live, I don't see much evidence of fiscal restraint among the rich retirees who flock here. But a Charles Schwab study conducted in January goes so far as to claim that "frugal is the new normal for affluent Americans." I have a hard time buying that.
The survey of 1,144 independent registered investment advisers whose assets are custodied at Schwab reveals that clients have a renewed emphasis on paying down debt, saving and frugal spending habits.
Conducted by Koski Research, the study notes that the top changes adopted by American consumers with the greatest staying power are frugal spending habits (32 percent of respondents) and a focus on saving money (26 percent).
Clients also reported that, given the current market environment, 62 percent will put more effort into paying off debt, and 59 percent will increase their savings during the next six months.
It all sounds so reasonable. But sales of art, yachts and all manner of toys for the rich seem to be enjoying a rebound following a two-year slump. And after a decade of frenzied one-upmanship buying (up until 2007), where yachts were built so large they couldn't dock in many recreational ports, executive airports became clogged with private jets, and the word "McMansions" entered our lexicon, I doubt the wealthy will be able to hold back much longer.
Should you pay debt before saving?
Watch a video on learning how to be rich.
Should you go it alone or hire a professional to plan your estate?
Questions? Comments? E-mail email@example.com
Read more Your Wealth blogs.