Middle Class Millionaire How the Influence of Affluence Is Transforming America

CHAPTER ONE THE INFLUENCE OF AFFLUENCE In 2004, the sales department atElite Travelermagazine asked Russ Alan Prince to conduct a marketing survey of its readership.Elite Traveleris likely the most exclusive consumer magazine in the world. The magazine is distributed primarily on private jets, and it covers subjects such as how to book your own private island. Its reader demographics, with an average household income in the seven figures, eclipse those of its nearest competitor by more than sixfold. Russ's job, in part, was to measure how much influence the buying habits of these very affluent readers exert on others around them. In the field of luxury marketing, purchasing decisions of high-networth individuals are assumed to exert a "downline influence" on people of the same or lesser means.Elite Travelerwanted to know if Russ could document a similar relationship between the purchasing decisions of the people who readElite Travelerand other people who associate with them. Russ has been studying the spending and investing habits of high-net-worth individuals for more than twenty years. He knew that carrying out a methodologically sound survey of very wealthy individuals would be a difficult and time-consuming task. To find 203 respondents willing to answer a long series of personal questions posed by a researcher in personal interviews, Prince had to network his way through lists of financial advisors and private jet services who served as go-betweens. Most of the survey subjects either accepted a $500 payment for their cooperation or directed that sum to one of their pet charities. The survey results providedElite Travelerwith an unwelcome surprise. According to the survey, the buying decisions of very-high-networth individualsthose with wealth in excess of $10 millionexert very little influence on the people around them. Except for certain celebrities, wealthy people who are influential by almost every other measure don't serve as role models when they purchase goods and services. They are not "referentially influential." If they buy something for their home or office, they tend not to talk about it very much. In the case of more easily observable purchases, such as clothes, watches, and jewelry, they seldom interact with enough people on a day-to-day basis to exert any significant influence. And when it comes to providers of personal serviceslife coaches, personal trainers, financial advisorsthe very rich can be very secretive. Express too much praise for your coach or trainer, after all, and he or she might get poached by someone else. Russ had managed to measure in a meaningful way, perhaps for the first time, the profound insularity of the very wealthy. They don't have a very big impact on the rest of us. This conclusion was not terribly helpful toElite Traveler, but Russ found himself intrigued by one small set of details buried in the data. The sample was too small for him to draw any concrete conclusions, but it seemed to him that a handful of the least affluent in this particular sample group reported behavior patterns that set them apart from the rest. They enjoyed making their opinions known, and they actively solicited opinions from others. They talked with a lot of people each day. Here was a subset of the multimillionaire cohort who didn't act like multimillionaires. In a subsequent readership survey done forThe New YorkerandRegistered Repmagazines, Russ's researchers interviewed 1,417 people who declared a net worth between $1 million and $10 million, including the equity they hold in their primary residence. It was here that he discovered, as a sociological phenomenon, the Middle-Class Millionaire. Most are baby boomers, but some were born after the boom'sPrince, Russ Alan is the author of 'Middle Class Millionaire How the Influence of Affluence Is Transforming America', published 2008 under ISBN 9780385519274 and ISBN 0385519273.