Maybe the rich are just like everybody else after all—they have money woes too. And, according to the Spring 2009 Affluent Market Tracking Study #15, released Wednesday by the American Affluence Research Center, the well-off are holding on to their cash and not spending it.
"The outlook among affluent Americans for an improvement in the economy, as well as their willingness to spend, has reached all-time lows for our studies," according to Ron Kurtz of the American Affluence Research Center, Atlanta. "Their concerns are underlined by the emphasis placed on preservation of financial assets, which contrasts with attitudes from prior years, when respondents said their primary objective was capital appreciation and growth."
The study, which has been conducted twice yearly since 2002, indicates that:
—Preservation of capital is now the primary investment objective of the majority of respondents
—More than two-thirds of respondents have no plans to make any of eight major expenditures in the next 12 months
—The stock market outlook may be indicating anticipation that the market will rise in advance of an economy that will improve at a slow pace
In terms of purchasing plans, respondents indicated:
—Vehicle purchase plans have declined 30 percent from 2008
—Home remodeling plans are only one-half of what they were one year ago
—Plans to acquire either a primary residence or a vacation home have declined to record lows
The Affluent Market Tracking Study focuses on the 11.2 million households representing the wealthiest 10 percent of all U.S. households, as determined by The Federal Reserve Board. Participants in the current survey have an average annual household income of $290,000, average primary residence value of $1.2 million, average net worth of $3.1 million and average investable assets of $1.4 million.