Marketwatch reports that low-income families spend about 40% of their income on luxuries. That compares to the 65% that high-income families spend on luxury goods.
Why are low-income families spending so much of their money on luxury goods?
Marketwatch reports that nearly half of Americans attribute their profligate spending to emotion.
Emotion and money don’t mix, particularly when it comes to investing. Some of the biggest investment blunders we’ve watched investors make are when fear or greed start to drive the decision making process.
Successful investing requires a cold and calculating approach. That is of course easier said than done. This is especially true, once you’ve stopped working and no longer have the safety-net of a steady paycheck to bail you and your family out of any major investment mistakes.
It turns out that all Americans, regardless of income, spend a large percentage of their income on luxuries.
People who make the most money spend the biggest chunk of their incomes on luxury goods, but even the poorest households spend a significant amount for luxuries, according to an analysis released this week by Deutsche Bank Research.
You can read more about the spending habits of families here.