I buy the general principle that living a high-income/high-expense lifestyle isn't the path to accumulating wealth, but you can rephrase the stats to get different results as well.
86% of all luxury vehicles are driven by people who are not millionaires
can be rephrased in a way that makes it seem like driving luxury vehicles is a trait of rich:
millionaires are 3x as likely to drive a luxury vehicle as non-millionaires
I wonder if this is also skewed by the "millionaire" cutoff not being as high as popular culture thinks of it being; the millionaires of 1970s films correspond to $5m+ today, and the millionaires of the roaring 20s correspond to $12m+ today. A huge proportion of people with net worths in the low single digits of millions have almost all their money in their retirement plan plus house, and not a particularly large disposable income. Sure, in theory they could get money out of the 401(k) and blow it, but the fact that it's semi-locked-up and a hassle to get out makes it easier to preserve it.
It's possible it generalizes to higher tiers of the rich, but I'm not that sure. Do people with net worths of $10m+ have similarly frugal lifestyles? Or is this mainly a feature of people with net worths in the $1m-3m range?
I just realized after reading your comment that my family were millionaires when I was in high school. We had about $25k a year income, no new cars, no college fund but we owned two properties that put us over the millionaire mark. I qualified for and ate the 25 cent lunches at school and had hand me down everything.
Have a million dollar net worth isn't necessarily fun or comfortable, my parents divorced, cashed out the houses and nothing is left, good times.
Similar story. Grew up on a dairy farm. Our taxes stated our income as around $13K for a family of 5. Farm & equipment sold for 1.2 million (2001). Government got about $600K in taxes. Another $200K went towards existing loans. $120K towards a 1000sqft 1 story ranch home for my parents to move to. They gifted 20K to each of us kids to avoid further taxes on that. Each of us has done well using it to pay off education, buying land, or reinvesting.
Anyways, they both have medical problems that no insurance would cover in the past decade (part of the reason for selling the farm). Having just turned 60, they're both sitting on about 150-200K to retire on. One can't look at this as anything except a system rigged towards a Sisyphean outcome.
This isn't the "Ovarian Lottery" Warren Buffet talks about. I doubt anything I say could get through to someone clearly after troll bait and offering no insight.
Each of us worked harder than most people who complain about being slighted by the hand of fate. I started working on the farm when I was 10 and continued helping out until I was 19. It ranks below minimum wage. As for my parents, you think that chastising their frugality and having a paid for house within their means is something to mock? Really?
Farming ranks as one of the 10 most dangerous occupations; you can be injured in pretty much any way imaginable. In fact my father was. Once while my brother was in high-school and again when I was. We each did our part staying home from school running things until my father was recovered on both counts. Trust me, 1.2 million over the course of 30 years isn't as much as it would seem.
I currently live in a neighborhood of mostly ~$1-million homes. Many of the residents are retired people who originally bought their houses in the 1960s for ~$50k. This probably explains why all the on-sale items at the supermarket get sold out right away, and why there's several thrift stores in town.
For what it's worth, my parents got here with dedicated saving: anywhere between $30k-$100k per year for the last two decades. Our investments have performed miserably, and we didn't own a home going into the housing bubble either. It can be done, but it's a lot of hard work.
Do people with net worths of $10m+ have similarly frugal lifestyles?
Or is this mainly a feature of people with net worths in the $1m-3m range?
My parents are with combined income of 7 figures now, 8 figure net worth and they live very frugally. My father drives 1997 Toyota. The wealth is mostly tied in investment and assorted properties. My mother mends socks instead of buying new ones.
The estimates of what % of the U.S. population are millionaires varies, but I was using roughly 5%. So if 95% of the population (non-millionaires) drives 86% of luxury cars, and the remaining 5% drives 14% of luxury cars, that means that the luxury car prevalence ratio among nonmillionaires:millionaires is (86/95):(14/5) = ~1:3.