How much Millionaires Spend?

Around 3.5% households in USA are millionaires. In one study of millionaire households of America, they have shown that, how much an average millionaire spend every year?

According to the study, On and average, millionaires’ total realized annual income is less than 7% of their Total Net Worth (Wealth). In simple words, Millionaires live on less than 7% of their Total Wealth.

Isn’t it amazing? Millionaires spend less than 7% of their total wealth every year. Say for Example, if somebody has a net worth of Rs. 10 Crores than he will spend less than Rs.70 Lakhs per year. At a first look you will think that, it’s fine. After all Rs.70 Lakhs is much more than anyone needs….

But wait…. These people lived their lives like same even when they were not the millionaires. Means when they had Net worth of Rs.10 Lakhs, they were living well below Rs.70,000 per year…!!!!

While most of the people do is, they live above their means. They spend more than they earn. How anyone can spend more than they earn? Well, by taking a debt. By leveraging their life styles. Most of the people in this world fuel their high status life style with borrowed money and that’s why sooner or later they will be poor.

Now, ask yourself one question – How much is your Net Worth & How much you spend every year percentage wise of your Total Net Worth (Wealth)?

Many people are spending more than 20% of their total net worth every year. Many are spending even more than this. Most of the people fuel their life styles with debt. While a Real Millionaire never spend more than 7% of his total net worth as well as fuel his life style with a debt.