Monday, July 13, 2009

What Cars Do the Wealthy Drive?

There is a common misconception that the wealthy drive Ferraris, have multimillion dollar houses, and wear extremely expensive clothes. Typically, those who drive expensive cars and wear expensive jewelry have a low net worth. Those with a high net worth are often unconcerned about how they are viewed by others. The prosperous value their financial independence much more than displaying high social status.

Forbes researched the 10 richest people to find out what kind of cars they drive. The results are interesting. “You won’t find a Bugatti, Ferrari, or BMW driven by these billionaires. But you will find a Lincoln, a Mazda, even a Dodge and a Ford. It seems that for the super-rich, a vehicle is seen not as a status symbol but a means to an end in which to get from point A to point B. Status is something that these billionaires need not prove to others. In many cases, the people on our list prefer to live inconspicuously.” (Nate Chapnick, “Top 10 Vehicles Owned by Billionaires,” Forbes) On average, the cars they drive are six years old. Research from the book The Millionaire Next Door revealed that eighty percent of millionaires spent less than $41,300 on their most expensive car. (Thomas J. Stanley, William D. Danko, The Millionaire Next Door, (New York: Simon & Schuster, 1996) p. 113) In 2006, Warren Buffet, the richest man in the world, drove a 2001 Lincoln Towncar with the license plate “Thirty.”

Oftentimes those who display the highest social status (big house, fancy cars, expensive clothes, jewelry) actually have the least in terms of net worth and financial independence. They create the illusion of wealth by greatly leveraging their income to purchase items on credit. A great deal of their money goes toward paying interest, and nothing they have is really theirs—it is the bank’s. The prosperous enjoy the security and independence of owning their possessions more than social praise and status. This paradox is similar to the Indian proverb, “A mango tree loaded with fruit bends to the ground; the one without fruit stands tall.” Or as they say in Texas, "Big Hat, No Cattle."

1 comment:

Sarah said...

great post. there's now a website for tom stanley ( where he has a blog about this stuff, too.