What Do Rich People Drive

Yahoo is probably second only to MSN for publishing clickbait articles.

I've read somewhere that the difference between rich people and poor people is the way they spend their money. Invest for retirement or a rainy day. Don't spent money to impress people. Don't waste money going out to bars. Etc.

A few years ago my son and I went to Cars and Coffee in the Silicon Valley. It was a Ferrari day and there were a couple Enzos there. There was a guy dressed in a white linen suit, gold chain and a Rolex there with a 308 (?). I told my son that he wanted everyone to think he was rich. Then there was the guy who owned one of the Enzos. His kid (5-6ish) was sitting in the car playing on a handheld and eating cookies or something (!). The owner walked up in a T shirt, cut off jeans and a pair of flip flops. I told my son "he's the rich guy." He had enough money that he didn't care what anyone thought. He was one of the founders of some big tech firm. Not the face guy, the tech guy.

The CEO of my company is worth over $1B. When I started there 13 years ago he had a Koenigsegg and a garage full of Ferraris (5). When the Tesla Model S came out our chip drove the infotainment system. After about a year he sold off all of his sports cars and now has a garage full of Teslas (No Plaid though). 

I grew up lower to lower middle class. I didn't have any money to save for the majority of my life. I've worked hard and lived like I didn't have a safety net so I'd never have to ask anyone for anything. We have purchased new cars when we needed them but drove them for at least 120k miles. Currently 4/5 cars we own are 10+ years old, were purchased used and they are all paid for. I could go out and buy just about any new car right now.  Instead I'm working on life goals: Get the kids though college debt free, help them purchase homes when the time comes and retire in good financial shape. Once I'm 100% sure those are covered I'll probably splurge a bit on a new(er) sports car.

Beer Baron said:

If I had a million dollars, we wouldn't have to walk to the store.

If I had a million dollars, we'd ride in a limo because that costs more.

Apparently the correct answer is K car.

Datsun310Guy said:

I'm in Industrial Sales - same issue.  I can buy a used $25-$30,000 Cadillac and get grief all day long.  Drive a $60,000 Silverado and not a word. 

Son pulls in to work in his C5, everybody comments on how well the water treatment business must be treating him.

They're all driving $60, 000 pickups.

I can drive anything I want.

I drive a Chevy Spark.

David S. Wallens said:

My grandfather, may he rest in peace, owned property in New York City. 

He passed when I was very young, but I remember my grandmother telling a story about him car shopping.

He was thinking of buying a Cadillac.

No, his business partner said, we should drive Buicks.

And my grandmother, may she also rest in peace, always had a Buick. 

My father grew up lower middle class. There was always food, decent clothes that fit, and a (rented) roof over their heads, but not much more. By the mid 70's, he had put himself through college, finished his 6 years in the Air Guard,  and was doing pretty darn good, by his standards, as a CPA. He had made partner in a small local firm just a few years earlier. 

In December, 1976, my mother and I were at her parents for dinner, and my father was going to join us after work. He was late, which was unusual for him, but the '69 Vista Cruiser had been troublesome lately. Finally he showed up. Big grin. "Look outside!"  "What's that?", I asked. It was a '76 Coupe DeVille, Red/Red with a white padded top.

He must've been the proudest guy on the beltway as he drove his new Caddy to work, from work, to visit clients, to the hardware store, to the barber, to Cub Scout meetings, to...

About 3 months later he announced one evening that my mother would be driving the Cadillac and he would drive the '73 Olds Omega (orange with a brown top, The Pumpkin). The Managing Partner had pulled him aside and explained that accountants didn't drive Cadillacs, lawyers drove Cadillacs. It's OK for lawyers to look like they're taking a lot of your money, but it's not OK for not accountants.

I have experienced this kind of wacky car judgement forever. I had a c4 when I was 26. It was nice, it was 8 years old. I paid $17k for it which wasn't chump change at the time but way less than any of the new cars in the lot, constant comments about how "it must be nice". Sold that car for $1500 more than I paid 2 years later. 
Then I had it with a B Body station wagon. I bought it super cheap from someone that got it from their grandparents and I put nice wheels and paint and a few other things and people would bust my balls for all the "money I was wasting" on that car. They never could take a step back and look at their monthly payments. 
 

I am associates with a few people that have very high net worth (one over a billion) his daily is an S class sedan, 2 others that are high but not billions high, F250 crew cab and has a nearly identical new one every year and the third drives a high end Volvo (not sure of the model). 

In reply to CAinCA :

Good plan. Sounds like you're on the same path I took. I've now been retired for a few years. Last year I splurged on a new MX-5 RF GT. I would never have done that before retirement, even though I could have.

BTW, this is a great common sense book on how to achieve financial objectives. I'd been following this strategy long before the book was written (or probably before the author was born). When I read it, it validated the lifestyle I had chosen, because that lifestyle allowed me to reach a very comfortable retirement while living a  comfortable ( yet modest) life in the meantime:

Wealthy people are wealthy because they don't spend all their money. 

I'm sure there are people out there who can't understand how I can have 4 cars/trucks, 3 motorcycles, a paid-for home worth $350k (about average around here) and take vacations whenever I want.  Do I consider myself rich? No. I look at it as 'normal', but most of the people I know live in a different 'normal' that involves endless car payments and mortgages they won't pay off until they are deep into retirement. I'm 58. 

I'm not a follower of DR, but he's basically correct. My accidental way of living pretty much duplicates his 'plan' and has proven to be successful for me.

And, I don't drive a vehicle worth more than $10,000.

ddavidv said:

Wealthy people are wealthy because they don't spend all their money. 

But what is the direction of causation?

It's just as true that: Wealthy people don't spend all their money, because they have more than they need to spend.

The more money you have, the easier it is to not spend it all, or to take advantage of long term strategies that rely on making no money (or losing money) for several years in order to be able to make massive amounts of money later.

To quote Terry Pratchett...

“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

"Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

"But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

"This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.”

My parents think I'm ballin because I have a Lexus. It's 20 years old and I bought it for $3000 but they don't know jack about cars.

I was talking about first cars with one of my daughters yesterday (and, no... she's not getting a brand new car).

She said, "I don't want anything too nice. All the kids at school drive stuff from, like, 2000."

Sidebar:

There's one kid that I always notice when I'm waiting in line to pick her up in the afternoon. He drives a 1986-ish Jaguar XJ-6 with aluminum mesh wheels, and looks like he's sporting a David S. Wallens Starter Haircut.

I grew up in a notoriously affluent town (somehow I wasn't one of those people) and I still visit there a lot because my parents still live there. Growing up in the 80's-90's, everyone had a BMW, Mercedes, Volvo, or Saab. Today, save for Saab (RIP), all of those are still in the mix. Added to that are Tesla, Lexus, Toyota (especially the SUV's and hybrids), and domestic trucks and SUV's of all makes, especially Jeeps. When a half-ton truck with a few options costs $70k, they kinda become luxury vehicles by default. Lots of Raptors and big diesel trucks, too.

I know someone who lives there that's a CEO, and his household has an Escalade, a Tesla, and a Raptor. Wife drives the Escalade to haul the kids, he daily drives the Tesla, and he has the Raptor "for the beach". 

In reply to Beer Baron :

As mentioned in another thread - being poor is expensive. 

My grandfather was worth a fair bit as an oil company VP and while they owned a decent sized house in a nice suburb of Atlanta, he had my grandmother never drove fancy cars. She drove a Caprice. He drove a Pinto wagon with a 4 spd manual, eventually replaced by a Geo Metro. Although they would swap depending on needs.  Even when he passed away in the late 90's, the only car they had was a mid-sized Olds. 

In reply to CAinCA :

Or!

He wore a white linen suit because they're comfortable or had a lunch date with his SO afterwards. I wear linen in the summer all the time. 

Maybe he likes Rolex's and Ferrari's. Usually car people are watch people too.

The gold chain could be a gift. Or he just likes it with his outfit and watch.

You assume he wants everyone to think he's rich but he might not care what other people think. Yet, you're doing all the thinking based off of seeing him 1 morning out of the 365 mornings in that year. The other guy might've been dressed that casually because he had other plans that day. You don't know.

I try not to judge people based off what they wear or buy especially when I see them at a insignificant weekend car event. I hate that we do that to each other and pass that bad habit down to our kids to do the same.  

I drive a '91 300zx 

It is wonderful, but wasn't expensive or costly to maintain. I learned to live below my means when I was poor and continue out of habit now that I can drive whatever I want.

Around here, the rich people do not really stand out. MB and BMW suvs along with the very popular Grand Cherokee tend to be the utilitarian appliances of choice. When my GC was totaled over the summer I bought a used Cadillac; very nice car but cheap enough to pay cash and not notice. I see my share of Ferraris, McClarens and a lot of C8s now but they all daily an Oddysey.

yupididit said:

In reply to CAinCA :

Or!

He wore a white linen suit because they're comfortable or had a lunch date with his SO afterwards. I wear linen in the summer all the time. 

Maybe he likes Rolex's and Ferrari's. Usually car people are watch people too.

The gold chain could be a gift. Or he just likes it with his outfit and watch.

You assume he wants everyone to think he's rich but he might not care what other people think. Yet, you're doing all the thinking based off of seeing him 1 morning out of the 365 mornings in that year. The other guy might've been dressed that casually because he had other plans that day. You don't know.

I try not to judge people based off what they wear or buy especially when I see them at a insignificant weekend car event. I hate that we do that to each other and pass that bad habit down to our kids to do the same.  

I assumed it was a radwood, tongue-in-cheek kind of thing where the guy was really leaning into the '80s Ferrari owner' role that people probably project onto him when they see his car.

yupididit said:

In reply to CAinCA :

I try not to judge people based off what they wear or buy especially when I see them at a insignificant weekend car event. I hate that we do that to each other and pass that bad habit down to our kids to do the same.  

Very much this! One local guy enjoys driving his F40 to cars and coffee; killshot flex.

He doesn't actually drive it around to run errands, just a few times a month. Pretty sure he dailys a M4 that doesn't stand out in the crowd.

Around here it's Gwagens, for those that want to show off their money. The more subtle drive range rovers or LR4s. 

While I don't know all the Ferrari owners around here, the ones I do know have a few of them, and only take them out for Sunday drives if they move them at all. 

Now the families almost making 6 figures drive a ton of flashy E36 M3, but that's just keeping their cookie cutter neighborhoods looking the part. I swear some of the HOAs must require BMW SUVs in their covenants. 

In reply to RX Reven' :

I never checked the math, but according to Consumer's Reports the break even point of buying new verses used is 10 years.

CAinCA said:

I've read somewhere that the difference between rich people and poor people is the way they spend their money. Invest for retirement or a rainy day...

If a person barely makes enough to make ends meet or in fact do not, today and tomorrow are the biggest concerns.

Peabody said: Son pulls in to work in his C5, everybody comments on how well the water treatment business must be treating him. They're all driving $60, 000 pickups.

Lol, yeah had a buddy get dumped on all the time about how he must be rolling in dough driving a $7,000 20 year old boxster by his electrician co-workers all driving brand new F150s and Silverados they paid 10x that for.

After many years of meeting various people of different means. I really can't tell the difference between a random person who is wealthy, high income, or middle class. Trying to figure it out by where they live or what they drive is very difficult. Some who appear poor just don't care for fancy things, while a few that make a lot spend more than they can really afford. 

I pulled into a parking lot in my '07 Cayman. A guy in a Jeep Rubicon with the 4wd Parts catalog thrown at it commented "I wish I could afford a Porsche." I replied that I paid $30k for it and he had more money in bolt-ons for his $50k Jeep. He got in his Jeep and drove off silent.

Andy Neuman said:

Some who appear poor just don't care for fancy things

I would probably be considered wealthy, or at least very comfortable, but most of my favourite clothes are... well worn.

So last year just before Thanksgiving I went in to the store I frequent to get something and the lady on the cash said, we are giving back to the community, and giving away turkeys and hams to those less fortunate, would you be interested in either?

I told her that I was fine, thank you, and that there were probably others that could use it more than me.

And had a good chuckle on the way home.

I have found that what people spend their money often does not make sense. 

I know wealthy people who drive pedestrian cars but have a collection of very expensive watches and houses on every nice beach in the USA. 

I know average "well off" people who appear to drive a bunch of fancy cars, but all those vehicles were purchased salvage and repaired for cheap. 

I know extremely wealthy people who despite owning nicer vehicles never actually drive them because they so frequently use taxis and hired drivers. This person in particular would probably take a private plane or helicopter everywhere they went if it were not for their somewhat more down to earth children telling them that "it's a bit much."

RX Reven' said:

This is so deliciously stereotypical (Santa Clarita Diet)...

I get that realtors need something that can cart around an entire family and be easy to get in and out of for their clients but this is the norm (at least in my area) and makes me think commissions are waaay too high.

 

 

Given you posted pics of  a street close to one of my places, and I know both of those people in the photo...

• The lease payment on that car is fully deductible
• No RE agent drives with their clients after covid- they meet them there

The #1 and #2 realtor in the area you mentioned, 1 has a Phantom (house worth about 6M)  and the other (house worth about 4.5M) drives a CGT/GT3RS. 

Last 14 years, I have sold and bought all my properties without a realtor. It is a service I really don't need, and anyone who has a 6th grade US education, can do it without them.  Just like I don't pay anyone to replace my brakes, I don't pay anyone  commission to find me houses either. The internet has changed the world.  Having said that, when I want pocket listings, and off market deals, I keep a few friends in LA/VC/SB county, where you give them a flat fee and they will feed you more information than you need.