In spite of Dave and Linda’s high income, they are two paychecks away from insolvency. How can this be possible? Perhaps it has something to do with Linda’s collection of nearly 200 pairs of shoes all purchased on sale from a variety of upscale retailers. She insists that she saved thousands and thousands of dollars by buying these sale-priced items. Her husband is also a clothes horse. He has a closet full of suits all purchased at fall sales, winter sales, spring sales. . . . Many people who are Income Statement affluent like this couple are bargain shopping commandos. They are saving themselves so much money on purchases that they are nearly bankrupt!
It not only requires money to take advantage of all these “bargains” it takes time to plan and shop for these super discounts. Last year this couple purchased apparel from more than 30 different sources. Admittedly some of these purchases were made online, but in most cases Dave and/or Linda made a personal visit. They are relentless in searching for new purchasing opportunities.
Contrast this couple’s shopping orientation with the millionaire next door types profiled in Stop Acting Rich (see pages 18 and 19). During the year in which they first became millionaires they had 2.45 times [median] the expected level of net worth given their age and income. In a typical year, on average, these millionaires purchased apparel from only 4.7 stores. Those stores which were mentioned by at least 20% of these millionaires include: Costco, Dillard’s, “favorite independent store,” J.C. Penney, Kohl’s, Macy’s, Nordstrom [especially men’s shoes], Target, and Wal-Mart.
What are the chances that Dave and Linda can adopt the retail patronage habits of the millionaire next door types profiled?