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FEATURE: Worth a Closer Look An exclusive profile of 6.1 million of America's wealthiest--where they live, what they buy. All they'd rather you never knew. By Alison Stein Wellner and John Fetto Elite, elusive and envied, the wealthy appear to inhabit a secret, rarefied world of stately mansions, luxurious yachts and private jets. It's a world most of us could only imagine. Until now.

We decided to take a peek inside the minds and wallets of 6.1 million of the households with the highest net worth in America, most worth millions and even billions today--and destined to be worth even more in the near future. We examine households that represent the creme de la creme. We included every household with a net worth of $2 million or more, about half of all households with a net worth of $250,000 or more and 1.3 million households well on their way to reaching that level of wealth. Part of a highly coveted market, the average wealthy household has $1 million in investable assets, according to the American Affluence Research Center, based in Pinecrest, Fla. These Americans, whose earnings place them in the top 10 percent, control two-thirds of the nation's wealth. The country's most affluent spend almost twice as much as the average consumer each year, according to the Consumer Expenditure Survey, and some spend far more.

Just who are these prosperous people? How did they make their money? Where do they live? What do they like to read? Do they all drive Mercedes-Benzes and Jaguars, or do some of them opt for Volkswagens? Do they really spend their time jetting around the globe and redecorating their numerous homes, or do they sometimes sack out on the couch and watch A Baby Story on TLC?

To get a closer look at the lifestyles of the rich and not-so-famous, American Demographics teamed up with Acxiom, a Little Rock, Ark.-based market research outfit. With the help of the firm's resident demographer, Josh Herman, we raided Acxiom's Personicx database, which provides data down to the household level. We were able to pair the two primary measures of wealth--annual household income and net worth--to screen for affluence. The result is an exclusive, detailed look at the demographics, psychographics and spending patterns of America's well-to-do. What we found may surprise you.

The nation's biggest spenders, it turns out, can be found outside of its urban jungles. Although plenty of prosperous people live in major metros-- New York City, L.A. and Chicago--the wealthy are also found in high concentration in towns not usually considered meccas for the rich--places like Ann Arbor, Mich.; Nashua, N.H.; and Salt Lake City. And while many marketers believe that the well-heeled are too busy to open a magazine other than the Robb Report, many of these frequent fliers do flip through in-flight glossies. When it comes to TV, we found that those plasma screens aren't just for show. We note from observing their hours watching the likes of HBO's Six Feet Under, CBS's annual Kennedy Center Honors and escapist fare such as the reruns of Babylon 5 (on the Sci Fi Channel) and Crossing Over with John Edward (on the Sci Fi Channel and in syndication), the mega-wealthy can be couch potatoes just like the rest of us. Marketers covet this kind of information. "When you're reaching the high net-worth consumer groups, you have to tap in to their mind frame," says James Sharp Brodsky, president of Sharp Communications, a New York City-based marketing firm that specializes in the affluent consumer. "You want to reach them in new, fresh ways that appeal to their sensibilities and their buying habits."

Yet America's high net-worth consumers are not all alike, and they require a variety of pitches. To this end, with the help of Acxiom, we divided the wealthy into four representative segments that reflect, among other things, their net worth, age, life stage and spending habits: Married with Money--and Children, Up and Coming, Old Money and the Upper Crust. The first segment, Married with Money and Children, aren't rich yet, but they are well on their way. "Historically, we never had a way to differentiate affluent households from one another," says Acxiom's Herman. "What will help distinguish a company in the future is being able to look at these consumers on more than just a single dimension, taking into account not just their financial resources, but also their life stage and their consumer behaviors. Only recently have the data and the mechanisms been available to do this in a multidimensional way."

Marketers have never had an easy time reaching people who live on Easy Street. In part, this is because modern Masters of the Universe aren't likely to participate in such plebeian activities as phone surveys and focus groups. In addition, many market research techniques can't offer reliable information on relatively small populations, such as the wealthy. And while we know from Acxiom that 5.4 million households have a net worth of $2 million or more, the Census Bureau reports that only 2.5 million households (2 percent of the U.S. total) earn $200,000 a year or more. That's because many affluent individuals don't work; they have high net worth but a lower income than you would think.

Now, without further ado, meet America's most wealthy.


These wealthy parents, whose lives and spending habits revolve around their preschool-age kids, are the ones to watch.

For a wealthy segment, these consumers seem, well, almost poverty-stricken. The vast majority (70 percent) are worth less than $100,000 a year, and most earn between $50,000 and $74,999. So why are these 1.3 million households included in a wealth segmentation? They're actually the wealthiest parents of preschool-age children, explains Acxiom's Herman. "Of the young parent households, these are the folks that are starting out their families already having reached the upper middle income," he says. "These are the people to watch." And they're the people that such retailers as Pottery Barn Kids, Baby Gap and Talbot's Kids target on a daily basis. Kids are the first and foremost priority. These families are far more likely than average to spend money on children's clothes: they're 773 percent more likely to spend between $200 and $249 a year on children's apparel. They're 101 percent more likely to say they enjoy watching kids' TV shows with their children.

Nearly all of these consumers (95 percent) own their home, and almost half (42 percent) own homes worth $150,000 or more. They're also the most avid do-it-yourselfers: Members of this segment are 158 percent more likely than average to roll up their sleeves and take care of home improvements on their own.

The Married with Money and Children set sometimes surprises real estate developers, who often market high-end second-home developments to empty- nesters, only to find a significant percentage of this crowd buying in. This was the case at Mountain Air Country Club in Burnsville, N.C., a development whose subdivided plots run in the $1 million range. "We've been surprised that it's not just retired people," says Nancy Haynes, vice president at Collins Haynes & Lully Advertising in Charlotte, N.C., whose firm handles the account. "We expected a target of 50-plus, but there are plenty of young families with children who have bought in," she says. Bill Cantlin, president of the Waterville, N.H.-based Waterville Co., which develops land in northern New Hampshire, has found success in a more modest price range ($300,000 for a lot, the most expensive real estate in New Hampshire that's not on the waterfront) and by using the Internet to reach potential buyers.

Individuals in this group are more likely than the average American to have a four-year college degree (37 percent have one), but they are less likely than average to have a graduate degree (only 5 percent have one). Married with Money and Children households are disproportionately white: About 80 percent are white, about 10 percent are Hispanic and less than 4 percent are Asian or black.

Parked in their driveways are family friendly cars, such as SUVs and the ubiquitous minivan. On television, these households tend to watch NBC's Fear Factor, the Discovery Channel's Discovery Sunday and TLC's A Baby Story. They tune in to ABC's Charlie Brown specials, CBS's Rudolph the Red-Nosed Reindeer specials, the NCAA Men's Basketball Championships and the Indianapolis 500. When it comes to magazine choices, this group, unlike other segments of the wealthy, prefers to read about issues relating to their children. The top publications for this set are American Baby, Baby Talk, Child, Parenting and Parents.

You will find these consumers in family-friendly locales, such as Salt Lake City and Provo-Orem, Utah. Utah has the largest share of married-couple households with children, which is why the state also has the largest share of the married-with-children affluent. The far northern Boston suburbs of Nashua, N.H., and Lowell, Mass., also make the list.

Reaching Married with Money and Children families in Salt Lake City

Upscale families with young children have one clear spending agenda: The little ones rule. So in Salt Lake City, home to many of these families, there's a brisk business to be found in aftermarket upgrades for the family SUV or minivan. Wayne Sherry, vice president of Car Concepts, an aftermarket car company in Salt Lake City, reports that sales of DVD players and other in-car entertainment systems are strong. And with entertainment systems ranging from $800 to $5,000 and up, upscale families are certainly investing in their children's happiness while on the road. Apparently, one of the privileges of wealth is never having to hear "Are we there yet?"

"We're putting a satellite dish on the car roof, [and installing] a PlayStation, DVD, you name it," says Sherry. Upgrades are status symbols, he adds. His customers often say they were motivated to upgrade their cars because of something they saw in a friend's vehicle. Apart from the effect of word of mouth, Sherry says 90 percent of his ad budget goes to radio spots, "because that's where we are--in car entertainment."


While no one in this group has yet achieved a net worth of $1 million, these millionaires-in-the-making are well on their way. Every household in this segment is headed by someone under the age of 45, and has an annual household income of at least $100,000. (That income is about 88 percent greater than

what's earned each year in all other U.S. households.) This is even more impressive when you consider that many households achieve this with only one wage earner: 37 percent of the Up and Coming group is single, a larger share than for any other segment of the affluent. Focused as they are on their high-powered careers, these householders don't hear the pitter-patter of little feet: None have children.

Although the dot-com boom of the late 1990s spawned a bumper crop of young, high-flying millionaires, most of the people in this cluster work the daily grind. Only 6 percent are self-employed, and 4 percent say they're retired. And despite the fact that this group is overrepresented in Silicon Valley, not all of them live in a big city or in a region made hot by dot-com mania. You'll also find these consumers in fast-growing metros like Boulder, Colo., and in college towns such as State College, Pa., and Ann Arbor, Mich. Perhaps this is why their hobbies are fairly basic: They over-index on tennis, yet Up and Comers also over-index on such ordinary purchases as CDs, musical instruments and video cameras.

Unlike the rest of the wealthy set, most of the Up and Coming group does not pay a mortgage, with nearly 9 in 10 (88 percent) renting their homes. Of the 12 percent who own a house, many are going budget in their choices: Almost half (47 percent) have homes worth $150,000 or less. And that's a good thing, because they probably don't have time to maintain a fancy house anyway. Marketers have learned that these fast-trackers have very little free time and are notoriously difficult to reach. Says Collins Haynes & Lully's Haynes, "We're talking about a very high-powered individual in a job--a stock broker or someone in sales at a very high level. They leave the office late, and they're not listening to the radio because they're talking on their cell phones. I've dealt with clients trying to reach the affluent since 1969, and it used to be that you could reliably reach these consumers with radio." While NPR and local sports radio still attract a few of them, it's not what it used to be, she adds.

However, Personicx data reveals that these consumers by no means live in a media vacuum. Up and Comers spend 103 percent more than average on HDTV. What incredibly crisp images are flitting across their screens? These people make time to tune in to the news, with MSNBC, for example, ranking high with the group. And they have a penchant for the otherworldly: on their must-see list is escapist programming such as Crossing Over with John Edward and Babylon 5 (both on the Sci Fi Channel), A&E's Investigative Reports and the Total Living Network's Encounters with the Unexplained. Members of this segment also say they tune in to the VH-1 Fashion Awards, the tennis championships at Wimbledon on NBC and the Kennedy Center Honors on CBS.

When it comes to magazines, these consumers don't over-index on business titles, as one might expect, but on such eclectic fare as Scientific American, Architectural Digest, Elle and National Geographic Traveler. Sharp Communications' Brodsky says he finds Vogue, Women's Wear Daily, W and the Robb Report, among others, to be good vehicles to reach this segment.

It's important to realize that Up and Coming consumers are ambitious, says Haynes. "They aspire to the lifestyle of the rich and famous, but they haven't quite cracked the code yet," she explains. These consumers know they're on the path to riches, and they're eager to look the part as quickly as possible. Bob Phillips, vice president of business development at the Ritz-Carlton, says that he has been surprised by the youthful skew of consumers interested in the brand's extension to high-end time-shares, known as the Ritz-Carlton Club. This club offers its members a chance to stay in such tony locations as Aspen, Colo., Santa Barbara, Calif. and St. Thomas in the U.S. Virgin Islands--for prices ranging from $98,000 to $490,000. About one-third of the club's members are Up and Coming consumers, Phillips says, adding that this group "is very familiar with Ritz-Carlton as a brand, but may not have developed that long-term relationship. They're saying, 'I want something that proves my success,' and a Ritz-Carlton offering does that. But they're also looking for price value and a product that makes sense to them." This is no doubt why these households over-index on purchases at low-end luxe retailers such as Crate and Barrel.

Among denizens of this set, youth matters more than money when it comes to shopping and media tastes, Personicx data reveals. What's in Up and Comer's garages? Saabs, Volkswagens and four-wheel drive vehicles. This segment is 102 percent more likely than average to say that they keep up with style and fashion, which likely influences their driving decisions.

Reaching the Up and Coming segment in Ann Arbor, Mich.

Home to the University of Michigan, Ann Arbor, strives to be more than just a college town. Appealing to the young and affluent are the myriad cultural opportunities in the area, says Martha Johnson, vice president of government and community affairs for the Ann Arbor Chamber of Commerce. And even though the young and affluent lead busy lives managing their burgeoning careers, it is possible to get on their radar screens, says Kenneth C. Fischer, president of the University Musical Society at the University of Michigan, which offers arts and cultural programming to the community. In fact, he says corporations that have a presence in the town, including Pfizer, donate money to support the arts, to make the town appealing to the Up and Coming crowd. "We want to work together to make this an attractive place that will draw young people," he says. "You don't necessarily have to go to New York to get your culture fix."

One way to reach the Up and Coming set that Fischer has found effective is to encourage involvement in the community. "We're engaging more young people on our boards of directors and more young people on our advisory committee," he says. "This year, there are two couples in their 30s chairing our major fund-raiser, and they're engaging their contemporaries. The fund-raiser costs a minimum of $300 to $1,000 per person. [The young chair-couples] are very well connected in the community of young professionals, and they've been very successful at getting their colleagues on our committees. Prior to this, the committee members were their parents. We're now focusing on recruiting a second generation."


Many of these older, wealthy consumers amassed their riches through entrepreneurship, and pour a good share of their money into homeownership.

If you're looking for wealthy consumers based on income or educational attainment alone, you just might overlook this group entirely. This segment represents the second largest group of wealthy consumers in the United States, even though 72 percent have annual incomes of $50,000 to $99,999, and

just 8 percent have incomes of $100,000 or more. And while educational attainment is often a proxy for wealth, it doesn't work with this segment. The Old Money cohort is actually the most likely of the four wealth segments highlighted to only have a high school education: 62 percent have never completed college.

Members of the Old Money group are affluent not because of what they earn, but because of what they've accumulated over the course of a working life. They're older--84 percent are 55 and older--and a large share are no longer in the work force (25 percent are retired). Therefore, despite relatively modest incomes, most members of this group (90 percent) have a net worth of $500,000 to $1 million, and 10 percent claim a net worth that's $1 million or more. A good share of this wealth is wrapped up in homeownership, Personicx data finds: 14 percent own homes worth more than $300,000; 16 percent own homes worth $200,000 to $300,000 and 23 percent own homes worth between $150,000 and $200,000. You'll find these consumers in large metros such as New York, Chicago and Philadelphia, but they're in the greatest concentration in Honolulu, Santa Barbara, Calif. and Barnstable-Yarmouth, Mass.

How did they amass their riches? Many Old Money consumers probably made their fortunes through entrepreneurship in their younger years, though 12 percent are currently self-employed. Often, Old Money consumers have already sold their businesses, which is how they have such impressive net worth, says Martha Pomerantz, principal of Lowry Hill, a financial services firm that only works with clients that have investable assets of $10 million or more. "Our typical client owned a business that's not on the radar screen, often in a small industrial park," says Pomerantz. "You drive by it and think, 'There's not much going on there.' But then you find out that the person who owned it just sold it for $20 million."

The biggest issues these clients face is how to keep funding their lifestyles, she says. Marketers who reach out to the Old Money segment have to remember that even though these consumers are worth a bundle, they're just as skittish as any other senior citizen about living on a fixed income, generous as it might be.

"The No. 1 misconception about these consumers is that they're very knowledgeable and savvy and have all the answers. What we have found is that they don't know a lot about the financial side of their lives," says Pomerantz.

To reach Old Money customers, she recommends a limited advertising program to supplement word-of-mouth and event marketing. Personicx finds that Old Money consumers are 81 percent more likely than average to say advertising is a waste of their time.

"We do limited advertising which supports our general image of being high-end, in high-end publications that our target market is likely to pick up and read, such as Fortune, high-end leisure magazines, and special magazines in the Naples, Fla., area where we also have an office," she explains.

Events include low-key, very upscale affairs, such as a special lunch sponsored by Lowry Hill this past April at the Minneapolis Institute of Arts. Lowry arranged to have the museum's curator of design address 40 guests of the firm. Events like these help to cement relationships and promote invaluable word-of-mouth advertising, says Pomerantz.

As one would expect, members of the Old Money group have more highfalutin hobbies and recreational activities than average. Significantly involved in giving back to their community, they are 127 percent more likely than average to be engaged in local civic issues, and 127 percent more likely to write a letter to the editor of their newspaper (which suggests they read the newspaper). They also over-index on antique shopping and bird watching.

As with their finances, the Old Money segment takes few chances with what's in their garages: These consumers are far more likely than average to have recently purchased a Cadillac (328 percent more likely than average), Lincoln (171 percent more likely) or a Mercedes-Benz (162 percent more likely), according to Personicx.

Unlike the Upper Crust, which builds many of its media choices around favorite pastimes, such as golf, the Old Money segment has a more eclectic media palate. Over the course of a week, consumers in this group say they've watched ABC's The Practice and Primetime Thursday; CBS's 60 Minutes, 60 Minutes II and PBS's Nova. They also plan to tune in to television specials, including the Kennedy Center Awards, Target Stars on Ice, and Christmas in Rockefeller Center.

Their favorite magazines include New York, Kiplinger Finance, U.S. News & World Report and Southern Living.

Reaching Old Money consumers in Naples, Fla.

Naples, a town perched on Florida's gulf coast, is home to a large share of older consumers who have money to spend. As such, there's no lack of upscale retail stores, restaurants and other cultural amenities, including the philharmonic, art galleries and theaters, says Jack Wert, executive director of the Greater Naples, Marco Island, Everglades Convention and Visitors Bureau.

The number of upscale consumers in the area is one of the reasons the FNB Corporation, a banking company, moved its headquarters from Hermitage, Pa., to Naples in 2001. "The wealth is attractive to our bank as well as other banks," says Clay Cone, a vice president at the financial institution. In fact, while FNB has 61 branches throughout the state, in Naples alone, the bank maintains 12 branches.

To attract wealthy customers, FNB has focused on products that would appeal to the group, according to Cone. "We've expanded the range of financial products targeted toward that segment," he says. "Our expansion into offering wealth management and insurance products began three years ago and we're seeing tremendous growth in those areas."

Like many companies that target the upscale market, FNB devotes very little of its budget to traditional advertising. "No TV and very little print," says Cone. "About 90 percent of our advertising budget goes into community and civic support for things like Habitat for Humanity, United Way and the YMCA, because it's good for the community and because if people see that you're out there supporting the community, they will bank with you. When the bank started operations in Florida 14 years ago, that was part of the plan, and it has served us very well."


Mostly married, white, well-educated and living in a big house, about half the members of this segment have kids living at home. The Upper Crust represents the single largest segment of the wealthy in the country, and probably most closely embodies the lifestyle that most of us imagine when we think of the good life. These people are all worth a cool $2 million or more, and they all earn salaries that are in the six-figure category or higher--often much, much higher.

Indeed, most members of the Upper Crust are still bringing home a paycheck. Despite their age and wealth, just 5 percent are retired, but many aren't bowing and scraping to a boss all day long. A substantial share of the Upper Crust report to themselves: 11 percent are self-employed. A quick scan through the pages of The Rich Register, a directory that is updated regularly and published on a made-to-order basis by The Rich Register, based in Austin, Texas, reveals that one of the best ways to become wealthy in the United States is to launch a successful company--or be related to someone who has. Education is also part of the wealth equation with this group: Almost half (45 percent) have a graduate degree and another 36 percent have a college degree.

You'll find these consumers in just the places you'd expect to find the wealthy. New York City has the highest number of the Upper Crust, followed by Los Angeles, Washington, D.C., Nassau-Suffolk Counties in New York, and Chicago. The places with the highest share of the wealthy are in the suburbs and other metros. Stamford, Conn., has the highest share of members of the Upper Crust by far, with approximately 25 percent of all households. Danbury, Conn., and San Jose, Calif., also boast higher-than-average shares of this group. San Francisco is also home to many in this segment: 10 percent of all households in the City by the Bay fall into this category of the affluent.

Of course, the good life entails living in a good house. More than half the people in this segment (52 percent) own homes worth more than $300,000, and they spend big bucks maintaining them. This segment is 333 percent more likely than average to spend $5,000 or more on home improvements and 338 percent more likely to spend money on seeds for the garden. They're also concerned about securing the family manse: The Upper Crust is 200 percent more likely than average to have a home security system.

The vast majority of individuals in this segment share their big and secure house with a spouse, Personicx data reveals: 84 percent are married (60 percent more likely than the average American) and 44 percent have kids at home (33 percent more likely than average). In the garage, you'll most likely find stereotypical "rich people" cars, including a Lexus, Mercedes-Benz, Jaguar, Volvo or BMW. Members of the Upper Crust are 92 percent more likely than average to say they think that foreign cars are more prestigious than American autos.

As far as hobbies and recreation, the Upper Crust really do pay attention to golf and tennis. They say that the TV specials they're "sure to watch" include such tony choices as The Championships at Wimbledon and the Buick Golf International, and in the past week, they've honed their golf games further by tuning in to ESPN's broadcasts of PGA Golf.

Tapping into an obsession for chasing a little white ball around perfectly manicured fairways is a well-known marketing strategy for reaching this segment. High-end shirt retailer Paul Stuart places ads in golf magazines and also hosts events with golf themes, including those surrounding the U.S. Open, says Jack Freedman, director of planning and brand management at the retailer. Not surprisingly, Upper Crusters over-index on golf club and golf-glove ownership, Personicx reveals.

Despite this obsession with golf, the Upper Crust isn't always teeing off. If their television preferences are any indication, they're just as obsessed with celebrities and other sporting events, like basketball, as the rest of us. These households are also very likely to tune in to the Emmy Awards and the NCAA Basketball Championships. And in the past week, the Upper Crust over-index on watching shows such as HBO's Six Feet Under, Fox's Boston Public, NBC's Ed and ABC's The Practice.

When it comes to the glossies, these frequent fliers say they're actually pulling the in-flight magazines out of the seat pocket in front of them and taking a look. (They over-index on overseas trips.) The top magazines for Upper Crusters are those of commercial air carriers, including Hemispheres (United Airlines) and American Way (American Airlines). Some are even slumming it on discount air carriers: Southwest Airline's Spirit magazine is in the top 10 for the group. Top magazines earthbound, include Gourmet and Forbes.

Diversity in reading material is one thing, but don't look for diversity in race and ethnicity in this group. Nine in 10 people in this segment are white, compared with about 7 in 10 of the U.S. population as a whole. Less than 1 percent is black, compared with 12 percent of the U.S. population and 4 percent are Hispanic, compared with 12 percent of the overall population. Another 4 percent are Asian, slightly higher than the total U.S. share of 3.6 percent.

Reaching the Upper Crust in Stamford, Conn.

This metro is home to some of the most well-heeled towns within commuting distance of Manhattan: Darien, Greenwich, New Canaan, Norwalk, Stamford, Weston, Westport and Wilton. It's also home to one of the largest affluent populations in the country: 25 percent of households in this region are part of the Upper Crust. Famous residents include Martha Stewart, Paul Newman, Joanne Woodward and Tommy Hilfiger.

Fortune 500 firms headquartered in Stamford include GE, UBS-Warburg, Pitney-Bowes and International Paper. Executives at the head office invest in homes to impress, says Jack Condlin, president of the Stamford Chamber of Commerce: "People here spend a lot of time at work, so they want a nice place to go home to."

Marketers who have successfully reached the Upper Crust consumer say this group shuns media-based advertising. "We do very little advertising," says David Woods, principal at Culpen & Woods Architects in Stamford, a firm that typically does not take on a residential project of less than $250,000 in construction costs. "If we do advertise, it's typically in a book for a charitable organization--for raffles, silent auctions, local sports teams, such as Little League, youth athletic leagues and high school leagues." Woods doesn't place ads in Greenwich magazine, or in any other magazine, for that matter. He prefers to write articles about the firm's commercial construction for the Fairfield County Business Journal, and serve on the board of his community association and as president of the Hockey Booster Club in Greenwich. "The best way I know to market to our clientele is by being involved in local organizations, through volunteering and by word of mouth," he says.

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