Affluent Market Tracking Study #15, Spring 2009

The 15th in a continuing series of research reports based on twice-yearly surveys of the most affluent 10% of U.S. households (a total of 11.2 million households with an average $3.1 million net worth) as determined by The Federal Reserve Board. These surveys regularly measure and track their 12-month outlook for the economy, the stock market and their personal earnings, savings, investment objectives, and spending plans for 17 product categories and 8 major expenditures.

With this new report, you will learn:

• Which segments of the affluent have been reducing/deferring expenditures, which segments will do so over the next 12 months, and which segments are not cutting back.
• Reasons why the affluent are reducing/deferring their expenditures.
• Which of 8 major expenditures the affluent expect to make during the next 12 months.
• How the affluent expect to change their spending for 17 products and services during the next 12 months.
• The ways the affluent will reduce domestic vacation travel expenses and international vacation expenses.
• The ways the affluent will reduce expenses for dining out.
• Current ownership and plans to acquire a vacation home through full or fractional ownership.
• Familiarity among the affluent with the concepts and major brands of Private Residence and Destination Clubs.
• What the affluent expect of the stock market, business conditions, and their
• How the values of their home and investable assets have changed since March 2007.

This survey contained questions to help identify which segments of the affluent market are reducing or deferring expenditures (and which are not) due to current economic conditions, why they are reducing their expenditures, and for what types of products and services spending is being cut back. Related to this are questions regarding the impact of the economy over the last two years on the value of their primary residence and their investments and savings.

Also included in this survey was a series of questions about vacation home ownership and familiarity with the concepts of Private Residence and Destination Clubs. Brand familiarity, current ownership, and plans to purchase were also measured for the various concepts and services. Both of these topic areas (the reduction of expenses and vacation home ownership) have been addressed in previous studies, and comparisons are provided where appropriate. The surveys track plans for major purchases (vacation homes, primary residences, home remodeling, automobiles, boats, and cruises) during the next 12 months. The survey also tracks anticipated changes in spending during the next 12 months for 17 categories of products and services. These include fine jewelry and watches, domestic and international travel, dining in casual and upscale restaurants, furniture, major appliances, entertainment equipment, home computer equipment, entertainment, recreational activities, collectibles, designer and non-designer apparel, and charitable and political contributions.

For much of the preceding, the report shows historical trend data and data by demographic segment within the overall affluent population.

Research Methodology

Unlike other affluent and luxury market research that is based on online surveys of panels of people who are compensated for participating in regular and frequent surveys, our unique direct mail surveys are based on samples drawn at random to be representative of the precisely defined population of affluent households, consistent with the research of the Federal Reserve Board. Confident of their anonymity, the respondents to our surveys are typically more affluent and more open in providing confidential information.

Surveys were mailed to a randomly selected, national sample of 5,000 men and women in households that, based on their income and ownership of certain assets, were expected to meet the minimum net worth requirement of $800,000.

The profile of the sample is as follows: $290,000 average household income, $3.1 million average household net worth, and $1.4 million average household investable assets. The average value of their primary home is $1.2 million. The average age is 56 while 83% are married and 58% are males. The sample represents 32 states plus the District of Columbia.

The overall survey response rate was 16.8 percent. These survey results are based upon the 640 men and women who promptly responded to the survey and met the minimum net worth requirement. The maximum margin of error of this survey, at 95% confidence, is five percentage points.

Please Note: Data is delivered in a Word Zip File.