Even the working rich are worried according to Forbes. "Housing has imploded, the market's a yo-yo, recession's in the air. And the 'working rich' are learning to do without." This according to Russ Alan Prince, president of a private wealth-research firm and author of the book The Middle-Class Millionaire.
Princes research points out that 78% of the Working Rich, identified as those with $1MM-$10MM in Net Worth and still working for a living, consider themselves "very or extremely concerned about their ability to maintain their current financial position." Furthermore he believes 21% of them are already reducing spending.
Compared to the first half of 2007, the last six months saw a 20% drop in Luxury spending. According to a source in the report, "Luxury consumers have never expressed such a dismal view of their financial status." This is a compounding issue for the economy as the Working Rich are known networkers. In other words they talk to one another before purchasing, which if sentiment is down can lead to a vicious circle of reduced spending. The spending is transitioning into higher perceived value items, felt to be less frivolous.
This is a big indicator the economy is in trouble as this group has been a leading indicator of things to come. Great time to make sure that your debt, budgeting and money management is firmly in place!
BTW - Broke Grad Student is running the current Carnival of Personal Finance with a great spin on the topic! Take a look!
The spending is a mixed bag of information though. Hi tech gagets continue to sell well, but Jewelry is down. Luxury car are stable, but sports cars are slowing.