Investment Habits of Affluent Versus Non-affluent Investors

What is the main difference between affluent and non-affluent investors?  Surprisingly it’s not high income.

  • Most affluent investors are not high wage earners; rather, they are very methodical planners. They set a plan with a high savings rate and set an asset allocation for their savings, and then make minor tweaks to those allocations over time.

They have a plan and they stick to it.

  • There’s a big difference in the investment habits of the affluent versus the non-affluent: More than 50% of affluent investors utilize equities as a large portion of their asset allocation, while just 35% of the non-affluent prefer stocks and would rather invest in cash, CDs, fixed income, etc.

Summary: the major differences between the affluent and the non-affluent is planning and the willingness to take a well defined risk.  The big question is why the non-affluent don’t plan or have a larger part of their assets in equities.

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