Slice of life 🍋

08.24.2023

There’s only a few more weeks of summer left, so make sure to squeeze in a quick flight or last-minute road trip while you still can.  

The average cost of a new car is now $48,000,* for anyone hoping to upgrade their set of wheels before hitting the pavement, which is 25% more than before the pandemic. Speaking of sticker shock, Rolls-Royce just debuted a $30 million* roadster.   

We won’t say it’s time to turn your lemons into lemonade (even though it’s perfect sipping season), but we will say that life is about options: Help prepare for the sweet (and hopefully not too sour) moments ahead with these passive income strategies. For those with a zest for the finer things, we’re peeling back the latest luxe headlines for a closer look. 

— The Editors

MONEY

Who wants to be a millionaire? The list of global millionaires just got shorter, down 3.5 million(aires)* from last year. This may be in part due to high inflation, rising interest rates, and currency depreciation. But don’t give up hope yet: There are 22.7 million adults with more than $1 million in assets in the U.S. (more than anywhere else) and there are four times as many millionaires today as there were at the turn of the century. Keep tabs on your own net worth with our tracker.

The global travel industry takes flight ✈️: According to the World Travel & Tourism Council, travel is set to become a $15.5 trillion industry* by 2033, accounting for more than 11.6% of the global economy. The report projects that in 10 years’ time, the industry will employ up to 430 million people. One segment driving travel trends this summer is luxury travelers, who are fueling demand for exclusive and private experiences: Yacht bookings are up 79%* compared to 2019, with high demand in the Caribbean, Croatia, Greece, and San Tropez. 

Lucky number$ set a new record: The winner of the $1.6 billion Powerball jackpot* has made history scoring the largest lotto prize ever. This is the fifth time in the past five years that the jackpot has surpassed the billion-dollar mark. Whether the winner picks the lump sum or annuity payments, both options come with a hefty tax bill. And while we can’t all be so lucky, coming into a sizeable sum of money, aka windfall, can be overwhelming. If you find yourself in this position, there are steps to take to avoid some common pitfalls.  

Feeling lucky? 🔮 

Last week, a third of our poll respondents said they use cash for tipping and nearly the same amount said, “Huh? I never use bills” (32%). Some spenders wrote in to say they use dollar bills for gas, their grandchildren’s allowances, and drinks after golf.  

If you’re like the 14% who said they use cash to purchase scratch-offs, the odds of winning the lotto are currently one in 292.2 million,* though it’s still fun to think about how you might spend it.  

 

Tell us: What’s your first money move if you win?

  • My dream home
  • A fancy new car
  • A luxury watch or expensive jewelry
  • A trip around the world
  • A yacht with my name on it
  • I’d retire first!
  • I’d pay off all my debt

PLAY

The appeal of “quiet luxury” 

The pop culture fascination with “quiet luxury” – sporting minimalist designer fashion brands synonymous with inconspicuous wealth – may be contributing to a rise in demand for high-end goods.  

According to a recent report, 95% of luxury brands* saw profits increase in 2022, and more Americans across all ages and income brackets are getting swept up. Americans with a household income of $50,000 or less make up about 27% of regular luxury consumers, nearly as many as those with an income of $150,000 or more. Gen Zers are making their first luxury purchases earlier than Millennials did (around age 15), and one study predicts* that together, these two generations will make up roughly 80% of luxury spending by 2030. 

While research shows that Gen Z is saving less than older generations (just 5.9% of their income), some might be wondering how they can afford to splurge. Vox says it might be because of “Buy Now, Pay Later” platforms and the fact that many young adults still live at home, increasing their disposable income. 

WORK

Taking stock: the salaries of the 1% by state  

Ever wonder where your paycheck lands you on the wealth spectrum? According to a new study, it now takes more than $650,000 a year* to be among the top 1% of the wealthiest households in the U.S. 

The average varies by state: Topping the list is Connecticut ($952,902), followed by Massachusetts ($903,401), California ($844,266), New Jersey ($817,346), and Washington ($804,853). Coming in at the lowest income threshold to be considered “ultra wealthy" is Mississippi ($381,919) and West Virginia ($367,582).   

For a look at the average net worth by state, check out our list on The Currency™.

LIFE

Zeroing in on generational wealth  

Saving for retirement is on many Americans’ minds – in fact, our research shows “How much do I need for retirement?” is one of the most pressing money questions asked today. The question is now shifting to “How much money should I have at the end of retirement?” For some, the answer is zero.  

It's an approach embraced by billionaires from Warren Buffett to Bill Gates, though regardless of wealth, many workers are trying to spend or give away their cash in their lifetime,* instead of leaving it to children, family, or friends to inherit. Perhaps that’s because an estimated 70% of generational wealth doesn’t make it past the second generation, and 90% disappears by the third. 

There are ways to help your children become financially self-sufficient, from investing in life experiences, opening a 529 savings plan, and creating a Roth IRA for their retirement. Read more on this money approach.

 

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The Currency editors

Staff contributors

The CurrencyTM, a publication from Empower, covers the latest financial news and views shaping how we live, work, and play. We keep you current on ways to plan, save, and invest for life.

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