I Spent $312,900 Living Like The 1% (Here’s What I Learned)

Summary

• My dad always told me not to be impressed by money, and that advice has really stuck with me. I aim to share transparent information so you won't be overly impressed by wealth either.
• Private jet travel, if you fly six times a year for two hours each way, will cost about $100,000 annually at a rate of $4,000 per hour.
• You can lease a very nice exotic car for about $1,000 per month, or even a Rolls-Royce for approximately $4,500 per month, which equates to $50,000 per year.
• A luxury penthouse can be around $5,000 per month in most markets, but let's say $10,000 for top-tier cities, totaling $120,000 a year.
• Expensive clothes, surprisingly, are one of the cheaper luxury items—around $3,000 a year for designer pieces.
• Fancy restaurants, assuming a high-end meal once a week at $400, may come to about $20,000 per year.
• The dream ultra-wealthy lifestyle totals around $300,000 annually, meaning you'd need to earn around $550,000 pre-tax to afford it comfortably.
• Personal insight: flying private is great but not cost-efficient, and owning exotic cars provides minimal additional enjoyment over more modest vehicles.
• The incremental satisfaction from luxury can diminish rapidly, and it's often the more mass-market products that offer quality due to extensive product testing.
• Depending on your approach to wealth, you might find better value in less expensive things, like living in a duplex and renting out half, or choosing the more affordable dining option.
• The ultra-wealthy have $30 million to a billion in investable assets, and the cost of this lifestyle represents a small fraction of their income; that's when such expenses could be more justifiable.
• It's crucial to spend less than 10% of your earnings on your lifestyle to quickly achieve financial freedom, focusing on the ratio of income-to-expense as the measure of wealth.
• True happiness comes from reducing desires, not necessarily from increasing possessions. Achieving a "haves over wants" ratio can lead to a feeling of abundance and financial security.

Video

How To Take Action

I would suggest taking a step back and realizing that the image of ultra-wealthy living is often just that—an image. It’s important to understand those costs and see them for what they really are. Here’s what you can do:

First, create a dream lifestyle budget. Include things like travel, cars, housing, clothes, and dining. You might be surprised at how attainable these can be with the right income. But remember, only consider these luxuries if they represent less than 10% of your earnings. Saving the rest? That's the path to financial freedom.

Reflect on your actual enjoyment of expensive items. You’ll often find that modest vehicles and simpler experiences can bring nearly the same level of happiness. So, if you're eyeing that luxury car, try a more affordable option. The thrill can fade fast, and those extra dollars in your pocket will last a lot longer.

Consider living arrangements that can double as investments, like owning a duplex and renting out a part of it. This approach can significantly reduce your living expenses while building wealth.

When dining out, remember that expensive does not always mean better. A meal at a high-end restaurant is not only about the food but also the experience. Can you achieve that same experience at a less expensive place? Absolutely.

Focus on happiness by reducing your desires instead of accumulating more. Happiness comes from having more than you want. If you can zero out your wants, even a modest lifestyle can feel abundant.

Remember, the true measure of wealth is your income-to-expense ratio. Aim to keep that high by earning much more than you spend. This ultimately gives you peace of mind and true financial security without needing a flashy lifestyle to prove it.

Quotes

"Never be impressed by money"

– Alex Hormozi

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"Flying private is actually really nice, but it's wildly expensive and I still feel guilty for it"

– Alex Hormozi

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"You get used to it within like a week or two and honestly the only reason I got this is because I was on a podcast with Brad Lee"

– Alex Hormozi

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"Your wealth is a ratio between your expenses and your income, it is not a number"

– Alex Hormozi

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"The happiness equation… is haves over wants and if you can get your wants to zero then it doesn't matter what you have on top equals infinity"

– Alex Hormozi