In
marketing
Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...
and
financial services, mass affluent and emerging affluent are the high end of the
mass market
The term "mass market" refers to a market for goods produced on a large scale for a significant number of end consumers. The mass market differs from the niche market in that the former focuses on consumers with a wide variety of backgrounds wi ...
, or individuals with US$100,000 to US$1,000,000 of
liquid financial assets plus an annual household income over US$75,000.
Mass affluent consumers are an important target market for sellers of
luxury goods.
Difference from upper middle income
There may be a high correlation between the households in the upper-middle reaches of the income strata and the mass affluent, but there are differences. Social class is the result of a person's function within society rather than merely the income of the household in which he or she resides. Both terms refer to people whose
wealth
Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an I ...
or
income
Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. Fo ...
is above the average, yet below the top. As opposed to households with above average incomes the mass affluent are also defined through
liquid assets
In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the ...
such as stocks, bonds, cash, and mutual funds.
Fixed assets
A fixed asset, also known as long-lived assets or property, plant and equipment (PP&E), is a term used in accounting for assets and property that may not easily be converted into cash. Fixed assets are different from current assets, such as ...
such as real estate are not commonly counted. This is because liquid assets provide more financial flexibility, which is a desirable trait in customers.
The mass affluent have been characterized as those who save more than they spend and invest for their future. While they worry about funding their children's college education, they realize other savings and loan options exist and they are not opposed to their children paying some part of their educational costs. The mass affluent generally may worry about replacing their paycheck in retirement, and may need to be encouraged to spend more money during their retirement years. They often wish to leave an inheritance to their children. The mass affluent will have between US$500,000 and $1.5million in investable assets upon retirement with a net worth between $500,000 and $2.5million. They spend between $4,000 and $10,000 per month in retirement.
[Marc S. Freedman. (Feb. 2, 2009). "Mass appeal" http://www.financial-planning.com/fp_issues/2009_2/mass-appeal2660846-1.html]
In the United States
In the United States there are roughly 33 million mass affluent households, and they own roughly 37% of America's liquid financial assets.
[Mass Affluent Investors Appear at Significant Risk Should Real Estate Bubble Burst](_blank)
Spectrum Group Among family households, approximately thirty percent could be described as being mass affluent.
See also
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Affluence in the United States
Affluence refers to an individual's or household's economical and financial advantage in comparison to others. It may be assessed through either income or wealth.
In absolute terms affluence is a relatively widespread phenomenon in the Unite ...
*
High-net-worth individual
*
Income in the United States
__NOTOC__
Income in the United States is measured by the various federal agencies including the Internal Revenue Service, Bureau of Labor Statistics, US Department of Commerce, and the US Census Bureau. Additionally, various agencies, including the ...
*
Income quintiles
*
Luxury good
In economics, a luxury good (or upmarket good) is a good for which demand increases more than what is proportional as income rises, so that expenditures on the good become a greater proportion of overall spending. Luxury goods are in contrast t ...
*
Status brand
*
The professional/managerial middle class
*
Wealth in the United States
References
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Further reading
* Nunes, Paul, and Brian Johnson
Mass Affluence: Seven New Rules of Marketing to Today's Consumer Harvard Business School Press. 2004.
* Silverstein, Michael J., and Neil Fiske
Trading Up: Why Consumers Want New Luxury Goods— and How Companies Create Them Portfolio. 2004.
External links
Here Come the Mass Affluent CNN/Money
You're Not Rich, but Now You Can Fake It Slate
Wealth Management: The Race to Serve the Mass Affluent FinanceTech
PaymentsNews
*
ttp://business.scotsman.com/topics.cfm?tid=350&id=523612002 Attracting the mass-affluent business.scotsman.com
Chasing the Mass Affluent CustomersMass Affluence: Seven New Rules for Marketing to Today's CustomerLuxury goes mass market Fortune
A $400 Coach bag? Shoppers think twice Fortune
Market segmentation
Social classes
Social groups