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 by Alex Hormozi

"Never be impressed by money"

– Alex Hormozi

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

– Alex Hormozi

"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

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

– Alex Hormozi

"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

Full Transcript

talk about what it's like to live as the ultra wealthy and so hi my name is alex uh owner of allen prestige labs jim launch a number of other portfolio companies who did 120 plus million in the last uh four years and growing and i've learned a lot of lessons and i want to share some of those with you and so one of the things is kind of understanding how the ultra wealthy live and i want to talk about some stuff that no one no one i feel like no one talks about and it's something my dad used to tell me when i was growing up he said never be impressed by money and he used to say that so many times when i was growing up and i like i didn't really get it as much but he was so big on it i was like hey look at that guy he's so rich and he was just like don't be impressed by money and it's it's really kind of stuck with me and so what i want to do is kind of show you some transparent things so that you can hopefully not be impressed by money so it's really easy to look ultra wealthy all right so i'm going to show you some of the things that you see on instagram um and some of the things that you know you see around and i'm going to break it down for you money-wise so that hopefully it stops impressing you all right so we're going to talk about private jets we're going to talk about you know what i'll do and at the end i'll tell you which one i think is worth it all right so yeah private jets let's say you've got an exotic car okay let's say uh what else you probably want a penthouse right want a penthouse what what else do we have on our on our dreams list all right we got penthouse let's say you want really nice clothes right you want like really expensive you know expensive clothes all right and then let's say fancy restaurants all right sweet let's let's walk through it so this comes down to like if you're like man i really you know my dream lifestyle and i think this is a useful exercise for anyone to go through if you haven't already to find this stuff but let's say that you travel six times a year so every two months all right you go somewhere there and back average travel at least in the us is gonna be two hours so if you two hour flight six times a year all right it's there and back with just four hours four hours of flying six times a year total just 24 hours all right that's 24 hours the reason i'm defining this by hours is because private jets uh get price per hour and if you're curious how much it costs if you go through a service you can usually get it for about four thousand dollars an hour okay so people don't know this that's how much it costs all right so that's about a hundred thousand dollars a year wait flying private 100 000 a year i thought it was you had to be a super duper millionaire no not really um it's 100 grand a year now do i think that's really expensive for flights when the alternative to that is for for for six flights could be uh you know maybe you know if you did first class you'd be maybe spending six grand you know at worst if you did it last minute you'd spend like 10 grand so 10 times the price for an alternative well that's the alternative price all right consider it the next one exotic cars all right so i'll give you a range here but you can pretty much get a really nice car for a thousand dollars a month like a very very very nice car if you want like a rolls-royce you know one of the most expensive cars anywhere and you're releasing it you would spend you know 4 500 months you know 4 500 bucks a month all right so that's 4 000 a month which is about 50 000 a year right all right next one penthouse so if you this kind of depends on like unless you're in a major city but if you're not in a major city which is what most of the the ig influencers will try and influence you with um you can get a really nice place for five thousand dollars a month in just about every market that's not new york you know la you know it's like maybe miami and sometimes even the nice place my name is like 10 grand a month right but you know what let's let's level up let's let's live a little bit so we'll say 10 000 a month all right really really really nice place all right so that's 120k a year all right and then finally expensive clothes believe it or not are some of the cheapest things that are out there because i mean you buy your gucci belt which is 500 bucks you buy your your gucci shoes which are another 600 bucks and then you know you want to buy a handful 100 t-shirts okay so i mean you're spending what like 3 000 a year you know on clothes which is not nearly as much as you'd think right and then fancy restaurants let's say you go out to date night once a week and you drop 400 on a really nice dinner really really nice dinner i'm trying we're living it up here right so it's 600 bucks a month times 12. i don't want to do the math there let's say it's 20k all right so this lifestyle and this is the this is the i mean we're talking the ultra ultra ultra wealthy lifestyle this isn't just like um i'm a millionaire this is like i'm a super duper wealthy person right i mean look at all this stuff we've got we've got lamborghinis pen houses we're only wearing uh you know designer clothes we've we travel with private jets we go to fancy restaurants we do all of that stuff how much does it actually cost right it costs 100 grand 150 270 about 300 grand a year all right 300 grand a year so that's that's it that's the dream number and i have so many people were like i need to make a zillion dollars right well after taxes you need to make 300 grand so you're looking at 500 ish 1000 a year 550 is what you need to make and that is a top that's top one percent but this is so stupid um as someone who literally has done all of these things uh let me let me give you some insight into some of the stuff that i've discovered one flying private is actually really nice but it's it's wildly expensive and i still feel guilty for it exotic car definitely not worth it i have two and like i they're so not worth it at all like seriously not worth it at all the incremental enjoyment that i get compared to driving like a an old prius or a pickup truck is is inconsequential if anything 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 if you guys know him and he was like dude you're so cheap he's like just go you know like just get the car because my wife and i split a car until not that long ago and he was like dude you make so much money just go get the darn car so i was like all right i won't be a cheap ass and so i got the car and now i totally regret it but you know it is what it is so hopefully you can learn from that mistake that being said what i'm gonna do is also i'll walk through percentage of income like for perspective if i can do this all of this stuff off of one week's income it what do you do the next week right and so that's why increasing your income is so important because all of this stuff's actually really easy to achieve um and so that's why i don't think you should be like taking huge advice from people because get you know getting a business to do you know 80 000 a month and you know taking home 40 pretty much just affords you this lifestyle that's it like now mind you knock out private jet flying and you know make a reasonable penthouse instead of a ten thousand dollar a month penthouse which is is a really nice place right then just like that we took out half the cost of this lifestyle so now we're down to 150 000 right it's like okay well then i could still look like a super and i still have my exotic car still have expensive clothes still eat at fancy restaurants and that's on 150 grand a year right and so my my biggest takeaways here are or that i that i hope people take away is like the people who have the most money honestly all of this stuff is a very very small percentage of their income and so don't let this be the reason that you listen to someone because there are people who live like this and that's 100 of their income and those are people you should not listen to for advice on money right like in my opinion the only reason you should ever get to this part is is when you're you know it's you're living this is this is less than 10 of what you make that's my that's my opinion less than ten percent of what you make you save ninety percent all right and so overall the that that's my that's my big message is that i have i have done all of these things i am not currently wearing fancy clothes i'm wearing jean shorts and a t-shirt that my aunt gave me for christmas fancy restaurants this is something that i do with layla and i actually feel like i get a good return on our date night but not on the fact that it's a fancy restaurant i enjoy applebee's cheesy factory bj's and chili's and chipotle honestly just as much as i enjoy the fancy restaurant i think the value of the fancy restaurant is that you dress up more so than the actual food and experience and i've had the 500 steaks and all that stuff and honestly like a really good double meat chipotle bowl hard to beat fajitas and chips at chili's hard to beat cheesecake factory cheesecake hard to beat pizookia bjs no one has anything on their desserts right and so what's interesting is that having now done these exotic things especially like cars and experiences you'd be surprised that a lot of times i think the best quality having now tasted all of these things the best quality comes from the stuff that tends to be the biggest mass market because they do the most product testing and so recently i rented a i think i rented a chevy suburban we were traveling somewhere and the interface was so much easier to deal with than my bentley's interface it was so simple i plugged my phone in it worked automatically it was just like it was such a dream compared to this thing that's a 350 000 car because they only make you know a handful of them so they don't have nearly the product testing and they put all these gizmos in it that are impossible to figure out how to use and so don't don't be don't be persuaded by this stuff all right try this is just my two cents you can take whatever you want from it but this has just been my experience with all of these things restaurants i like that the the cheaper ones better expensive clothes i clothes i get nothing from so personally i think i have some shirts that are awesome but the mass majority of them are less than 30 the penthouse thing i don't think you should spend a lot of money on where you live personally i think if you look at your primary residence as an investment if you can and live in something that would be an investment income uh type property then i think it makes sense like the places that really make sense is like if you can live in a duplex and run out the other spot you live for free and you're gonna pre you're appreciating the assets you have that stuff makes a lot of sense to me and you have to pick figure out what your trade-offs are but if this is the absolute ultra wealthy you know uh a lifestyle do you know what ultra ultra wealthy is because i'll tell you what it is right now it's 30 million or more 30 million to a billion in investable assets well if you have 30 million dollars in investable assets that's the bottom range of alternate high net worth then if you're gaining even 10 a year you're making 3 million a year right on your money just your money making money and so just your passive income is 10 times greater than what it costs to live this way and so in that instance it kind of makes sense right or it's like if you want to do it do it but i'll tell you this of the people that i know were ultra wealthy not kind of wealthy not high net worth which is 5 to 30 or just um or millionaire right which is one to five the people who have that stuff uh who are the highest that i know almost all of them i've had these conversations with them have come to the same conclusion which is almost none of this stuff is worth it and so you get there you try the fruit and you realize this is just not worth it so if i can hopefully save somebody a couple hundred grand who does get there then try and avoid this stuff that's that's my two cents so that's what that's what i have for you if you've if you never experienced this stuff or don't know how much it cost this is how much this stuff costs in the real world i do think you should spend less than if you can uh less than 10 of what you make because if you can spend less than 10 what you make then it means that honestly within two to five years you can live completely free of anything because your wealth is a ratio between your expenses and your income it is not a number that's the thing everyone messes up it's an expense it's a ratio of income to expenses that is what wealth is and so if your income to expense ratio is ten to one you are very wealthy so whether you live on thirty thousand dollars a year and you make three hundred thousand a year that is a very wealthy person they're extremely extremely well set up they have no stress because they have so much more than they need and so that's what i think the key comes down to is having so much more than you need and the happiness equation if you guys don't know what it actually is it's not uh when i get x i will be happy that's uh that's not the right one the right one is haves over once and if you can get your wants to zero then it doesn't matter what you have on top equals infinity and so as much as everyone likes to chase the the top number to compensate for the fact that they want these things if you can simply decrease the desire you will increase the abundance in your life and by extension your your income to expense ratio which is what will build your wealth and give you the freedom you want so anyways this has been a little experience of mine that i hope you find valuable and hopefully you don't have to make some of these lovely mistakes that i have keeping awesome lots of love i'll catch you guys soon bye