Mass affluent and emerging affluent are marketing terms used to refer to the high end of the mass market. It is most commonly used by the financial services industry to refer to individuals with US$100,000 to US$1,000,000 of liquid financial assets, although the exact definition varies. It is also used by marketers of consumer products to refer to consumers with an annual household income of about US$75,000 and up. Mass affluent consumers are an important target market for sellers of affordable luxuries.
Difference between upper middle income and mass affluent
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 or income 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 such as stocks, bonds, cash, and mutual funds are counted. Fixed assets 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 $500,000 and $1.5 million (USD) in investable assets upon retirement with a net worth between $500,000 and $2.5 million (USD). They spend between $4,000 and $10,000 (USD) per month in retirement.
Mass affluent 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. Among family households, approximately thirty percent could be described as being mass affluent.
|Investment Real Estate||14%|
|Liquid Financial Assets||22%|
|Pension and Employee Retirement Plans||16%|
|Insurance and Annuities||9%|
|Privately Held Business||16%|
- Affluence in the United States
- The professional/managerial middle class
- Income in the United States
- Income quintiles
- Luxury good
- Status brand
- Wealth in the United States
- "Schwab: Courting the mass affluent". Retrieved 2006-08-12.
- Marc S. Freedman. (Feb. 2, 2009). "Mass appeal" http://www.financial-planning.com/fp_issues/2009_2/mass-appeal2660846-1.html
- Mass Affluent Investors Appear at Significant Risk Should Real Estate Bubble Burst, Spectrum Group
- "US Federal Reserve, Wealth in the US". Retrieved 2006-08-11.
- 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.
- 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
- MasterCard Analysis of Mass-Affluent Consumers Reveals Importance of Customization, PaymentsNews
- Attracting the mass-affluent, business.scotsman.com
- Chasing the Mass Affluent Customers
- Mass Affluence: Seven New Rules for Marketing to Today's Customer
- Luxury goes mass market, Fortune
- A $400 Coach bag? Shoppers think twice, Fortune