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I heard on the news this morning about the record sales for Black Friday and Cyber Monday. The commentator then noted the sales were driven by the wealthy who saw their wealth grow as the result of the stock market and rising home prices.
I doubt the validity of those observations, but they make attractive news by reinforcing stereotypes.
First, it was not mostly the wealthy shopping, it was average Americans many of whom were willing to go into debt to “save money” on sales. An oxymoron if there ever was one. How many of these shoppers tell surveys they live paycheck to paycheck I wonder?
Second, the so-called wealthy are unlikely to use home equity or sell stocks to buy the latest hot Christmas toy so that relationship is not logical.
Every time I hear “news” like that I wonder if there is a purpose other than to reinforce division and I also wonder why 40% of Americans not investing in the stock market don’t give it a try. Yes, most could do it starting with very little money accumulated from a few months of prudent reduced spending – that seems possible for all but the poor.
We live in a society that increasingly encourages us to take on debt and to engage in other forms of self-defeating behavior, most notably the ability to gamble online about almost anything (e.g. whether a pitch will be a ball or a strike, whether a topic will be mentioned at a press conference). It also doesn’t help that our state governments legitimize lotteries that get large amounts of publicity. And then, when millions of people find themselves buried in debt we call them irresponsible and say they have no one to blame but themselves.
The state of NH where we lived used to declare fireworks illegal because they were dangerous. Then they realized the could increase revenue by allowing the sales and then taxing them (there is no income nor sales tax). I guess that made fireworks no longer dangerous.
NJ did the same, but with sales and income taxes. 😎
Yes and no. Your point is valid, but aren’t I responsible for getting buried in debt in any case.
RQ: I second that motion. Sowing division and class envy is a staple of the Main Stream Media.
I sent a note to my children regarding Black Friday sales… pointing out that apparently I have reached the true level of “wealth”…and that is contentment. I bought absolutely nothing on Black Friday, for the 3rd or 4th year in a row.
Christmas presents are a similar issue…My wife asked for new PJs and furry slippers with rubber soles. (She has been wearing an emerald and ruby ring that was “for Christmas, for the past month, Ha!) I asked for a fancy coffee blend from Fresh Market and an Amazon Gift card. I told my kids to get gift cards to “Word on Fire,” a Catholic Publisher whose books I love,
if they feel the need to get me something. (I tell them I do not need anything, but that never works.)
John Bogle wrote a great book entitled “Enough.” Like most of his works, it was spot on. I am thankful that I have been blessed in my life in many ways, including financially, and I believe I do have “Enough.”
Imagine if we were able to outlaw credit cards.
The economy would collapse.
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For the umpteenth time you have let us know that you consider a very large proportion of Americans to be irresponsible spendthrifts.
the truth is that a very large proportion of Americans do not understand finances and as a result do not know how to live within their means or plan their financial future.
Nick: I was a practicing CFP for over 30 years, and I taught financial and retirement planning to Financial Advisor professionals for the last 15 years before retiring in 2024. I will absolutely second your opinion. The level of financial ignorance among the American Population is far greater than most would imagine, and it is not limited to lower-income Americans. It isn’t so much what people don’t know, it is more so that what they think they know…is wrong. It begins in high school, and i am happy to report that help is on the horizon, since many states are now mandating an economics course for high school juniors and seniors, in order to graduate.
And you disagree with that? Doesn’t the data on retirement savings, consumer debt, spending priorities tend to support that although spendthrift may be tad too much, but certainly irresponsible and shortsighted with a tendency toward immediate gratification.
Since you like AI I thought I would ask an AI this question: Is there any data on spending during black Friday by wealth percentile?
Here’s the answer recap:
Yes, there’s quite a bit of data on Black Friday spending broken down by income level, though exact wealth percentile data is less common. Here’s what the research shows:
Spending by Income Group (2024-2025):
Those earning under $50,000 planned to spend around $829, while the $50,000-$99,000 group planned $1,548, the $100,000-$199,000 group $2,546, and those earning $200,000+ planned $3,887 Queue-it.
The “K-Shaped” Spending Pattern:
The data reveals a stark divide. High-income, high-wealth consumers generate the lion’s share of aggregate spending, supported by strong stock markets, while lower-income consumers tend to pull back Newsweek. This creates what economists call a “K-shaped economy” where higher earners benefit from stock market gains and continue spending freely, while lower earners increasingly live paycheck to paycheck.
Affluent households earning $200,000 and above dominated Black Friday and Cyber Monday sales, while shoppers earning $0-$100,000 peaked in spending between December 25-27 J.P. Morgan, possibly reflecting post-holiday returns or purchases.
Interestingly: Those earning $120,000 and over planned to spend the most at $869.52 per person, while those earning under $20,000 planned $447.86 Finder.
The overall picture shows that while total Black Friday spending hits record highs, it’s increasingly driven by upper-income households, with middle and lower-income shoppers becoming more budget-conscious and selective.
And once again the question must be asked…WHERE did this “AI” get its information, and WHO “programmed” the AI source? Add to that the laziness of so-called journalists today, and you get the reports upon which this AI is based, and conversely, the sources other journalists use for their sources.
BEWARE of quoting AI.
I think there is a misunderstanding of how AI works for certain things at least.
I find the AI scans the web when asking a question using a number of sites often 20 or more and then provides resources with links to their sources. It also says to check because there can be errors.
I have found it often provides opposing views on something and refers to other data sources that show different numbers and why.
I check sources a lot and most often review the original material. I use it to simplify what would otherwise be several Google searches.
I also frequently ask the identical question of ChatGPT, BARD and Grok. I find it a helpful research tool, nothing more.
Good effort. Will have no effect. Brick wall. Not worth it.
Yes, that is apparent in the replies below.
I’m not your ex-husband. You should read what both I and Mark posted very carefully.
Did you see the difference between total sales and spending per person based on survey responses.
The highest income spent the most per person, but that does not mean those 10% individuals spent the most in total on Black Friday or that they are the ones incurring the most debt from their spending. Look at my reply to Mark and please tell me what is wrong with what I said.
Also, do you take great stock in surveys asking people how they spend money?
Sorry, don’t buy it and yes I see the data. No doubt income determines how much an individual may spend, but it would take a heck of a lot of ten percenters to offset the aggregate of everyone else.
I stand by my original assumptions. The mass of average middle class Americans drive the total spending and many can’t actually afford to do so.
Supposedly 95% of purchases were financed, including buy now and pay later. One bank estimate 67% of credit purchases will not be paid off in 30 days.
I’d like to know how a person earning under $20,000 can spend $447.86 per person as implied in the data you posted, while they are also living paycheck to paycheck. Does that make sense? Connie and I spend $300 per person.
Except for the lowest income group, living paycheck to paycheck is in the eye of the beholder and determined by what is categorized as necessary spending.
High levels of living P to P do not compute when you look around at all the businesses providing unnecessary goods and services. They can’t be in business with just the highest income levels as customers.
Don’t forget the data related to who is buying – including income level- mostly comes from surveys.
This article, https://retailwire.com/discussion/wealthiest-us-households-spending/, contends 50% of US consumer spending is achieved by the top 10% of the wealth curve. That would suggest to me that Black Friday/Cyber Monday would follow the same pattern. If we push this out to the top 20%, I feel it would certainly bring the consumption percentage towards 65% at a minimum. That being the case, it doesn’t distract from the fact that there’s a good chance a high portion of the balance of spending is fueled by credit card debt that will be used unwisely, incurring interest charges. But I guess it’s a free country, people can spend unwisely…or not and we can believe the data…or not.
So, when Mark produces data that pokes some holes in your speculations, identifying his sources, you somehow know that his picture is inaccurate and so don’t “buy it.” The standard seems to be (where have we seen this before?), if it doesn’t align with your assumptions, it must be wrong. How about providing some evidence to support your position, not just asserting things. Otherwise, all of this discussion is useless. Surely you must agree that credit-card companies are not in business to fund unending shopping sprees by a population incapable of paying for what it buys. So how is it that spending continues at the clip it does, year after year after year?
Did you read my reply to Mark? Do you believe based on survey data that a person earning under $20,000 can spend $447 per person? Why would 95% of purchasers be financed?
The source Mark cites in his original post says that such persons “planned” to spend that amount. It is easy to assume their plans might run into reality and the spending not be accomplished. You are the one claiming 95% of sales are financed, but it is not obvious what that implies in terms of how the data is to be read. While that figure could well be true, many may use a credit card, as I do, for almost everything, paying off the monthly balances, and collecting the various rewards. To dig deeper we would need a source to identify the percentage of accounts that are “not” routinely paid off to avoid interest charges to get a better sense of the impact of the spending habits of the nonaffluent. Mark’s latest reply to your “I don’t buy it” comment uncovers more data to poke additional holes in your original contentions. His assessment that the top 20% are driving the bulk of the spending economy appears credible to me. That’s not to say the spending of those in the lower 80% is not needed; the whole system would not work without it.
Claiming? That comes from banks and credit card companies. I don’t makeup anything. And when i use an AI searches i verify with other sources whenever possible.
It’s claiming when you don’t provide documentation.
That’s rather insulting, but it is what it is.
Why is it insulting to want to know where you’re getting your figures from? I don’t understand that at all.
if you don’t get why saying I’m claiming something implying it’s not true or I don’t know what I’m talking about seems rather insulting to me, but no matter.
Did you notice the red down arrows when I explained where it came from and when I said I was insulted? Makes a lot of sense, right?
In discussions between parties who are basically strangers, if the conversation is not simply an agreeable shooting of the “breeze” among friends and therefore of no consequence (not the purpose of this site), it is customary to furnish some basic references to support claims that are not necessarily common knowledge to everyone involved (see, e.g., the data uncovered by Mark in his reply earlier, listing his sources). Then there is a shared basis for reasoned debate. So, if I find various of your statements to be questionable, from my perspective, or assertions that strike me as unfounded, I’m just asking you to provide some independent documentation in support of your arguments that I can confirm for myself. I’d expect you to want the same from me. It seems quite an uncharitable leap to characterize my request as “rather insulting.” Why ever should I, or anyone else, accept assertions you make at face value in a forum like this without raising questions? Such a compliant posture would certainly dumb down the tenor of the content found here.
So, when AI agrees with your opinion you tout it as supportive research, but when it disagrees you say you don’t buy it.
If you read it closely it does not disagree with what I said. Besides AI used here is a tool to aggregate various sources it’s not giving an opinion.
The middle class people out shopping is how the companies in the stock market make a profit. Their former money is now in our brokerage accounts.
There are many financial educators telling them to save and invest, and a number of people do wise up. However, most do not.
Exactly
At Thanksgiving I said to my wife we’ll see how bad people really think the economy and inflation is when the Black Friday sales figures come in as people vote with their wallets.
The sales were up from last year even when accounting for inflation. 🤔
Where’s the documentation to support your first assertion? Regarding the second, economists routinely refer to the “wealth effect” of rising real estate and equity holdings, which give those who are well off “permission” to liberally spend their cash. They have no need to liquidate stocks or sell property to engage in such behavior. Surely this is the journalist’s reasonable assumption.
do you think it was the wealthy who drove those purchases? Is that what you mean?
Well, we’d have to define what “wealthy” means. But you made an assertion that business radio (I’m thinking of Marketplace, for
example) disputes. That is, they refer to those with cash on hand, and plenty of equity holdings, driving much of the spending. I think we’re talking about something like the upper ten percent.
The household income at the top 10% starts at about six figures. I find it hard to believe 10% of the population drives all that spending. Generally speaking wealthy people are not that easily persuaded to spend money- that’s why they are wealthy. 🤑
A quick query to AI suggests that the top ten percent possess between 35% and 60% of total income. I think it’s rather fanciful to imagine all the wealthy remaining so by not spending, not to mention counterintuitive.
Didn’t say they don’t spend, but they don’t make up the majority of the aggregate Black Friday spending.
Interestingly, at that level income is about 30% of total consistent with global data and at those levels 50-60% of their income is not cash income, but stock awards of one kind or another.