While everyone’s financial situation is different, including actual earnings and net worth, even wealthy individuals might not be able to afford certain luxuries in the coming years. Those who can afford these things might opt against paying for them, given their rising costs.
From luxury real estate to space tourism, here are some of the top things even high-income — or high net worth — individuals might consider expensive or be unable to afford in the next five or so years.
Real Estate
A decade ago, the average cost of a home in the United States was $369,400. Just 5 years ago, that number had increased to $384,600. Today, the typical cost of a home is $492,300, according to the Federal Reserve Bank of St. Louis. Given the trend of rising home prices, even wealthy individuals might start to see certain areas as being too expensive in the coming years.
“This includes properties such as houses, apartments and commercial buildings,” said Keith Sant, an investment advisor and the founder and CEO of Sell Mobile Home Park. “With the increasing population and limited land availability, real estate prices are expected to rise in major cities around the world.”
But it’s not just these types of properties that are becoming expensive. Luxury real estate is another big one.
“Luxury real estate in top-tier cities is going to stay on the pricey side, even for the well-off. The reason is pretty straightforward: They aren’t making more land, especially in sought-after areas like San Francisco or New York,” said Taylor Kovar, CFP, founder and CEO at 11 Financial. “Plus, with more people aiming for that prime location, the basic law of supply and demand kicks in.”
The cost of maintaining these homes is also increasing. And when you add on property insurance, maintenance and taxes, real estate is starting to become more of an expensive luxury.
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Certain High-End Electronics
Some high-end electronics brands are also likely to become more expensive in the coming years. A top contender here is Apple and its iPhones and MacBooks.
“Apple’s position as a leading tech brand means its products remain in demand, but the escalating costs could challenge even the most loyal customers’ ability to upgrade regularly,” said Larry Zhong, a personal finance expert and founder of YieldAlley.
Zhong cited a friend of his who opted against upgrading their iPhone to the newest model for the first time simply because of the rising prices. This, Zhong pointed out, reflects a broader concern among even tech enthusiasts about affordability — now and in the near future.
Luxury Electric Vehicles
While some electric vehicles, like the Chevrolet Bolt EV, are fairly reasonably priced — and affordable to maintain — higher-end brands are becoming increasingly expensive.
“Exclusive electric vehicles (EVs), particularly from luxury brands, like Tesla’s Roadster or Lucid’s Dream Edition, are likely to remain a hefty expense,” said Kovar. “As the world shifts towards more sustainable options, the demand for high-end EVs is skyrocketing. Considering the rapid advancements in EV tech and the growing emphasis on eco-friendly luxury, prices are expected to remain high.”
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Health Insurance
The cost of healthcare and, by proxy, health insurance both continue to rise. While there are affordable marketplace plans out there, they’re not usually available to those who earn more than a certain amount each year. This, of course, excludes affluent individuals and makes healthcare costs more expensive with every passing year.
“In the next few years, the cost of health insurance will become unaffordable,” said Kevin Thompson CFP, RICP, founder and CEO of 9i Capital Group LLC. “As a business owner, the rising cost of health insurance for me and my family has gone up almost 70% since 2016. What was $780 a month for a family of three in 2016 is now $1,300 a month for the same family. I do understand we are older now; however, insurance costs continue to rise.”
Space Tourism
Space travel continues to appeal to the highest net worth individuals in society, but it’s also costly and expected to remain so.
“With companies like SpaceX and Blue Origin pushing the boundaries of commercial space travel, the dream of orbiting Earth or visiting the moon is becoming a reality for some,” said Kovar. “However, the cost of such trips, ranging from hundreds of thousands to millions of dollars, places them firmly in the realm of ultra-luxury experiences.”
