Today we look at the "Rich Spending", and why the Economy depends on it.

If you ever needed proof that the U.S. economy is leaning more and more on its wealthiest citizens, look no further than the latest numbers: The top 10% of earners are responsible for nearly half of all consumer spending. That’s right—just 10% of people are driving almost 50% of the money flowing through the economy. And while this has always been true to some extent, the gap has never been this wide.

So, what does this mean for the economy as a whole? It’s a double-edged sword. On one hand, the spending power of the wealthy has kept businesses afloat and GDP growing, even as inflation has squeezed middle and lower-income families. On the other, it makes the entire system vulnerable—if the rich pull back, the whole economy could feel the shockwaves.

The numbers tell an eye-opening story. Between 2023 and 2024, the highest earners increased their spending by 12%, while middle- and working-class families actually spent less. For the wealthiest Americans, life hasn’t just continued as usual—it’s gotten even better. Stocks and home values have soared, padding their bank accounts and giving them more confidence to spend big.

For example, take Vivek and Purva Trivedi, a couple earning over $350,000 a year. They’ve not only maintained their lifestyle but expanded their investments, snapping up multiple rental properties. Even with rising grocery bills, they refuse to compromise on buying organic, and they’re planning big trips abroad. Then there’s Tom and Kristi Shoaf, who earn around $500,000 a year and have enough wealth to buy a new home in cash when they retire. They even give their adult children annual gifts of $19,000 each, just because they can.

Compare that to the average American family, struggling to keep up with rising costs on essentials like food, gas, and rent. For many, discretionary spending—on vacations, dining out, or luxury items—has been put on hold indefinitely.

When nearly half of consumer spending is controlled by a relatively small group, any disruption to their wealth—such as a stock market crash or a real estate downturn—could have a massive impact on the entire economy. We’ve already seen early warning signs: Consumer sentiment is starting to slip, even among the wealthiest, due to rising geopolitical tensions and potential tariff threats.

Luxury spending has been one of the biggest economic drivers lately. High-end travel is booming, with airlines like Delta seeing strong growth in premium ticket sales. Even Royal Caribbean is launching new high-end river cruises to cater to wealthier customers. Meanwhile, stores like Kohl’s, Family Dollar, and Big Lots—where middle-class and lower-income Americans shop—are struggling or even closing their doors.

This disparity means that while the economy might look strong on the surface, it’s resting on an unstable foundation. If the wealthy tighten their purse strings, the fallout could be severe, impacting everything from retail sales to job creation.

This economic divide is fueled by the stark difference in wealth accumulation. Since 2019, the net worth of the top 20% has surged by $35 trillion, while the bottom 80% has seen a total increase of just $14 trillion. Even though the percentage gains are similar, the actual dollar amounts are worlds apart. Wealthy Americans who own stocks and real estate have benefited massively, while those who rely solely on wages have struggled to keep up with inflation.

In practical terms, this means that while some people are worried about whether they can afford their rent next month, others are debating whether now is the right time to buy a new luxury car or second home.

If this trend continues, economic inequality will only grow, and the economy will become even more dependent on the top 10%. But that’s not sustainable. If we want long-term stability, there needs to be a shift—whether it’s in wage growth, taxation policies, or investments in the middle class—to ensure that economic power is more evenly distributed.

For now, though, as long as the rich keep swiping their credit cards, the economy will keep humming along. The real question is: What happens when they stop?