5 Things That Cost Wealthy People a Lot

1. Your Tip: Costco

The HNW people you’re talking to probably are Costco members.

Costco often has the cheapest gas because it draws a radius around the store, shops the gas prices everywhere else and prices its gas at or below the lowest priced competition.

Many wealthy people are fans of Costco. Some might even own the stock.

Mentioning it should create an aha moment.

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2. The Problem: Auto and Homeowners Insurance

Have the prospects (or their family office managers) shopped their personal insurance lately?

It’s unlikely that you sold the HNW prospects their homeowners insurance policy or their auto insurance. These are often policies people buy once. They keep paying the premiums years after year. The premiums tend to go up over time.

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2. Your Tip: Your Own Shopping Results

Start by going through this exercise yourself.

Shop your own property and casualty insurance premiums with your own P&C agent. The agent might be able to get you better or cheaper coverage.

Share your story with your wealthy friends. Ask if their premiums have been going up. Have they ever shopped around?

When you mention you do not sell personal P&C coverage, they will know you aren’t trolling for business.

They might be so impressed they will ask: “Tell me about the insurance you do handle.”

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3. The Problem: Health Insurance

Are the HNW prospects' ordinary individual health insurance or Medicare premiums going up?

This cost headache is similar to the personal P&C lines cost headache, but even wealthy people with family office managers might have noticed this one.

Here’s a personal story, especially for those of you who don’t sell Medicare plans.

I received a letter from the issuer of my Medicare Part D drug plan letting me know my monthly premium will go from $20 to $60! My insurance agent called before the letter arrived to schedule a date when we will shop around together.

Your wealthy friends know health care costs often jump. They may have a company plan they buy for their employees.

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3. Your Tip: Reports on What You, Friends or Relatives Have Found

Tell HNW prospects about the changes in your own premiums. Or, maybe you tell them about the changes in your parents’ or grandparents’ premiums.

The prospects will likely confirm they got the same bad news.

Tell them what action you took. They’ll probably want details.

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4. The Problem: Wine

The wine market is one of the most inefficient markets in the world. Many wealthy people know their liquor brands and the cost down to the penny, but they have no idea about wine prices.

They buy brands and assume they cannot do any better. Most of their friends don’t understand wine either.

They would really want to get drinkable, even tasty wine at a cheap price.

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4. Your Tip: The Name of a Great Store

Find the wine store around you that specializes in closeouts.

Every year brings a new vintage. The distributors need to find space in their warehouse, which they do by “blowing out” the leftovers from last year’s vintage at cheap prices.

It’s unlikely that this will be a chain store.

The independent shop gets good deals from its distributors, but the quantities are smaller.

Sit down with your California cabernet fan and open up a bottle of the one your guy at the store carries at a fraction of the price. If the prospect loves it, explain where to buy it.

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5. The Problem: Travel Sticker Shock

Your wealthy friends take plenty of vacations.

Everyone knows that airfares have been going up. It appears that some luxury hotels, reeling from two years of no business or holiday travelers, are trying to make it all back in one season by pushing prices through the roof.

The wealthy might stay in these places when traveling on their expense account, but they are very cheap with their own money.

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5. Your Tip: Cruises

Cruises are a great value because there is plenty of excess capacity at the moment.

Teach HNW prospects how to shop around for great deals.

The cruise companies are smart. The price is pretty stable, regardless of who sells you the ticket. Any additonal value comes from the extras the travel company or website provides.

This is often a sizable cabin credit for onboard spending, or a “free drinks package.”

Passengers can still sail on their favorite luxury cruise line, but they get money and perks put back into their own pockets.

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