0.1% Spending Rule

A framework for determining price sensitivity based on net worth, helping wealthy individuals understand what purchase amounts they should care about.

The 0.1% Rule Core Concept

• Calculate 0.1% of your net worth
• Spend freely on purchases below this threshold
• Example: $5M net worth = $500 threshold
• Below threshold: Don't stress about prices
• Above threshold: Consider more carefully

Wealth Level Progression

• Level 0-1 ($1M net worth)

  • 0.1% = $100 threshold
  • Care about grocery store prices
  • Price sensitive to small purchases

• Mid Levels ($5M+ net worth)

  • Don't stress about restaurant prices
  • Comfortable with vacation costs
  • Can fly first class without concern

• High Level ($100M+ net worth)

  • Most purchases become insignificant
  • Price insensitive to majority of expenses
  • Can buy luxury homes without much concern

Common Challenges

• Many wealthy people remain too price sensitive

  • Often rooted in financial trauma
  • Anchored to historical prices
  • Struggle to adjust spending habits with wealth

• Others become too price insensitive

  • Need better framework for spending decisions
  • Risk poor cash management
  • May need "money therapy" to find balance

Key Insight

• Schools don't teach how to adjust spending with wealth
• Need to consciously adapt spending habits as wealth grows
• Important to find balance between frugality and appropriate spending
• Consider therapy/coaching specifically for money mindset issues