Rod asked the restaurant server if he could speak to their sommelier about a specific bottle of wine. The expert arrived, explained the vineyard it came from, an award it had won and the subtle flavor Rod could expect. Then she poured a small amount into his glass. He swirled it around, sniffed it and sipped a sample from this $300 bottle.
“This is fabulous,” Rod said, before echoing the subtle flavors the sommelier described. “We’ll take a bottle, thank you.”
Rod isn’t rich. However, he earns a high salary and he and his wife drive new Mercedes Benzes. They own an expensive home. But they spend most of what they make. In that sense, they match the profile of most expensive wine purchasers that Thomas Stanley described in his book, Stop Acting Rich. His research showed that most wealthy people don’t buy expensive wine. Most high-priced wine drinkers are more like Rod. Dr. Stanley described them as having, “Big hat, No cattle.”
But if, as Rod says, high-priced wine truly tastes better, why not splurge? A logical answer might be more nuanced than you think. Based on several studies, most people don’t prefer the taste of high-priced wine…unless they believe the wine is expensive. In other words, we’re easily tricked.
In 2017, researchers at the University of Bonn measured their subjects’ brain activities in an MRI machine while they gave them different wines. Researchers told the subjects how much each bottle cost. Not only did subjects say they preferred the higher priced wine, their brain scans revealed it. However, in blind taste tests that included more than 6000 subjects, people slightly preferred the lower-priced wine when they didn’t know how much the bottles cost.
Rod might correctly argue that these weren’t wine experts. But wine experts aren’t good at deciphering cheap from pricy either. They might even have troubles determining red from white. In 2001, some crafty researchers tested students who were studying wine at the Faculty of Oenology at the University of Bordeaux. They gave the testers white wine that they dyed red and the tasters believed they were drinking red wine. In fact, many of them used terminology to describe the wine as if it were red.
While some might say these experts weren’t seasoned, a 2008 study in The Journal of Wine Economics reveals professional judges aren’t much better. Roger Hodgson’s research team wanted to learn why a winning wine at one competition often failed to place at another competition. They assessed dozens of wine judges between 2005 and 2008, asking them to rate 30 wines. Three of the samples came from the same bottle. But 90 percent of the time, they judged the identical wines differently.
In 2018, research conducted by the University of Oxford demonstrated that wine tasters are affected by what kind of music is playing in the background. They assessed several professional wine tasters and found that, “years of wine tasting experience do not moderate the impact of music on wine evaluation.”
My favorite example, however, comes from Rudy Kurniawan. He was one of the world’s most famous wine collectors and dealers. As described in Maria Konnikova’s book, The Confidence Game, Kurniawan hosted numerous parties for the rich and famous. He generously served vintage wines that sold for thousands of dollars a bottle. He also sold wines to other people. Billionaire Bill Koch says he paid $2.1 million for 219 bottles of Kurniawan’s wine. The charismatic dealer also sold to plenty of the world’s most renowned wine experts. At one Acker Merrall & Condit auction he sold $24.7 million of wine, beating the previous sales record by $10 million.
But today he’s in prison, serving a ten-year term for fraud.
Kurniawan began by purchasing a few expensive vintage wines. He then scanned their labels and printed new ones on paper from Indonesia, which had an old, brown look. Then he imported special waxes and manipulated corks. He then filled those fake bottles with cheap, young wine blended with low-cost older wine. In other words, he pawned off crappy wines as if they were rare, prestigious classics. Investigators stormed his home after learning that one of the wines he sold (a particular vintage) never existed.
Dr. Stanley’s research found that most rich people don’t buy expensive wine. One reason is that they’re frugal. Some might even believe such wines don’t taste better. I’m not saying you should avoid expensive wine. Research suggests if you believe the wine costs more, your brain’s receptors will signal higher pleasure. But if you’re trying to save money by avoiding pricy wines, that’s a sober choice on more than one level.
Note: To protect his privacy, I changed Rod’s name
Andrew Hallam is a Digital Nomad. He’s the author of the bestseller Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas