To understand art collecting, a person has to understand the different levels of aesthetic and conceptual understanding in different audiences. I'll try to explain what's at work here for you.
General Public - lowest level - 1Vast majority of folks have no intention to ever be shopping for original art. Their taste in art is too shallow and undeveloped to be taking such a monumental step. The needs of such masses are mostly met via the chain store mass production. I'll call this layer general public.
Original Art Shopper- a way of distinction -2
A step up from a general persona is someone who wants to feel a little more special. They scour the original art market carefully, usually with a tape measure in hand to find just that perfect piece of inexpensive art that can satisfy their decorative sensibilities. This group has a potential to develop a few collectors but it hardly succeeds. People in this group will pay a little more for originals than what they would pay in a chain store. They frequently don't feel confident in their choices and need a lot of reinforcement from others to go through the purchase. Their primary motivation to buy is to feel a little different and distinguish themselves from the neighbor. These folks usually earn very good incomes but don't spend much on art. They feel art is too expensive and generally waste of money (never mind that Lexus in garage.. that's another story).
An art lover - sophisticated taste and understanding of art - 3
The step up from the original art shopper is an art lover. Most artists belong into this category. Many have swapped or purchased artwork from each other, and regularly visit art openings and events related to art. The art lover is not necessarily a collector since this one is just getting acquainted with the game, and developing its artistic taste. People in this category develop fine taste for art that can almost be passionate to the point where they will blow all of their discretionary income on art purchases. The art lover knows at least 20 artists by name, is familiar with their artistic direction and has a clear idea of what pieces would be in his/her collection someday. The problem with this group is that many art lovers don't earn high incomes to sustain the market. Therefore artists are mostly selling to the art shopper (refer to level 2.)
Art collector - blood and soul of the art profession - 4
Finally, we have an art collector. The art collector is a person who is not new to art buying. This person generally has consumed art for a period of time and both developed the taste for it, and also has sufficient income to actively collect. The collector is an elitist in the art world. This person knows how much art is worth and generally will never purchase something under $500. Artists who sell for less than this amount will rarely grab their attention. The reason to collect art can be as personal as there are art collectors. Some do it for the feeling of rush, a hunt, the feeling of acquiring something just because. Some art collectors are collecting as an investment. At the very high end of collecting, art becomes a numbers game and a way to diversify one's portfolio.
Art philanthropist - safeguards human creativity to survive generations - 5
On the very top of this art food chain, there is an art philanthropist. This is an art collector who buys art not only for the sake of the acquisition but also to support an artist's career. The art philanthropist will donate money to museums and other art organizations. One of the great examples of art philanthropy is John and Mary PappaJohn sculpture park that is a result of their tremendous art collection that was later gifted to our city. These art philanthropists are very rare, and they are not always extremely wealthy. The art philanthropy is the business of giving and educating, it is an active support system for development of ideas and artists.
So, there you have it, now you know what is an art collector. Maybe this gives you a little bit of insight why that painting that was just a red dot on a white canvas fetched millions? Was it an affluent art collector, or an art philanthropist, or perhaps a fund manager acquiring a fine example of the artist's career for their investor's portfolio. You can now make an educated guess...