Did you read this entry on Dave Ramsey's blog?

[zoobie]

But the assumption it seems that you are making is that rich parents don't have children who work and therefore have more free time to volunteer. Anectdotal, but all my kids have held jobs from around age 14 - anywhere from 10-20 hours per week in the school year to full time in the summer, they also had a lot of responsibility around our 100+ acres. In addition, they did a lot of volunteer work. And, that seems to hold true for all the "rich" people I know. My kids buy their own cars, purchase their own gas...Many "rich" people have their kids work because they know the correlation between their own work level and their success.

 

I wonder if that statement was a statistic that took into account the age of all the kids - rich or poor. Perhaps they were talking about kids who were not "working" age. I know many who have their kids volunteer from a very early age.

I haven't heard anyone call rich people or their kids lazy. I grew up in a lower income bracket than I'm in now. My "rich" friends had job choices like my kids likely will have: file clerks in law offices, nice babysitting jobs, jobs you get with "connections" from your parents and their friends. Or, even if you did have a retail job or fast food job, those jobs were high school kid jobs. You weren't fighting adults for the crap jobs. My friends' moms drove them to their jobs or let them borrow a family car to get there. If there isn't public transport and even the parents don't have reliable transportation... Same with volunteering. A family struggling to make ends meet may not have the resources to get their kids to volunteer positions, or they may not have the luxury of sparing those 10 hours from a paid position. "Rich" kids can save their money for cars and college. "Poor" kids are using that money to help support their families or their own basic needs.

 

It's not a knock against rich people. It's just different. My mom got in a car accident when I was in elementary school and totaled her car. It was a POS beater (not Person of Size ;) ). The insurance payout was not enough to buy a replacement without tons of searching. She was working a full time job and a part time job as a legal secretary. She tried to use public transportation, but we didn't live near a train station and the buses were unreliable. She lost the part time job first because she was late on a Saturday when the bus never ran on time and had to leave early on Wednesday before the bus stopped running frequently (not safe to stand and wait late at night in that area). That part time job was necessary to make ends meet. She didn't have time to look for cars while she was working, then she had to find another job... It was almost a year before she got another car, and she had to borrow money from my grandmother to do it.

 

My family was in a car accident that totaled one of our cars. It was inconvenient because I had to drive my husband to the rental car place. Then we got stuck with a tiny Corolla. Then we had to car shop (online research!) and had excellent credit and cash to add to the insurance payout. My husband missed some work to test drive, but he sets his schedule for the most part and that didn't equal a loss of pay. The car accident was stressful for us, and my kids had nightmares, and I sure wouldn't want to repeat it. But it didn't completely screw our lives up. And yes, we went to law school and made different choices from my mom. We worked hard to get where we are. But it's just not the same ball game.

[Miss Marple]

Interesting. I've flown first class and in a private plane. My best friend has a small jet.

 

Oh and btw, I am not rich.

 

I dunno, Scarlett, sounds like you're hobnobbing with the rich and famous :)

 

I have a pretty cool tractor, though, with a front-end loader and all.  It's pretty snazzy :)  And I can drive it, too!  Which ability has come in quite handy of late since my boys are all leaving home :/

[msjones]

Dave Ramsey is condescending and rude and sarcastic and calls people stupid.  Blech.

 

He also gives a lot of good advice.

 

I know this isn't  the popular or PC thing to say, but I do believe that many (no, not all) people are in their crummy financial situations because of their own crummy financial decision-making.  

 

Many people do believe they are entitled to nice things and go into debt to get them rather than save for them or go without.  They often do this for years and then throw up their hands and complain about it.  They never change their habits and so their descent into poverty continues.  

 

These are the people Dave Ramsey goes after on his show.  And he has decent and somewhat compassionate, encouraging advice for them if you can get past his obnoxious tone.

 

 

[Scarlett]

I dunno, Scarlett, sounds like you're hobnobbing with the rich and famous :)

 

I have a pretty cool tractor, though, with a front-end loader and all.  It's pretty snazzy :)  And I can drive it, too!  Which ability has come in quite handy of late since my boys are all leaving home :/

 

 

Well she does have a million dollar vacation home.  So yeah, I'd say she is rich.  Famous, not so much.  :)

 

And now I know you are rich, because I know how much those tractors cost.  ;)

[sunnyday]

I don't mean any offense here, but you would not be considered at all rich among most of the people we know. Alessandra's list would be pretty accurate.

 

Wut? I wonder if it's regional, or if the rich people you know are in a certain career field, or if you only tag the conspicuous consumers in your circle as "rich" and overlook the people with less outrageous lifestyles?

 

The people I know with incomes around $300-500k, net worth in the seven figures, are mostly quiet about it. They drive modest cars and live modest lifestyles. Chickens in the back yard, a household of cars averaging 100k miles, shopping the discount stores and the coupon circulars and the secondhand stores. But they are undeniably rich, and hopefully, they know it.

 

The Millionaire Next Door is a great book that presents far more relevant statistics. I'd rather hear about how many wealthy people *don't* wear $5,000 watches than about how many poor people set their alarms insanely early.

[Scarlett]

Dave Ramsey is condescending and rude and sarcastic and calls people stupid.  Blech.

 

He also gives a lot of good advice.

 

I know this isn't  the popular or PC thing to say, but I do believe that many (no, not all) people are in their crummy financial situations because of their own crummy financial decision-making.  

 

Many people do believe they are entitled to nice things and go into debt to get them rather than save for them or go without.  They often do this for years and then throw up their hands and complain about it.  They never change their habits and so their descent into poverty continues.  

 

These are the people Dave Ramsey goes after on his show.  And he has decent and somewhat compassionate, encouraging advice for them if you can get past his obnoxious tone.

 

 

I will agree that he can be  compassionate and encouraging.....

 

I also agree that some people....maybe many....are in bad situations due to their own bad choices.  My dh....who is a wonderful man with many wonderful qualities....has made some horrible financial decisions. (before he met me!)  And my finances were severly affected by my divorce which was NOT my plan/fault/wish etc....but I guess you could say I made a bad decision in choosing my first husband because he turned out to be a big fat cheater....yeah, life is full of stuff like that.  Things aren't usually black or white even though we would like for them to be.

[Catwoman]

Wut? I wonder if it's regional, or if the rich people you know are in a certain career field, or if you only tag the conspicuous consumers in your circle as "rich" and overlook the people with less outrageous lifestyles?

 

The people I know with incomes around $300-500k, net worth in the seven figures, are mostly quiet about it. They drive modest cars and live modest lifestyles. Chickens in the back yard, a household of cars averaging 100k miles, shopping the discount stores and the coupon circulars and the secondhand stores. But they are undeniably rich, and hopefully, they know it.

 

The Millionaire Next Door is a great book that presents far more relevant statistics. I'd rather hear about how many wealthy people *don't* wear $5,000 watches than about how many poor people set their alarms insanely early.

I agree with you that it may be regional.

 

You wouldn't even be allowed to have chickens in your backyard in our area, and I know very few people who drive modest, high mileage cars, or who don't have things like expensive watches (to use your example.)

 

I also think your definition of an "outrageous lifestyle" is far different from mine. ;)

[sunnyday]

I agree with you that it may be regional.

 

You wouldn't even be allowed to have chickens in your backyard in our area, and I know very few people who drive modest, high mileage cars, or who don't have things like expensive watches (to use your example.)

 

I also think your definition of an "outrageous lifestyle" is far different from mine. ;)

 

Pedicures, limousines, and $5,000 watches are definitely outrageous to me! :D I guess that's living in the wild west for you, and hob-nobbing mostly with doctors and software execs. :lol:

[Scarlett]

I agree with you that it may be regional.

 

You wouldn't even be allowed to have chickens in your backyard in our area, and I know very few people who drive modest, high mileage cars, or who don't have things like expensive watches (to use your example.)

 

I also think your definition of an "outrageous lifestyle" is far different from mine. ;)

 

 

My friend and her husband live well below their means.  They don't have chickens though.  She has a few expensive pieces of jewelry...and a few expenses purses.  But she still buys cheap wine and yaks all night with me.  Her dh has a few expensive cars....she drives a SUV....I think it is a Lexus.  She has a rare incurable cancer and she spends a lot on treatment and supplements and good food...that is when she isn't eating nachos and drinking cheap wine with her family or friends.  She also spends a lot on vacations with her family. 

 

Seriously Cat you must be like those people on selling NYC.  The circles you describe sound very high society.  My friend, on the other hand is so NOT high society even though she is very wealthy. 

[Miss Marple]

I have chickens!!! Well, I did until a year or so ago when the raccoons invaded the coop. I miss my chickens, and more particularly those large fresh brown eggs. But I'm not rich anymore :)

[msjones]

 

 

Seriously Cat you must be like those people on selling NYC.  The circles you describe sound very high society.  My friend, on the other hand is so NOT high society even though she is very wealthy. 

Around here, rich people are mostly inconspicuous.  Not entirely, but it is rare to see valuable jewelry and watches and incredible outfits or luxury cars.  It's not PC to come across as rich in the PNW.

 

The rich people I know drive nice (but not flashy) cars, have the homes with views, travel, snow ski, may have boats, shop at the really nice grocery stores, and do a lot of charity work.   

[Joanne]

Dave Ramsey is condescending and rude and sarcastic and calls people stupid.  Blech.

 

He also gives a lot of good advice.

 

I know this isn't  the popular or PC thing to say, but I do believe that many (no, not all) people are in their crummy financial situations because of their own crummy financial decision-making.  

 

Many people do believe they are entitled to nice things and go into debt to get them rather than save for them or go without.  They often do this for years and then throw up their hands and complain about it.  They never change their habits and so their descent into poverty continues.  

 

These are the people Dave Ramsey goes after on his show.  And he has decent and somewhat compassionate, encouraging advice for them if you can get past his obnoxious tone.

 

I've seen him be surpisingly kind and compassionate.

 

I think a lot of his advice is good. I just don't think it's a match for many stuck in the low income cycle.

 

And I don't agree with him "across the board" in terms of his formulaic steps/program.

 

I love it when people follow through and achieve the freedom of being debt free. I hope to join that group some day.

[SKL]

I do happen to have many friends who are in the top earning percentiles, including the top 1%.  And when I say many, I'm probably talking over 100 whom I consider good friends or trusted business associates, without actually taking the time to count them.  I completely fail to see the correlation between wealth and foolish extravagance.  The only person I know who was big on manicures was my ex-secretary who was not and never had been anywhere close to "rich."  (Pedicures, I wouldn't know, since I don't examine people's toes nor hang out in spas.)

 

The high-income people I know spend their time working and taking care of their kids and modest homes.  Just like most everyday people.  They are very down-to-earth.  Their neighbors wouldn't know their financial situation other than to surmise it from the fact that one or both spouses is a doctor or well-known lawyer.  They wear traditional clothes and nothing about them catches your eye if you don't know them.  Same is true of me.  I have absolutely nothing to gain by taking on the appearance of a shallow, extravagant "rich person."  You can usually find me wearing old jeans and t-shirts, no make-up, driving my 12yo sedan, and overdue for my $12 haircut.  My kids also don't go about in fancy getups.  How ridiculous.

 

Methinks some people believe everything they see on TV.  Very sad.

[msjones]

I've seen him be surpisingly kind and compassionate.

 

I think a lot of his advice is good. I just don't think it's a match for many stuck in the low income cycle.

 

And I don't agree with him "across the board" in terms of his formulaic steps/program.

 

I love it when people follow through and achieve the freedom of being debt free. I hope to join that group some day.

 

From what you've shared in your posts here, I'd say you're already on that road.  

[Joker]

This has been an interesting thread.

 

I think how the extremely wealthy behave must be regional. The very wealthy I have known personally do not broadcast it. You know them because of who they are and what they do (oil business and politicians), but they don't flaunt it other than by their giving. The people I've seen flaunt it like described in this thread are actually in debt but their income covers their extravagance - at least for a while.

[MyThreeSons]

 I will not apologize for America.

 

I don't want you -- or anyone else -- to apologize for America.

 

I was simply taking exception to the overly simplified statement you made: In America, it is possible to change one's situation in life.

 

While that is often a wonderful benefit of being American, it isn't as cut and dried as you made it sound. I'm not bitter or angry about my situation in life. I'm not jealous. I do, however, get frustrated with people who make blanket statements like yours. 

 

[Joanne]

This has been an interesting thread.

 

I think how the extremely wealthy behave must be regional. The very wealthy I have known personally do not broadcast it. You know them because of who they are and what they do (oil business and politicians), but they don't flaunt it other than by their giving. The people I've seen flaunt it like described in this thread are actually in debt but their income covers their extravagance - at least for a while.

 

The overwhelming majority of the wealthy I've known have been modest and humble and "quiet" about it, too. They are not defined by being wealthy at all.

[Scarlett]

Idk. You can tell who's wealthy in my city by their postcode. Doesn't matter if they are classy rich or trashy rich, they either inherited or earned enough to take out a huge mortgage to buy in their area.

 

Our city is very segregated by wealth.

 

 

To me that isn't rich. 

[SKL]

Idk. You can tell who's wealthy in my city by their postcode. Doesn't matter if they are classy rich or trashy rich, they either inherited or earned enough to take out a huge mortgage to buy in their area.

 

Our city is very segregated by wealth.

 

How would you know if a particular home in a modest neighborhood was inhabited by a wealthy person?

[SKL]

Because homes in particular postcodes sell for over 2 million ? If you can afford to buy a 2 million buck house, you're wealthy.

 

But what about people who can afford it but choose not to?  Would you know if they were living on your street?

[Catwoman]

I do happen to have many friends who are in the top earning percentiles, including the top 1%. And when I say many, I'm probably talking over 100 whom I consider good friends or trusted business associates, without actually taking the time to count them. I completely fail to see the correlation between wealth and foolish extravagance. The only person I know who was big on manicures was my ex-secretary who was not and never had been anywhere close to "rich." (Pedicures, I wouldn't know, since I don't examine people's toes nor hang out in spas.)

 

The high-income people I know spend their time working and taking care of their kids and modest homes. Just like most everyday people. They are very down-to-earth. Their neighbors wouldn't know their financial situation other than to surmise it from the fact that one or both spouses is a doctor or well-known lawyer. They wear traditional clothes and nothing about them catches your eye if you don't know them. Same is true of me. I have absolutely nothing to gain by taking on the appearance of a shallow, extravagant "rich person." You can usually find me wearing old jeans and t-shirts, no make-up, driving my 12yo sedan, and overdue for my $12 haircut. My kids also don't go about in fancy getups. How ridiculous.

 

Methinks some people believe everything they see on TV. Very sad.

Methinks you have a very vivid imagination. :rolleyes:

 

And you seem to have an incredible prejudice against anyone who chooses to live differently or more extravagantly than you do.

 

Thankfully, you have those 100 like-minded, very wealthy "close friends" to keep you company while you ridicule all of those "shallow, extravagant" rich people. :glare:

[LucyStoner]

Ok, none of us are idiots. There are ostentatious and showy people at all income levels who spend a lot or beyond their means. There are modest people who live below their means at all income levels. There are generous people at all income levels. There are stingy people at all income levels. This is simple enough that it should really go without saying. I know responsible affluent and wealthy people and I know irresponsible and obnoxious affluent and wealthy people. The same for poor people.

 

These statistics from the blog post come from one guy following 233 wealthy people and 120 something poor people. No further methodology is available on his site. Given how the information is presented it's not a stretch that there could easily be selection and other bias in the mix to say nothing of the small sample size. It's all slanted with no depth. I remain unimpressed.

[Miss Marple]

I'm enjoying getting perspectives of what people think wealth looks like. From what I'm reading and have experienced there are advantages and disadvantages to showing ones wealth. Could this be regional? I know that in our area an extravagant lifestyle wouldn't be advantageous from the social or business perspective. But I have a friend in another state who said that he would only go to a physician that wore better clothing and/or drove a better car than he did. That indicated a successful physician and a successful physician must be a good physician. I totally don't get that, but this was from a highly successful computer geek making about the same income as us.

 

I think there are areas where people do get more respect when they "flaunt" their wealth. They make job connections etc. I find that I get better treatment from people when I'm dressed well with makeup on. Personally I don't care what people do with their money. If they want to drive expensive cars, I'm glad because it's money into the economy.

[Scarlett]

I don't know how banks work in the US, but to get a loan here to buy such a house, you have to be wealthy.

 

If you're not wealthy, banks won't risk lending to you.

If you are wealthy you don't need to borrow money.

[ThatHomeschoolDad]

Because homes in particular postcodes sell for over 2 million ? If you can afford to buy a 2 million buck house, you're wealthy.

 

There may be wealthy people living in the modest suburbs but in general, in my city, the wealthy choose to live in suburbs with better housing and amenities.

 

I'm just commenting on my city. There are places most people just cannot afford to live.

For many towns around NYC, you can use train maps to trace the wealth. Makes sense.

[ThatHomeschoolDad]

If you are wealthy you don't need to borrow money.

They just borrow differently. Ask The Donald.

[SKL]

If you are wealthy you don't need to borrow money.

 

Maybe people feel that it's worth making a (manageable) debt to get their kids into a better school?

 

Where I live, there is one particular suburb where a lot of "rich" people congregate.  And in that suburb, there are a lot of large homes.  Not mansions,  but like 2x the size of ordinary homes, usually made of brick and sitting on very nice manicured lawns.  Some of my friends have homes there, and they are not show-offs in general, though the size and location of their homes could give that impression.  Probably the reason these folks live there is because the local schools are known to be very good.  And they might have bought the houses as investments.

 

Some of the "nuveau riche" (or the deep in debt) do buy these properties to sort of fit in with the businessmen they want to schmooze.  (This would also be a reason for some to buy a foo foo car.)  I saw a fair amount of this when I was working in a big accounting firm.  I would not consider these people my friends as we had very little in common.  I don't know if they are actually rich or just leveraging themselves up in the hopes of getting rich someday.  In that industry a person can be "the golden boy" for as long as his gift of gab sustains him, but eventually if all that schmoozing doesn't generate a lot of billing hours, that person is soon selling his house and looking for another job.

[NASDAQ]

I think the statistics don't pass the smell test. At all.

 

63% listen to audio books? Really? Because a lot of wealthy people are old, and a lot of old people never really go onto this whole "you can listen to stuff that isn't the radio" trend.

 

Require their children to read two or more non-fiction books a month? More than half have this oddly specific requirement.

[StephanieZ]

Sorry, Lucy.  There's a long history here...I've never addressed it with her until now.  

 

Gently . . . maybe *now* is not the best time to pick a fight with Joanne? I don't know the history, and I don't have a horse in this race, but if it's been long, and if you follow the board enough to "know" Joanne and her recent struggles and very recent serious injury, I would think you might be able to dig deep and find just enough grace to step away? Think on it. Please. Sometimes being right is less important than being decent and kind.

[TechWife]

I'm not living on a street surrounded by humble millionaires :) It's a small street and I know my neighbors. Most of the home owners aren't poor, but they are middle class.

 

It just doesn't work like that here. In general, housing is segregated and schooling is segregated.

You should read The Millionaire Next Door, then you might look at things quite a bit differently. I also think that if you are that sure of your neighbors' financial situations, serious boundaries are being crossed in your neighborhood. Personality, I'd move. There is no way I'd discuss personal finances with my neighbors.

[Laura Corin]

 In America, it is possible to change one's situation in life. I have seen it happen many times.

 

You might be interested that the social mobility figures for the US are amongst the worst in the Western world.  I came across this interesting fact when I was researching whether the UK was still the hidebound, class-based society of reputation.  I was pretty surprised to find the UK and the US right next to each other on the charts.  It's interesting the stories that countries tell about themselves and about other countries.

 

L

[TechWife]

Seriously ? Boundaries ? Moving ?

 

Yes, seriously. 

 

Financial information is highly personal and confidential. If my neighbors continuously poked their nose into my business with the intent to determine my financial situation with the level of confidence you display about your neighbor's financial situations, I would have serious problems with that. I wouldn't trust anyone that nosy. I wouldn't enjoy living near them and if feasible, I would likely move as I have no desire to live in that kind of environment. 

 

Likewise, if my neighbors divulged details of their financial situations to me, I would consider it extremely odd. I don't need that information at all as a neighbor or a friend - what would be the purpose?  I've known my best friend for 30 years and I don't know details about her finances, why would I care to know details about my neighbor's finances? 

 

If you were to ask me questions about my finances, I would consider it to be extremely rude. I don't know of any social context where prying into someone's finances is acceptable.  Determining someone's financial wealth goes far deeper than knowing where someone lives and how much they spent on their house (this is public information, available through the tax office). Much of what people do financially isn't obvious to the casual observer. People live both above and below their means. You'd have to know an awful lot about someone's finances to determine their level of financial wealth. This level of prying is presumptuous and, well, icky.

[Renee in NC]

I've seen him be surpisingly kind and compassionate.

 

I think a lot of his advice is good. I just don't think it's a match for many stuck in the low income cycle.

 

And I don't agree with him "across the board" in terms of his formulaic steps/program.

 

I love it when people follow through and achieve the freedom of being debt free. I hope to join that group some day.

 

I agree with this.  I remember wanting so badly to follow his advice back when we were very low income, and I would get so discouraged.  He would've said we had an "income problem."  That was true, but solving that problem was very difficult.  I couldn't get a job because daycare was more than I could make at the time.  We couldn't work opposite shifts because employers wanted "open availability."  I had 6 kids at home, and a husband that wasn't willing to better himself to provide for us.  I am very fortunate for generous family members, and I hope to be able to repay them in some way in the future, even if it is by giving someone else a hand up.

[Scarlett]

Yes, seriously.

 

Financial information is highly personal and confidential. If my neighbors continuously poked their nose into my business with the intent to determine my financial situation with the level of confidence you display about your neighbor's financial situations, I would have serious problems with that. I wouldn't trust anyone that nosy. I wouldn't enjoy living near them and if feasible, I would likely move as I have no desire to live in that kind of environment.

 

Likewise, if my neighbors divulged details of their financial situations to me, I would consider it extremely odd. I don't need that information at all as a neighbor or a friend - what would be the purpose? I've known my best friend for 30 years and I don't know details about her finances, why would I care to know details about my neighbor's finances?

 

If you were to ask me questions about my finances, I would consider it to be extremely rude. I don't know of any social context where prying into someone's finances is acceptable. Determining someone's financial wealth goes far deeper than knowing where someone lives and how much they spent on their house (this is public information, available through the tax office). Much of what people do financially isn't obvious to the casual observer. People live both above and below their means. You'd have to know an awful lot about someone's finances to determine their level of financial wealth. This level of prying is presumptuous and, well, icky.

Nowhere did she say she is poking her nose into people's business or revealing her business to others. Seems you are being a little hard on her.

[Scarlett]

They just borrow differently. Ask The Donald.

I have no idea if he is actually wealthy or just living constantly on the edge. But I maintain that living on the edge.....borrowing big and gambling on it to pay off is not truly wealthy.

[Scarlett]

Seriously ? Boundaries ? Moving ?

 

Y'all realise I'm not criticising the people who live in wealthy suburbs, right ? More power to them. Some are lovely and modest. Some are ostentatious.

 

But unless you live in my city you might have to take my word for it that you can tell someone's income (roughly) by where they live!

 

Wealth here is also segregated by generation, with baby boomers tending to have more wealth than Gen X or Y. That isn't due to later generations not working hard; the causes are multifactorial and include changes to the labour market and less housing affordability.

Snip<<<<But unless you live in my city you might have to take my word for it that you can tell someone's income (roughly) by where they live!>>>>>>>

 

This just seems simplistic to me. There could be a person in that rich neighborhood with a free and clear house and one with a mortgage that is killing them.

[Scarlett]

If I had to put a number on it, I'd say anything over $150 000 a year is wealthy. On that you'd still need to borrow to buy a multi million dollar home.

I would say someone making $150k a year and buying a multi million dollar home is stupid not wealthy.

[TechWife]

Nowhere did she say she is poking her nose into people's business or revealing her business to others. Seems you are being a little hard on her.

 

No, actually. I don't intend for this to be personal at all. I'm simply stating that it is not  appropriate for people to know enough about each other to be able to determine with such certainty the financial health of others and why. 

[Scarlett]

Maybe people feel that it's worth making a (manageable) debt to get their kids into a better school?

 

Where I live, there is one particular suburb where a lot of "rich" people congregate. And in that suburb, there are a lot of large homes. Not mansions, but like 2x the size of ordinary homes, usually made of brick and sitting on very nice manicured lawns. Some of my friends have homes there, and they are not show-offs in general, though the size and location of their homes could give that impression. Probably the reason these folks live there is because the local schools are known to be very good. And they might have bought the houses as investments.

 

Some of the "nuveau riche" (or the deep in debt) do buy these properties to sort of fit in with the businessmen they want to schmooze. (This would also be a reason for some to buy a foo foo car.) I saw a fair amount of this when I was working in a big accounting firm. I would not consider these people my friends as we had very little in common. I don't know if they are actually rich or just leveraging themselves up in the hopes of getting rich someday. In that industry a person can be "the golden boy" for as long as his gift of gab sustains him, but eventually if all that schmoozing doesn't generate a lot of billing hours, that person is soon selling his house and looking for another job.

Going into debt to get your kid into a good school district might be self sacrificing and noble but it certainly doesn't prove one is wealthy. Quite the opposite in my opinion.

[Scarlett]

No, actually. I don't intend for this to be personal at all. I'm simply stating that it is not appropriate for people to know enough about each other to be able to determine with such certainty the financial health of others and why.

Whether or not it is appropriate or not would be up to those two people. Not everyone is so guarded with their financial info.

[TechWife]

Whether or not it is appropriate or not would be up to those two people. Not everyone is so guarded with their financial info.

 

IMO, based upon observation and personal experience, it's very unhealthy and leads to many problems. Additionally, her entire neighborhood would have to be like this for her to know so much, so yes, I can say that would be an unhealthy environment. It's weird to think that there potentially could be that many people in one concentrated area that know so much about each other. 

[Seasider]

I can't get past the one about the wealthy having a single focus.

 

Gee whiz, if I weren't taking care of my family's feeding, clothing, transportation, shelter, health, education and emotional needs, I just might have time to focus on one single thing. And I bet I could get darn good at it.

[Scarlett]

I can't get past the one about the wealthy having a single focus.

 

Gee whiz, if I weren't taking care of my family's feeding, clothing, transportation, shelter, health, education and emotional needs, I just might have time to focus on one single thing. And I bet I could get darn good at it.

This is part of my problem with DM in general. I mean, I think the principles are sound and I like the step by step process. But I don't want to live like a crazy person with no enjoyment AT ALL until all my debt is paid. If it was just me I could see it...but I want my kids to have the enjoyment of going out for ice cream after mid week worship. If that 10 bucks slows down my snowball so be it.

[SKL]

Going into debt to get your kid into a good school district might be self sacrificing and noble but it certainly doesn't prove one is wealthy. Quite the opposite in my opinion.

 

Some people take out a mortgage because the after-tax effect is better than taking that money out of their investments to pay for a house.

 

Also, some people take out a mortgage and pay it off in a relatively short time period.  Even a wealthy person might not have $2M of free cash lying around.  Most people's wealth is invested in stuff that isn't very liquid - like buildings.  You're not going to sell a good investment just to avoid a temporary debt.

 

If it's stupid for a wealthy person to buy a $2M house without paying cash, then is it also stupid for a middle-income person to buy a $150K house without paying cash, or a poor person to buy a $10K house without paying cash?

[SKL]

Also, just to get a mortgage wouldn't you have to have about 20% down?  That would mean a $400,000 cash down-payment on a $2M home.  Most people who have that kind of unencumbered cash lying around are probably wealthy.

 

I'm not saying the people in that rich postal code are *not* wealthy.  I'm saying it's likely there are additional wealthy people living in modest postal codes.  Now maybe Sadie lives in a neighborhood that *nobody* with money would choose to live in.  Or maybe she has heard each of her neighbors crib about how "broke" they are.  I could see that happening.  Personally I do not ever discuss my financial details with anyone except my most intimate inner circle, but that doesn't mean I don't grump vaguely on tax day etc.  I am certain that my neighbors have no idea whether I earn taxable income or not, let alone what tax bracket I might be in.

[Scarlett]

Some people take out a mortgage because the after-tax effect is better than taking that money out of their investments to pay for a house.

 

Also, some people take out a mortgage and pay it off in a relatively short time period. Even a wealthy person might not have $2M of free cash lying around. Most people's wealth is invested in stuff that isn't very liquid - like buildings. You're not going to sell a good investment just to avoid a temporary debt.

 

If it's stupid for a wealthy person to buy a $2M house without paying cash, then is it also stupid for a middle-income person to buy a $150K house without paying cash, or a poor person to buy a $10K house without paying cash?

You are putting words in my mouth. I said it would be stupid for a person making 150k to buy a 2m house. And I think that would be stupid whether they had the 20% down or not.

[TracyP]

I do happen to have many friends who are in the top earning percentiles, including the top 1%.  And when I say many, I'm probably talking over 100 whom I consider good friends or trusted business associates, without actually taking the time to count them.  I completely fail to see the correlation between wealth and foolish extravagance.  The only person I know who was big on manicures was my ex-secretary who was not and never had been anywhere close to "rich."  (Pedicures, I wouldn't know, since I don't examine people's toes nor hang out in spas.)

 

The high-income people I know spend their time working and taking care of their kids and modest homes.  Just like most everyday people.  They are very down-to-earth.  Their neighbors wouldn't know their financial situation other than to surmise it from the fact that one or both spouses is a doctor or well-known lawyer.  They wear traditional clothes and nothing about them catches your eye if you don't know them.  Same is true of me.  I have absolutely nothing to gain by taking on the appearance of a shallow, extravagant "rich person."  You can usually find me wearing old jeans and t-shirts, no make-up, driving my 12yo sedan, and overdue for my $12 haircut.  My kids also don't go about in fancy getups.  How ridiculous.

 

Methinks some people believe everything they see on TV.  Very sad.

 

I think you are conflating high income with wealthy. The high income people I know are just like you wrote. The wealthy people that I know are down to earth, kind, and often incredibly generous. They also do have several of the "habits" on Alessandra's list. This may be regional, but I think it has more to do with conflating high income with wealthy. Only the top 10% of Americans have income over $114,000. Those people are statistically high income, but they are not wealthy, IMO. This feels a bit like a pissing contest, so I'm not sure I want to continue this conversation. But I do think it is an important distinction. (p.s. This is not to say that there aren't outliers: wealthy people who appear from the outside to be just like everybody else. But IME, they are true outliers.)

[QueenCat]

If I had to put a number on it, I'd say anything over $150 000 a year is wealthy. On that you'd still need to borrow to buy a multi million dollar home.

 

I can't imagine a bank loaning someone making $150,000 year a loan for a multimillion dollar home. The rule of thumb is that loans are generally for 2-3 times one's income. To me, $150,000 is upper income/class but not wealthy. To me, wealthy is that top 1%.

[SKL]

This is part of my problem with DM in general. I mean, I think the principles are sound and I like the step by step process. But I don't want to live like a crazy person with no enjoyment AT ALL until all my debt is paid. If it was just me I could see it...but I want my kids to have the enjoyment of going out for ice cream after mid week worship. If that 10 bucks slows down my snowball so be it.

 

Never heard of Dave Ramsey when I was having my financial crisis, but from what I've heard, his solutions sound similar to mine.  The thing is, everyone thinks they can have a treat "just this once," but actually "just this once" is never "just this once" unless the person is a strict budgeter.  You can budget for a treat here and there, yes.  But you can't stray from your budget if you expect the end of debt to ever come.  (And some people are OK with that.)

 

Years ago I observed that the recent generation has somehow been convinced - probably by marketing ploys - that they "deserve" all kinds of things they have not earned.  I used to get all this stuff in the mail "you deserve a fancy vacation, just charge it on your credit card!"  "You deserve a better car, a bigger house."  Nonsense.  I thought (and still think) that was unconscionable.  I am also amazed at how many people fell for it.  I had a clerk-level subordinate with a blue-collar spouse (and no children) buy a 5-bedroom house!  This was pretty much the norm in those days.  I was very uncomfortable and was not at all surprised when the $h!t hit the fan.

 

For me, being raised poor was probably what made the difference.  I had a different view of what I needed, wanted, and could wait for.  I chose to wait for most things that could be waited for.  Granted, it was a lot easier for me because I was childless.  But if I'd had kids, I'd have fallen back to what my mom did, rather than be buried in debt for my whole life.

 

I don't know whether Ramsey (or anyone else) has some similar programs for young people, but I think it is needed.  Life would be a lot simpler if people didn't start out thinking they "deserved" stuff they had not yet earned.

[mytwomonkeys]

wealthy in my eyes is being debt free and money in the bank.  people can make a lot and still be "house poor" if you live beyond your means.  that's why some people with big bucks go bankrupt.