posted on Mar, 27 2012 @ 03:38 AM
Today my friend and I were talking and trying to define what "rich" means.
In my opinion, most of society views rich people as:
1.) Having a job that makes what is considering a high income, say over $100,000.
2.) Living in a large house. "Large" being respective of the area you live in.
3.) Driving a fancy car.
4.) Having a good appearance, ie designer clothes, gold jewelry etc.
What I see is:
1.) You may earn $100,000 a year, but if you spend $120,000, you are not advancing yourself, in fact you are moving backwards, and
therefore regardless of your salary you cannot be considered as rich.
2.) You may live in a house that is giant relative to other houses in your area, but if you owe more money on that house than it is worth, again, you
are not rich. You are poor. If you struggle to make your payment each month, you are poor.
You cannot sell that house and take any money out. In some cases, you may be trapped an unable to downgrade to a smaller and less expensive house
because you can't afford to pay the difference between the selling price and the loan. This makes you poor.
3.) You may drive a fancy car, but it may be a leased vehicle. You do not own the car, so it is not an asset. You cannot sell it for it's cash
value, or trade it in on another model. Or, you do own the car, but the car's value is less than the loan amount.
4.) You may be wearing designer clothes and fancy jewelry, but of course no one knows how you got it or how you paid for it. For one thing, designer
clothes can be found at consignment and thrift stores. I know, because I shop at those places. That fancy suit may retail for $800, but could be
found at a used clothing shop for $50.
Or, you could have charged that fancy suit on a credit card charging you 20% in annual interest.
So basically if I see or meet someone who has a great job, home, car, and who looks like a magazine model, I make no assumptions. I have no idea if
they are swimming in money, or drowning in debt.
The way I see it, you are actually rich if:
1.) Whatever job you have, you are able to support yourself on that income, without using credit to meet your normal, monthly expenses.
Simply, you spend less than you earn.
2.) You live in house of any size, but you are able to easily meet your mortgage payment each month. If you are married, your mortgage payment
is low enough that if one spouse lost their job or was unable to work, the other spouse would be able to make the payment on their salary alone, even
if it made things tight. In fact, you might even be paying an additional amount towards principle each month. Even a $10 a month additional
principle payment can take a year off the life of your loan.
You have equity in your house. Your house is worth more than the value of the loan against it. Living in an $80,000 house with a $60,000 loan
against it makes you more "rich" than a person living in a $1,000,000 house with a loan against it of $1,100,000.
3.) Whatever car you drive, you either easily make your payment (and hopefully a small amount over your payment) or else you own the car
Actually owning a 2002 Silverado makes you more "rich" than a person with a $500 monthly BMW payment.
4.) No matter what you are wearing, you paid for your clothes with cash.
In your sweatpants with your hasty ponytail, you are "richer" than the lady to the left in her designer suit that she bought last year and is still
paying off on her VISA card.
The above points were what my friend and I discussed. She said she had never thought about it like that, but the more she thought about it, the more
she thought I was right not to form my opinions of someone's wealth based on their appearance. Because you never know what's behind that
appearance, debt or cash.
When trying to come up with the reason for my (to us at least) drastically different viewpoint on rich versus poor from normal society, all I could
say was the following.
From the age of 19 to 21, I was a bank teller.
Nearly every person who drove a fancy car and wore designer clothes and lived in a nicer area was broke. Their accounts had low or negative balances,
and they were always at the bank. I'm not saying every single person who put on airs was flat broke, I'm simply saying the overwhelming majority of
So who had the money?
The guys who had the money usually needed a haircut, and possibly a shave. They all drove older cars, nothing fancy. Sometimes they were dirty, but
it was working-dirty. As in, paint on the clothes or whatever.
The women who had the money looked like stereotypical housewives or schoolteachers. They wore minimal makeup, had decent hair, and drove reliable
cars. No fancy dye-jobs on their hair or sports cars.
In my opinion, this is the TRUE definition of what is "rich" and I think, if more people viewed it this way, we'd see a whole lot less of the
1%-ers being defined as rich, and a whole lot more of the 99%-ers being viewed as rich.
My husband and I are technically in the 99%, we aren't even close to being in the top 1%, or even (I'd think) the top 10%. Yet we have 2 paid for
vehicles, we own equity in our house, and we have no credit debt.
I honestly believe that that puts my family in a much better situation than most of the so-called 1%-ers. And I'd much rather be me, making what is
considered a small income, than be making $1,000,000 per year but also be drowning in debt: housing, cars, clothes, food, etc. The stress of the debt
is not worth it.
What say you?