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I'll share something I learned myself in another Hacker News comment. https://en.wikipedia.org/wiki/The_Millionaire_Next_Door https://en.wikipedia.org/wiki/The
by JohnJamesRambo 7y ago
I'll share something I learned myself in another Hacker News comment.
https://en.wikipedia.org/wiki/The_Millionaire_Next_Door https://en.wikipedia.org/wiki/The_Millionaire_Next_Door
"Their findings, that millionaires are disproportionately clustered in middle-class and blue collar neighborhoods and not in more affluent or white-collar communities, came as a surprise to the authors who anticipated the contrary."
It really opened my eyes to the fact that most people I think are rich are actually not rich, just extremely completely in debt.
"The authors make a distinction between the 'Balance Sheet Affluent' (those with actual wealth, or high-net-worth) and the 'Income Affluent' (those with a high income, but little actual wealth, or low net-worth)."
- war1025 7y agoMost people's idea of "Rich" is that you have a very high burn rate. Sort of fits with the "Work hard / Play hard" ethos of success in America. Financial freedom comes from minimizing your burn rate. Far less flashy, but you can stretch money amazingly far when you aren't trying to keep up with what you think people expect of you.
- amazingman 7y agoThere are people for whom the difference between $10 and $10k is effectively immaterial. These are the people I bin as “rich”, and I think that’s how we should all see it. While someone making $500k/yr is definitely prosperous, the “rich” are an entirely different category of individual. It only serves the more selfish interests of the truly rich to conflate the two.
- war1025 7y agoI think the tricky thing about it is that income / wealth distributions are exponential, so no matter where you are on the curve, it basically looks the same. The people that have more than you have massively more, and the people who have less don't really seem to have that much less.
- kgwgk 7y ago“I mean, it's one banana, Michael. What could it cost, ten thousand dollars?”
- lukejduncan 7y agoIsn't this the premise of books like "The Millionaire Next Door"? Edit: Whelp -- not sure how I missed the link.
- war1025 7y ago(The link he posted was for The Millionaire Next Door)
- Swizec 7y agoRich is when you have a high income. Wealthy is when you have a high net worth. I find people often confuse the two and it took me a long time to clear up in my mind. You can be rich, but live paycheck to paycheck. Even be superbly in debt. Lots of upper middle class lives this way. You can also be wealthy but poor. These are folks with cashflow problems and a lot of illiquid wealth (like a house you can’t sell) Short term you wanna focus on being rich. High cashflow unlocks many options. Long term you wanna focus on wealth. Wealth unlocks freedom and peace of mind.
- MuffinFlavored 7y ago> You can be rich, but live paycheck to paycheck. Even be superbly in debt. Lots of upper middle class lives this way. Are they actually upper middle class (by definition) if they have a low net worth?
- Swizec 7y agoImho middle class means you work for a living, upper class means you can live on wealth. You might also be surprised to learn that a $166,000/year household income puts you in the top 5% of US households. Definitely upper middle class but still pretty easy to burn your whole paycheck every month. https://en.wikipedia.org/wiki/Upper_middle_class https://en.wikipedia.org/wiki/Upper_middle_class
- sys_64738 7y ago> Imho middle class means you work for a living I thought that's what working class meant.
- Swizec 7y agoI thought that was blue collar? Would you call a software engineer making $150,000/year working class? What about a lawyer somewhere in midwest scraping by on $50,000/year? Now what about an independent plumber making $200,000/year? Working class or not?
- Balgair 7y agoBeing a millionare and spending a million dollars are exact opposites.
- username444 7y agoUnless you have sufficient millions to cover those millions of spending.