I Made $570K Last Year, But I Don’t Feel Rich

[mrvlad0]

I Made $570K Last Year, But I Don’t Feel Rich (In Fact, I Feel Worried)

 

http://bit.ly/157f4NE

 

 

[VAL9000]

I Made $570K Last Year, But I Don’t Feel Rich (In Fact, I Feel Worried)

 

http://bit.ly/157f4NE

 

I love reading personal finance stories.  This one is a little light on the details, but my diagnosis is that the interviewee lacks patience.  He seems to jump into opportunities without adequate consultation and research.  Building wealth is a long term game - patience is key!

 

[ERICOPOLY]

He didn't keep $570k anyhow because he paid tax.

 

The only number that matters is how much he was able to take home.

[fareastwarriors]

Feeling "rich" is relative.  If all your neighbors/friends are earning millions and you're doing half a mil, you wouldn't feel rich at hard but more likely feel like you're doing something wrong.

[ERICOPOLY]

Feeling "rich" is relative.  If all your neighbors/friends are earning millions and you're doing half a mil, you wouldn't feel rich at hard but more likely feel like you're doing something wrong.

 

You also might be earning $500k from your labors, but if you neighbor "earns" $500k from passive income while hiking the National Parks that is an entirely different meaning of rich.

 

[mrvlad0]

Feeling "rich" is relative.  If all your neighbors/friends are earning millions and you're doing half a mil, you wouldn't feel rich at hard but more likely feel like you're doing something wrong.

 

You also might be earning $500k from your labors, but if you neighbor "earns" $500k from passive income while hiking the National Parks that is an entirely different meaning of rich.

 

Eric, Excellent observation. It is what I live for.. freedom!

[NormR]

Feeling "rich" is relative.  If all your neighbors/friends are earning millions and you're doing half a mil, you wouldn't feel rich at hard but more likely feel like you're doing something wrong.

 

You also might be earning $500k from your labors, but if you neighbor "earns" $500k from passive income while hiking the National Parks that is an entirely different meaning of rich.

 

Eric, Excellent observation. It is what I live for.. freedom!

 

Thankfully freedom can be had for much less.  8)

[wachtwoord]

Feeling "rich" is relative.  If all your neighbors/friends are earning millions and you're doing half a mil, you wouldn't feel rich at hard but more likely feel like you're doing something wrong.

 

You also might be earning $500k from your labors, but if you neighbor "earns" $500k from passive income while hiking the National Parks that is an entirely different meaning of rich.

 

If I'd be making over $500k (gross) a year I would be there pretty damn quick. If he isn't, he's doing it wrong.

[bargainman]

Feeling "rich" is relative.  If all your neighbors/friends are earning millions and you're doing half a mil, you wouldn't feel rich at hard but more likely feel like you're doing something wrong.

 

You also might be earning $500k from your labors, but if you neighbor "earns" $500k from passive income while hiking the National Parks that is an entirely different meaning of rich.

 

Eric, Excellent observation. It is what I live for.. freedom!

 

Thankfully freedom can be had for much less.  8)

 

Reminds me of the story of the businessman and the mexican fisherman:

 

http://www.wanttoknow.info/051230whatmattersinlife

[Guest Dazel]

 

 

Income tax, medical malpractice insurance, likely $100's of thousands of student debt, a couple bad investments and anyone that lived through 2008 not owning Fairfax or credit default swaps will remain worried if they are trying to keep up with the Jones'...

 

Doctors are in a hurry because they start their financial lives a decade behind...school vs. Work...

 

Dazel.

[Guest hellsten]

I Made $570K Last Year, But I Don’t Feel Rich (In Fact, I Feel Worried)

 

http://bit.ly/157f4NE

 

This explains his issue:

I will say, once we did move to this area, there is a palpable pressure to keep up with the Joneses. When I drop my kids of at school, every other car is a Range Rover or a high-end BMW, Mercedes, Lexus. For a while I began desiring a Range Rover—my next door neighbor has one.

 

Just move to Dhaka, Bangladesh and you'll feel rich.

 

These people have the opposite problem:

http://thebillfold.com/2013/02/a-friendly-chat-with-a-rich-person-household-income-360000/

 

They feel rich, but aren't rich if you ask me.

[ERICOPOLY]

I Made $570K Last Year, But I Don’t Feel Rich (In Fact, I Feel Worried)

 

http://bit.ly/157f4NE

 

This explains his issue:

I will say, once we did move to this area, there is a palpable pressure to keep up with the Joneses. When I drop my kids of at school, every other car is a Range Rover or a high-end BMW, Mercedes, Lexus. For a while I began desiring a Range Rover—my next door neighbor has one.

 

Just move to Dhaka, Bangladesh and you'll feel rich.

 

These people have the opposite problem:

http://thebillfold.com/2013/02/a-friendly-chat-with-a-rich-person-household-income-360000/

 

They feel rich, but aren't rich if you ask me.

 

They are working him 80 to 100 hours per week, and he has net debt.  He is not rich!

 

Surely, you must at least have a net worth above $0 to meet any criteria of being rich.

[Guest deepValue]

I Made $570K Last Year, But I Don’t Feel Rich (In Fact, I Feel Worried)

 

http://bit.ly/157f4NE

 

This explains his issue:

I will say, once we did move to this area, there is a palpable pressure to keep up with the Joneses. When I drop my kids of at school, every other car is a Range Rover or a high-end BMW, Mercedes, Lexus. For a while I began desiring a Range Rover—my next door neighbor has one.

 

Just move to Dhaka, Bangladesh and you'll feel rich.

 

These people have the opposite problem:

http://thebillfold.com/2013/02/a-friendly-chat-with-a-rich-person-household-income-360000/

 

They feel rich, but aren't rich if you ask me.

 

They are working him 80 to 100 hours per week, and he has net debt.  He is not rich!

 

Surely, you must at least have a net worth above $0 to meet any criteria of being rich.

 

You're definitely not rich if you have to keep working to live an upper-class lifestyle. You're rich when you keep working because you want a higher score, not because you're saving for a yacht.

[Uccmal]

Ludicrous. 

 

I absolutely cant comprehend keeping up with the Joneses.  I mean I drove beat up pickup trucks until a few years ago.  Then a Honda Civic.  Now I have a Hyundai Sante Fe for the family, and my wife has an Accord that we bought used.  Paid cash for everything. 

 

Now, I have a decent house in a nice neighbourhood, with a mortgage I could pay off with a couple of weeks notice, if I had to.  I resurfaced my driveway myself last fall, built my own deck, did some of my own car repairs on the older cars.  We hire people for jobs we hate, or cant do ourselves.

[roundball100]

[...] I resurfaced my driveway myself last fall, built my own deck, did some of my own car repairs on the older cars.  [...]

Do you build fences too Al?  I am looking for someone who doesn't charge too much. 

[LC]

Ludicrous. 

 

I absolutely cant comprehend keeping up with the Joneses.  I mean I drove beat up pickup trucks until a few years ago.  Then a Honda Civic.  Now I have a Hyundai Sante Fe for the family, and my wife has an Accord that we bought used.  Paid cash for everything. 

 

Now, I have a decent house in a nice neighbourhood, with a mortgage I could pay off with a couple of weeks notice, if I had to.  I resurfaced my driveway myself last fall, built my own deck, did some of my own car repairs on the older cars.  We hire people for jobs we hate, or cant do ourselves.

Good on you, this is how I aspire to live my life as well.

[Uccmal]

[...] I resurfaced my driveway myself last fall, built my own deck, did some of my own car repairs on the older cars.  [...]

Do you build fences too Al?  I am looking for someone who doesn't charge too much. 

 

lol...  Why dont you just move to a gated community, get a groundskeeper, a pool person, a live in maid, and security, and skip the fence? 

 

P.S. I no longer work on cars, mostly because I cant actually tell whats in there anymore.  I was never much good at it anyway. 

[tripleoptician]

This is a very interesting topic because everything is so relative to your surroundings. I am a  currently a two income earning physician family and can appreciate the skewed perspective the interviewee comes from. It isn't just Keeping up with the Jones' , it becomes what is social norm.

I grew up in a wealthy family(my father was a doctor) but thought at a young age my dad was cheap because he made me work for all my discretionary spending and "only" bought me a used Suzuki Swift at 16 yrs old.

 

When in medical school, I travelled in summers working off my "free money" credit line and went to underdeveloped areas like India and Southeast Asia. Very quickly I realized that the "poor" in Canada are wealthy by third world standards. I quickly saw most things as a waste of money in a relative sense and became ultra frugal.

 

Slowly as I have began working I see a slow creep of upper class mentality affecting myself and my wife in a relative sense. We still rent, drive modest cars and save ~75% of our income, but I still find myself justifying expenses by saying its only an hour's work equivalent. I also feel constant pressure from my middle class friends for not "living it up".

 

I should qualify this post by disclosing I do feel rich mainly because we never have to worry about money, although I'm not financially free and could stop working. I just think wealth/money psychology is so interesting as it is so relative based on individual perspectives.

[Guest Dazel]

 

Reading a book right now..."How much is enough?" The Love of Money and the case for the good life...

 

It is a bit of a mind bend because it is taking the question through the ages...capitalism roots etc...Keynes, Aristotle, Marx etc...

 

It is obvious that the "good life" is different for everyone...

 

In Keynes era rich house wives went " mad" because they had nothing to do...Beverley hills and Paris are better in this age I guess.

 

Keynes also thought that through technology advances in agriculture and mining people would only have to work 15 hours a week to live the good life by 2020...he did not count on 7 billion people!

 

Dazel.

 

 

[Uccmal]

Interesting comments Dazel, and triopt. 

 

It always amazes me when I see older people who could retire any time still working.  The examples are many: William Shatner is qouted as saying: I have to do something!  Think Buffett, Watsa, Wilbur Ross, Carl Icahn, Anthony Hopkins, Rolling Stones and every other 60s musician who didn't die.  Barbara Wawa just died at 87, and never stopped working. 

 

I have an acquaintance who retired a few yrs. ago.  He is 71 and remodels bathrooms, on his own.  He doesn't need the money.  He likes the physical work, and the creative aspect of the work.  He works at his own pace which is surprisingly fast. 

 

I seldom see medical Drs. retire.  Many go to reduced hours or shared work arrangements. 

 

Which brings me back to the first post: Why is this young couple worried about money in the first place when he likely will never retire anyways?

[Parsad]

This is a very interesting topic because everything is so relative to your surroundings. I am a  currently a two income earning physician family and can appreciate the skewed perspective the interviewee comes from. It isn't just Keeping up with the Jones' , it becomes what is social norm.

I grew up in a wealthy family(my father was a doctor) but thought at a young age my dad was cheap because he made me work for all my discretionary spending and "only" bought me a used Suzuki Swift at 16 yrs old.

 

When in medical school, I travelled in summers working off my "free money" credit line and went to underdeveloped areas like India and Southeast Asia. Very quickly I realized that the "poor" in Canada are wealthy by third world standards. I quickly saw most things as a waste of money in a relative sense and became ultra frugal.

 

Slowly as I have began working I see a slow creep of upper class mentality affecting myself and my wife in a relative sense. We still rent, drive modest cars and save ~75% of our income, but I still find myself justifying expenses by saying its only an hour's work equivalent. I also feel constant pressure from my middle class friends for not "living it up".

 

I should qualify this post by disclosing I do feel rich mainly because we never have to worry about money, although I'm not financially free and could stop working. I just think wealth/money psychology is so interesting as it is so relative based on individual perspectives.

 

Hi Triple,

 

You should thank your father for doing what he did.  Too many kids grow up with the wrong perspective.  Yesterday, I was driving with my brother, and this young kid was driving a Lamborghini Gallardo convertible.  Nothing unusual in Vancouver, as too many spoilt children can be found driving around in the expensive cars their parents bought them, because it's much easier to do that than to be a responsible parent actually active in their children's lives. 

 

Many of these children are satellite children...parents live back in another country, while their children grow up here alone in a big house, lots of money and no parents around.  You need transportation, let me buy you a Ferrari!  You hungry, don't worry I left a ton of money in your checking account, just go buy something to eat.  You need clothes, go to Robson Street and buy luxury. 

 

Anything about responsibility to community...no.  Anything about giving back to society...no.  Anything about being self-sustaining and standing on your own two legs...no.  Kid's car gets confiscated for reckless driving...no worries, buy them another Ferrari. 

 

For every one of those parents, I hope there is another one like yours to counter balance!  "No" is a very tough word for parents to say, but the alternative could create a very undesirable population.  Cheers!   

[Mikenhe]

 

 

 

 

P.S. I no longer work on cars, mostly because I cant actually tell whats in there anymore.  I was never much good at it anyway.

 

ha! yeah - I used to work on my own cars - until the day I decided to change the clutch on an MGBGT I owned that had overdrive. the only way to do it was to take the entire engine out. That was my first engine removal and I managed it, and replacing the clutch in a day. Took me 4 days to put the damn thing back together... a lesson learned there...  I now have a Volvo twin turbo and I have no idea what 3/4 of the things under the hood do... nor do I wish to!

[tripleoptician]

Uccmal,

 

I agree medical doctors rarely retire but the reasons vary. A portion (mainly surgeons) derive most of their sense of self worth from their profession and continue long after what is needed for financial reasons. Often their insane hours and dedication has led their personal relationships to suffer and they don't have hobbies because they never had free time.

Another portion have balanced lives but love what they do and the mental stimulation they derive from it. They often work reduced hours but will work into their 60-70's

Another portion (more than you would think) take on heavy debt burdens acquiring possessions and need to keep working in their 60's as they need to pay for their mansions and boats.

 

I hope to be in the 2nd category and continuing to work for pleasure but not for financial reasons by my early 40's. I don't like being dependant on the income because our government can be highly unpredictable in its approach to health care and our medical system is on an unsustainable path.

[tripleoptician]

Parsad,

 

I agree! I'm extremely happy my father instilled some basics tenants of understanding hard work and not being spoon fed. I still recognize my path in life had sustained advantages over others, but most of where I'm at today came through hard work and some luck.

 

[turar]

Another article in a similar vein: https://blog.wealthfront.com/college-vs-retirement-savings-silicon-valley/