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Actually, I believe it is you that is not getting my point.
But that is okay, debates like this can be excellent learning tools for all involved.
Quote:
Originally Posted by user_id
...You've provided data, but it doesn't support anything. All you've done is state that "well those in the top 10% sound rich to me", but this just begs the question. You're going about it from the wrong direction, you need to first decide what sort of things a rich person should be able to do and then you look at what sort of income/wealth you'd need to do those things.
I have not said "those in the top 10% sound rich to me." I have provided a couple of definitions of rich that can be quantified and verified. I have also provided data lending credence to both definitions.
Recapping the definitions:
1. People with more assets than 90 (or 95%) of society.
2. The ability to live in the lifestyle they prefer off of investable assets.
a. Example: One retirement rule of thumb is that you need 25 times your yearly income. The average income of a San Franciscan is about $45k. So, the average SF'n needs about $1.125m to retire-more is better!
On the other hand, all you have said is $1m doesn't sound rich to me.
You haven't provided a definition, objective or subjective of what rich is. Nor have you provided ANY data.
The closest you come to any type of proof of your opinions is when you provide the following benchmark: The truly rich live in wealthy communities.
Sadly, your benchmark is lacking. This benchmark indicates little regarding a persons financial assets. It simply shows they have good cashflow. Nothing about investments or overall financial health is proven. That fancy neighborhood could actually be hurting their finances because they have to spend more than they can afford to "keep up with the joneses."
By any reasonable interpretation, $1 million meets an objective definition of rich. It may be the lowest rung in the rich ladder, but it is rich. I believe the average Joe agrees with me.
Get some facts that prove me objectively wrong, if you can. Or stop wasting time blowing smoke up the forums...
Actually, I believe it is you that is not getting my point.
Then free feel to clarify it as I did my position. But I'll do it again, if you're going to allow the "well they can sale their house and move someone cheaper" then the vast majority of Americans are rich. After all, even the average American has more than someone in an African village.
You want to define rich relatively, yet not really.
Quote:
Originally Posted by Keim
I have provided a couple of definitions of rich that can be quantified and verified.
You've provided definitions, but how exactly are you verifying them? How about you explain how you've "verified" definitions.
Quote:
Originally Posted by Keim
Sadly, your benchmark is lacking. This benchmark indicates little regarding a persons financial assets.
Sadly, you're not getting the point. I'm not trying to give a benchmark, I suggested a very rough guideline and that is all ($1 million in net worth once you exclude home equity and retirement accounts). I was in no sense suggesting that "living in a wealthy community" was a benchmark, rather pointing out the oddity of someone rich not being able to live in a wealthy community. Seems like something a rich person should be able to do right?
Quote:
Originally Posted by Keim
Get some facts that prove me objectively wrong, if you can.
Should I cite some data on the mating habits of swans? That would be just as relevant as the data you are citing, you are arbitrary defining rich by some benchmark, yet that isn't how people use the word. The vast majority of people don't consider themselves "rich", instead the rich are those above them socioeconomically. For example, the working-class are likely to think the upper-middle class are "rich". Yet, if you ask the middle-class if they think they are rich they are likely to say no because they are looking up to the upper-class. In this sense, its only the socio-economic group that has nobody above them that thinks of themselves as rich. They are at the top. So the question is what is the net worth of the upper-class? Easily more than $1 million.
Anyhow, I haven't been trying to define "rich", this started because I suggested that the meaning of "millionaire" in popular opinion as moved away from financial reality due to the effects of inflation. In the 60's a million was a lot of money, today its not nearly as much. One also has to consider the shift from pensions to retirement accounts as well.
Now, you can try to define rich by whatever benchmark you want, but I find doing this fairly pointless.
Back to the op question...I don't know if ALL rich people are frugal, but I sure do see a lot of middle class people frittering their money away on stupid sh*t.
A data plan might be a reimbursable expense. My phone plan piggybacks on my spouse's plan, so we pay a ridiculously small amount for our two smartphones: ~$10 per month. Our home internet service is also a reimbursed expense, as is his mileage.
You might be surprised at the benefits employers provide to certain professionals. What appears indulgent just might be frugal after all.
Here is an example why i think cutting spending is a good way of creating wealth: Last year I made 86K but i was not on a budget. At that time i worked 60 hours a week and i started a hotdog stand on the side to increase my income. The business did not work out and i lost th 15K i spent on the investment. So my net assetts gained that year was nearly zero. This year i only made 80K but i am on a budget. I also started a small vending machine company on the side. The vending company makes about 4-5K a year profit, while my savings from the budget is 24K. It is much easier and less riskier for a person to save from their existing income than it is for them to increase their income. You said that most people dont have the will to save, but if they cant do that then i doubt they can manage a small business either.
My family used to be Old Money (I had an aunt who slept in a sleeping bag in her manor to avoid paying for laundry), but , for a host of reasons, got ruined in the Seventies, but as a child, I was taught the basics of clever savings (bordering on the stingy sometimes, but it's smarter than the opposite). Now although I have a lower middle class income, I still manage to budget, I have O credit, and yes , I do have an old Bakelite phone!
Then free feel to clarify it as I did my position. But I'll do it again, if you're going to allow the "well they can sale their house and move someone cheaper" then the vast majority of Americans are rich. After all, even the average American has more than someone in an African village.
You want to define rich relatively, yet not really.
You've provided definitions, but how exactly are you verifying them? How about you explain how you've "verified" definitions.
Sadly, you're not getting the point. I'm not trying to give a benchmark, I suggested a very rough guideline and that is all ($1 million in net worth once you exclude home equity and retirement accounts). I was in no sense suggesting that "living in a wealthy community" was a benchmark, rather pointing out the oddity of someone rich not being able to live in a wealthy community. Seems like something a rich person should be able to do right?
Should I cite some data on the mating habits of swans? That would be just as relevant as the data you are citing, you are arbitrary defining rich by some benchmark, yet that isn't how people use the word. The vast majority of people don't consider themselves "rich", instead the rich are those above them socioeconomically. For example, the working-class are likely to think the upper-middle class are "rich". Yet, if you ask the middle-class if they think they are rich they are likely to say no because they are looking up to the upper-class. In this sense, its only the socio-economic group that has nobody above them that thinks of themselves as rich. They are at the top. So the question is what is the net worth of the upper-class? Easily more than $1 million.
Anyhow, I haven't been trying to define "rich", this started because I suggested that the meaning of "millionaire" in popular opinion as moved away from financial reality due to the effects of inflation. In the 60's a million was a lot of money, today its not nearly as much. One also has to consider the shift from pensions to retirement accounts as well.
Now, you can try to define rich by whatever benchmark you want, but I find doing this fairly pointless.
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You are dead RIGHT
