One thing that drives me absolutely mental is the current American cultural definition of the word “rich”.
Back in the day if you were rich you owned cities, or huge areas of land, maybe an island or two. You at least had your own skyscraper or oil mine. Today, a family that has a gross income of $150,000 might be referred to as “rich”. Hardly Vanderbilt status.
I don’t have anything against the families that take home over six figures a year, considering that I’m part of one myself. But it does irk me when someone’s income level is brought up in conversation and people tend to determine whether they are rich or poor just by knowing what their salaries are.
Celebrities and athletes could be considered “rich” because of the significant paychecks they earn, but if they were truly rich there wouldn’t be such a high number of athletes going bankrupt (Why the Hell don’t cars/houses fall into lifestyle on GQ’s pie-chart?!).
If I’ve said it once, I’ve said it a million times: It isn’t how much you make, it’s how much you keep. If a family earning $200k also has a $200k lifestyle, then they aren’t rich. By definition “rich” means that you have an abundance of money or assets. It doesn’t mean you have a big paycheck. It doesn’t mean that you have a Mercedes or a McMansion. Lottery winners can be considered “rich” (until they hit the five year mark and end up filing Chapter 11).
In most instances spending and income are directly related to each other. The more money you make, the more you have to spend. For most people, this equates to mindless lifestyle inflation. More money? New car. Bigger house. Shopping without looking at price tags. Daily Starbucks trips. Although many rich people do all of these things, there’s one key thing they’re doing first: Investing at least some of their income. Either that, or they are earning so much money that their accounts continue to grow even with heavy, careless spending (usually this leads to bankruptcy once the source of income is removed).
I work in an industry where I occasionally brush shoulders with people who generally do the same work as me yet they make double or three times what I make. Wow, they must be rich!! While they have the potential and way more capital than I do, in most cases I’m keeping way more of my money every month that I put to work for me.
So why aren’t my co-workers saying that Johnny Moneyseed is rich? First of all I’m not rich, but I do have considerable amount of money saved, and magically that amount grows every month. My co-workers know basically how much I earn from my job (military and government pay is public information), so they assume that my disposable income could never be enough to launch someone into the “rich” category. The concept of saving/investing is almost non-existent to so many people, so it’s hard for them to imagine the process of money growing passively.
The same people that tend to think that people who have high salaries are “rich” also confuse the concept of wanting and wanting to spend. What I mean by this is that, whenever someone is curious about my portfolio I’ll show them what it looks like. I swear it’s word-for-word the same exact reaction every single time, “Holy shit, I want that much money”. I feel like it’s pretty healthy to want a lot of money, but what these non-savers are really saying is: “I would love to take that much money to the mall with me”.
While I never want to be the chef-on-hand and latte-a-day kind of rich person, I will be rich someday. And it won’t be due to the fact that I make an incredible amount either (because I don’t). I just have foresight to tell me that saving money is the right thing to do. While my co-workers, and the better portion of Americans fail to plan ahead. It’s okay though, because you and I will be saving as much of our incomes as possible and becoming rich. It’s a way more reasonable plan than planning for a Millionaire’s salary or to win the damned lottery.
Our job now is to correct this social issue that’s bastardizing the word that describes what we should all be striving for. The next time you hear someone refer to someone else as being rich solely based on the fact that they are high income earners, stop the conversation and tell them: “Being rich isn’t about making a shit-ton of money. It’s about having a shit-ton of money.” Of course you can interpret the message in a curse-free manner, if that suits you. Eventually, we can change the meaning of the word “rich” or perhaps create a new word for high-income/high-spenders.