Others Confuse Me

[JanieD]

Not sure exactly why I need to ask ya'll about this, but maybe someone can help me out. When I'm around others, they "seem" to have a lot... new, upgraded suv or trucks or expensive clothes & "toys". And the kids have everything & do everything or so it would seem. I'm just confused by it. Guess I don't get out much????? But when I do, I see new this & that on everyone around me. It's not my business, but I'm left wondering if I'm doing something wrong. Not that I want all that stuff, but I'd love to add $$$$$ to my retirement fund & savings. I'm into the numbers part of it & can't get the numbers to add up to equal all the stuff people have. So how do they do it & why?

[ChristopherJ]

Facade...I'd be willing to bet if you saw an assets/liabilities sheet for them it'd be quite lacking on the assets side, and heavy in liabilities.

[frugalbabe]

Its called credit cards, home equity loans, and basically robbing Peter to pay Paul.

[joyofsix]

My dh and I wonder this all the time. We keep thinking 'What are we doing wrong?' Maybe we just aren't up to our eyeballs in debt.

[momof2joys]

I notice this all the time too!!! I sometimes wonder if people are buying things for fun or because they really need it!! Then I also think about how much better off I will be because of the money I am saving by not buying that stuff. I was also thinking about how nice it would be to have a lot of nice and new things, but what I have is just fine for me!! Reuse, reuse, and when you don't think you can reuse it again, you can always find one more use!!!

[Nishu]

Umm... maybe they have an inheritance? Maybe they find good deals? Maybe they make a lot of money?

Is it really right to assume that just because someone has a lot, they're drowning in debt? I don't see why making such assumptions are okay, and why we feel justified in making those kinds of judgments of other people. The truth is you just don't know.

[DJ1972]

Some folks can afford to live that way. And some people spend all their money on "stuff" and have no assets (home, savings, retirement funds, etc.) Other people get "stuff" by using credit cards and other types of debt. The way I see it, they are both broke. But, to each his own.
I choose to live on less than I make and to save for a rainy day, but that's my choice.

[Xadrian]

I wonder this too sometimes. I would say probably credit cards. My sister doesn't work, has three kids (plus one on the way) and her husband works, although he doesn't make a whole lot. She's spend spend spend, buy buy buy! How does she do it? Her and her husband have racked up so many credit cards, I believe he had only $25,000, she had around $50,000 possibly more. They filed bankruptcy and they were out spending money the next day on junk. My sister mainly uses scams selling/buying items from e-bay. I guess I have to be in awe of her creativity on these different scams..but good grief! So I guess if you want to rack up credit cards and scam then you could definately get some new items lol j/k !

[monkeywrangler71]

I used to wonder why everyone else we know lives in million dollar homes stuffed with expensive stuff. Then I realized that they all have two incomes and make at least twice as much as us, and they don't have kids.

Mystery solved.

[erinny1983]

They do it b/c they are in a huge state of denial.

They think that these bills will get paid somehow, either thy'll pay them very slowly, or they'll default and stick the rest of us with the bill, or worse "my kids will take care of it when i'm old".

Or they get sucked into the "I deserve this" mentality, and keep piling it on.

People like this just don't inhabit the same reality as the rest of us, or at least us FV'rs. They may seem happy, but I'll bet that a lot of them are extremely stressed and depressed.

[annymoll]

It could be that they make more money. It could be that they have less debt. You could ask them.Then you would know.

[shoiji]

When working I pretty much made less than my friends. However they did complain about credit cards. Personally I really never understood how they could afford what they did.

[Greebo]

Umm... maybe they have an inheritance? Maybe they find good deals? Maybe they make a lot of money?

Is it really right to assume that just because someone has a lot, they're drowning in debt? I don't see why making such assumptions are okay, and why we feel justified in making those kinds of judgments of other people. The truth is you just don't know.

While you're right, its not good to stereotype, statistically, its most likely true.

The truly affluent make it a point to live well within their means, buy older homes in established neighborhoods, tend to drive used cars, and are frugal. Those with high incomes but low net worths by comparison tend to have newer homes, newer cars, and flashier, more expensive lifestyles.

Source: The Millionaire Next Door

[Nishu]

So how does the author know that? I want a controlled study. He could have easily pulled that out his butt.


But still... I don't think you all would appreciate it if someone labeled you poor or out of touch because of your frugal ways. If they did, you'd probably label them as either secretly unhappy or not so secretly delusional. When you judge other people for the way they live, it makes you look jealous and unhappy. Since I don't consider myself an jealous and unhappy person, I try not to think that way.

If you don't know they're in debt up to their necks, you really shouldn't say/think it. You don't need to justify your way of life by trying to point out the flaws in other's lives.

I think it's petty and we should be above it.

[Greebo]

So how does the author know that? I want a controlled study. He could have easily pulled that out his butt.

Google: "The Millionaire Next Door" research
Read the introduction of the book.

The research is described quite adequately.

But still... I don't think you all would appreciate it if someone labeled you poor or out of touch because of your frugal ways. If they did, you'd probably label them as either secretly unhappy or not so secretly delusional. When you judge other people for the way they live, it makes you look jealous and unhappy. Since I don't consider myself an jealous and unhappy person, I try not to think that way.

I'm not saying it's a good idea to negatively judge others. I'm simply saying that, statistically speaking, most people who "live the high life" are broke.

If you don't know they're in debt up to their necks, you really shouldn't say/think it. You don't need to justify your way of life by trying to point out the flaws in other's lives.

But I do know it, statistically speaking. 70% of Americans live paycheck to paycheck. The frugally minded who've been at it a good long while and don't live paycheck to paycheck don't blow their money (by and large for the most part, excluding the about 12% (iirc) of the truly wealthy who inherited) on show.

Are there exceptions? Yes - there are very very wealthy people who live the high life (on less than they make). However, if you examine the statistics on American debt to savings ratios, and look at the research done on the truly affluent, its a safe bet. Big house new cars new neighborhood = income affluent, asset statement not so much.