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Mela
03-10-2009, 05:47 PM
And I know there are people worse off than I am.
I know I should be grateful to have a job.
I know all of this.
But I'm tired of being surrounded by rich people.

We have millionaires next door to us who are retired and own a vacation home and blow in once every few months from their latest trip.
A relative is currently fixing up her second home in Florida and I have to hear about it every time we talk.
Other friends need to have all the latest gadgets - big TVs, Wii games. They don't have children, by the way. And they go on vacation a few times a year. My husband and I still own 13-inch tube TVs - one we inherited from stepson. Can't afford to get a new flat screen.

Other friends are involved in various home renovations and purchases.

It seems everyone is vacationing, renovating, spending money and I'm thinking, "Are they in this recession too? Or is it just us?"

Today I learned that despite our meager income (relatively speaking) my husband and I still make too much to qualify for the revised homeowners' rebates under Gov. Corzine's new budget here in New Jersey, which apparently has cut out everything but the kitchen sink. And if you know anything about New Jersey you know we pay ridiculously high taxes here, which is part of the reason why we've gotten rebates. Now that's gone too.

I want you all to know, I'm not a whiner. I haven't been away on vacation in six years and I can't spend anything unless it's budgeted to the penny. But today I'm just sick of it. I'm sick of hearing what everyone else is doing when I can't budge an inch.

I know be happy for my health. But allow me a little whine? With some cheese?

Anyone else want to whine along with me?

James81
03-10-2009, 05:54 PM
A while back I read a book called The Millionaire Next Door by Thomas Stanley.

In that book, they did studies on the typical first generation millionaire in America, and to me the results were astounding.

Those people who have vacation homes, buying all sorts of big TVs and shit, it does NOT necessarily mean that they are rich or better off than you. In fact, it's more likely that they are in a mountain of debt to maintaint their lifestyle.

The average rich person, you won't even KNOW they are rich. They drive regular (USED) cars. They wear nice clothes, but it's rarely name brand. If you were to look at them, there's no way you'd think they were anything more than middle class.

So maybe it'll help you to know that those people who are constantly telling you about renovations and their big screens and their vacations are probably people who are in a bunch of debt to do so.

Devil Ledbetter
03-10-2009, 05:56 PM
What I'm seeing is that apparently all the retail stores have used the economy as an excuse to cut staff. In the last week I've:

1. Had to get my name on a waiting list just to talk to a saleperson about buying a netbook at Best Buy (we bought two, plus a wireless router).

2. Waited in line 30 minutes at the Best Buy checkout for the "privilege" of spending over $700.

3. Stood in a line 10 deep at Victoria's Secret checkout for the "privilege" of spending $250 on bras.

4. Stood in a line 20 deep (no exaggeration) at Sam's Club.

5. Stood in a line 12 deep at Target.

Retail needs to quit laying people off already. I'm starting to get pissed. If it gets to be anymore of a hassle, I'm going to quit stimulating the economy just to avoid these damned checkout lines.


ETA: I didn't buy any of this stuff on credit. Also, I live in a relatively small-town area where long lines are not the norm except maybe the day before Christmas.

Cranky
03-10-2009, 06:02 PM
What I'm seeing is that apparently all the retail stores have used the economy as an excuse to cut staff. In the last week I've:

1. Had to get my name on a waiting list just to talk to a saleperson about buying a netbook at Best Buy (we bought two, plus a wireless router).

2. Waited in line 30 minutes at the Best Buy checkout for the "privilege" of spending over $700.

3. Stood in a line 10 deep at Victoria's Secret checkout for the "privilege" of spending $250 on bras.

4. Stood in a line 20 deep (no exaggeration) at Sam's Club.

5. Stood in a line 12 deep at Target.

Retail needs to quit laying people off already. I'm starting to get pissed. If it gets to be anymore of a hassle, I'm going to quit stimulating the economy just to avoid these damned checkout lines.


ETA: I didn't buy any of this stuff on credit. Also, I live in a relatively small-town area where long lines are not the norm except maybe the day before Christmas.

And meanwhile, my husband is still looking for a job. :(

Mela, don't let it get to you. I think James' post was right. Could be wrong, but yeah, IME, people who live like that are financing their lifestyle, not paying cash.

Bubastes
03-10-2009, 06:03 PM
What James81 said. I work with people who make less money than me, but you wouldn't know it by comparing our lifestyles. They have vacation homes, boats, and classic cars. I drive a 10 year-old car and get most of my clothes from Kohl's (and I also have a 13-inch tube TV). If you saw my home, the first thing you'd notice is the utter lack of stuff. Some people tease me about still living like a college student, but I don't care. I have a few nice things, but those are things that have meaning for ME. They're not things that anyone else would notice.

Don't compare your insides with other people's outsides. You don't know what their household balance sheets look like. They could be a mess.

Mela
03-10-2009, 06:12 PM
You know, I look around and it's like, what the hell? Are we (my husband and I) the only ones dealing with what's right in front of our faces?

And I've thought of that, about people spending beyond their means. Except I also wonder whether it's also a matter of people not wanting to let go of their lifestyles and afraid to look at what's really happening with the economy.

Listen, a part of me says, you got the money, spend if you want to - god knows it's a great time right now to buy anything if you can. I'm just tired of being surrounded by it - it seems no one in my circle is as poor as my husband and I right now.

James81
03-10-2009, 06:13 PM
Don't compare your insides with other people's outsides. You don't know what their household balance sheets look like. They could be a mess.

Exactly.

I mean, right now I'm living better than I've lived in YEARS. I went through financial hell, ate ramen noodles, the whole nine to get to this point, but I'm at a point where I have a little extra money every paycheck, can eat out a few nights a week, etc. And pay cash for it all. I don't have any credit cards or anything like that and don't want them.

But from the outside looking in, people would probably feel sorry for me. I live in a dinky little one bedroom apartment, drive a dinky little car (that gets like 40 miles per gallong btw ;)), and am wearing basically the same clothes I've had for 3 or 4 years now.

But I have financial peace...FINALLY. And I am happy with the simple lifestyle. I don't need to go blow $300 at a restaraunt to be happy. I don't need to go on lavish trips. Someday I hope to travel, but I'm going to do it on my own dime.

Dave Ramsey, while I don't agree with EVERYTHING he says, has a saying that has become my financial mantra:

"If you live like no one else, then later you can live like no one else."

It means if you live frugally like no one else for a season, then later you can live lavishly like no one else using cash to fund your lavish lifestyle and not credit.

DeleyanLee
03-10-2009, 06:22 PM
I know be happy for my health. But allow me a little whine? With some cheese?

Anyone else want to whine along with me?

*serves Mela some brie with berry compost to go with her whine.

Yeah, I know the feeling, believe me.

My best friend (and housemate) doesn't work. Her late husband died on the job, so she's living off workman's comp and has been for years. Before he died, she didn't work then either. Big screen TV? No problem, she bought one. $1000 on a kit for her new hobby? OK, she saved a few months, but she has it (and it's still sitting up in the box in her "workroom" untouched for the last 3 months and probably will never be put together--which is just how all her hobbies run). Blu-ray player. Yep, got that too. Re-buy almost the entire extensive DVD collection for Blu-Ray? Making good headway on that. Late model sports car? Check. Every comic book and/or TV series DVD in whatever series she's following this week? Yeppers--she's added a special shelving unit in her closet for them.

She doesn't fix the house (took her 2 years to fix the shower so it's a shower and not a trickle--and that was under protest about "the cost"--under $200). I could stand it better if she was putting money into the house and improve things in general. She doesn't take vacations (I wouldn't call driving up to New England to see her grandkids a vacation, at least).

Yeah, I know the feeling, believe me. For all that I really do love my best friend, it gets really painful to have her flaunting money she doesn't earn when I'm working 40 hrs plus just scraping by.

jubileerocker
03-10-2009, 06:26 PM
Hey we're trapped in Kentucky because they give state aid to anyone... it's not worth the types we are surrounded by

Mela
03-10-2009, 06:28 PM
"If you live like no one else, then later you can live like no one else."

It means if you live frugally like no one else for a season, then later you can live lavishly like no one else using cash to fund your lavish lifestyle and not credit.


That's a good mantra James. Because it is hard not to get caught up in trying to live like everyone else when everyone around you is buying big ticket items.

I'm not saying I don't spend - I live within a weekly cash allowance so I buy for my house with that. I don't use credit cards. My husband and I have tried to save but it's so incredibly difficult.

Zipotes
03-10-2009, 06:37 PM
A while back I read a book called The Millionaire Next Door by Thomas Stanley.

In that book, they did studies on the typical first generation millionaire in America, and to me the results were astounding.

Those people who have vacation homes, buying all sorts of big TVs and shit, it does NOT necessarily mean that they are rich or better off than you. In fact, it's more likely that they are in a mountain of debt to maintaint their lifestyle.

The average rich person, you won't even KNOW they are rich. They drive regular (USED) cars. They wear nice clothes, but it's rarely name brand. If you were to look at them, there's no way you'd think they were anything more than middle class.

So maybe it'll help you to know that those people who are constantly telling you about renovations and their big screens and their vacations are probably people who are in a bunch of debt to do so.

This is all so true. I was just at a wedding and the REALLY rich people were down to earth and nice and the ones TRYING to be rich were snobbish and rude.

jubileerocker
03-10-2009, 06:40 PM
This is all so true. I was just at a wedding and the REALLY rich people were down to earth and nice and the ones TRYING to be rich were snobbish and rude.

The type where they have to save up to get the biggest wide screen on the street when they're living in an apartment? I hate that

Bubastes
03-10-2009, 06:40 PM
That's a good mantra James. Because it is hard not to get caught up in trying to live like everyone else when everyone around you is buying big ticket items.


Have you checked out some of the personal finance blogs online? They're great for keeping you motivated. Also, if you're shooting for bigger goals (like financial independence), it makes it easier to ignore what other people are buying. My attitude: I work far too hard earning my money, and I'm not going to waste it on stuff I don't even want just to keep up appearances.

WendyNYC
03-10-2009, 06:49 PM
Living on the Upper East Side of Manhattan, I've learned to perfect the art of Never Comparing Up. Otherwise, truly, I'd go insane with jealousy. It makes no difference whether they are in debt or trust fund babies or just plain ol rich.

Life's too short.

MoonWriter
03-10-2009, 07:09 PM
Amen to what Wendy said.

An old college roomate and friend of mine is now the Senior Vice-President of a Venezuelan bank in Houston. After spending the first few years after graduation working back in Venezuela, they transferred him to New York. He did well. They then sent him to Houston to open a branch from the ground up. He did it. Then they wanted a full service branch. He made that happen as well. Out of a few hundred branches around the world, his is one of the top three most profitable. And he's compensated well for his efforts - 2 bonuses a year, each over 50k. I have no idea his salary, but his bonuses alone are more than I make. My first thought - Wow, that would be nice. After 5 seconds, I thought - Not as nice as having a life. He calls every week on his way home from work. This week, I got his call around 9:00 pm.

It's likely some will have more, others will have less. I've decided to be happy with what I have and where I'm headed. I've paid off the house and cars, have no debt, and fund my retirement accounts (cash and tax-deferred) every month. I used a financial calculator to determine what I need to retire based on how long to retirement. That money is taken from my savings account each month and we live on the rest. If there's any extra, that goes into savings as well. It's called paying yourself first, and if you do that, grasshopper, you'll be prepared for winter. Others, those who don't know how to save, those who are slaves to credit card interest, those who live for the day, may never be able to retire.

stormie
03-10-2009, 07:11 PM
Mela, the ones who flaunt it usually have debt up to their eyeballs.

We have a friend who rented an expensive home only a few steps from the ocean, outfitted it with a huge tv and expensive stereo system, traded in his Honda for a Lexus, had a wine cooler stocked wih expensive wine, and showed off his collection of signed Lladro (figurines).

How could we tell he was in debt? He never opened a bottle of that expensive wine in years, the Lexus never got necessary tune-ups, the Lladros were stored away "so no one would knock them over," he hardly ever worked , and now he has to move in with his sister away from the shore.

The truly rich would open that expensive wine and share it with friends and family, the Lexus would be a BMW or Jaguar and get regular tune-ups, and the Lladros--at least some of them--would be displayed.

James81
03-10-2009, 07:29 PM
That's a good mantra James. Because it is hard not to get caught up in trying to live like everyone else when everyone around you is buying big ticket items.

I'm not saying I don't spend - I live within a weekly cash allowance so I buy for my house with that. I don't use credit cards. My husband and I have tried to save but it's so incredibly difficult.

I'd recommend you picking up some of Dave Ramsey's stuff (or listening to his radio show if you live in an area where you can get him). My recommendation is to buy the CD "Financial Peace: Dumping Debt." His advice is down to earth, solid, and he's extremely motivating and inspiring.

Granted, a lot of snobbish economists criticize him, but I think his advice is solid. It may not be the FASTEST way to wealth, but it's definately the most responsibile and if you follow his plan it will bring you peace of mind when you reach your goals.


This is all so true. I was just at a wedding and the REALLY rich people were down to earth and nice and the ones TRYING to be rich were snobbish and rude.

Exactly.

that's because there are two types of mindsets.

There is the "rich" mindset and there is the "wealthy" mindset.

The rich mindset demands that you spend money, act uppity, and have money to be successful.

The wealthy mindset is a level of contentment that you find, irregardless of how much money you have. You might be eating ramen noodles, scraping two pennies together, but you can be "wealthy."

Once you learn this contentment, and you rise against the pressures that our society pushes down on you and stand against it, and you resolve to be content with whatever you have, not only will you have peace on the inside, but you'll discover financial freedom on the outside.

It's the reason why the "giving" mentality works so well. What's that old scripture in the bible?

"Give and it shall be given unto you; pressed down, shaken together, and running over shall men give unto your bosom."

I'm not a religious person, but I think that is a great mindset to have. When you learn to give of yourself, you'll find that you will receive as much or more in return.

Mela
03-10-2009, 07:31 PM
Mela, the ones who flaunt it usually have debt up to their eyeballs.

We have a friend who rented an expensive home only a few steps from the ocean, outfitted it with a huge tv and expensive stereo system, traded in his Honda for a Lexus, had a wine cooler stocked wih expensive wine, and showed off his collection of signed Lladro (figurines).

How could we tell he was in debt? He never opened a bottle of that expensive wine in years, the Lexus never got necessary tune-ups, the Lladros were stored away "so no one would knock them over," he hardly ever worked , and now he has to move in with his sister away from the shore.

The truly rich would open that expensive wine and share it with friends and family, the Lexus would be a BMW or Jaguar and get regular tune-ups, and the Lladros--at least some of them--would be displayed.

Thanks Stormie. To be honest, I can't tell whether the majority of these people are flaunting or not. I suspect, however, they're not.

I do, though, know of one couple that fits the bill similar to your neighbor's. Bought a McMansion with a pool and a boat down the Jersey shore and are now, from what I hear recently, undergoing their third bankruptcy (the last I heard they were four months behind on their mortgage).

I had chance to talk with them back in October; we were sitting near a relative's swimming pool and they were saying how they no longer get their own pool closed and covered up during the winter. In Jersey?

The red flag went up. Well, of course the reason they don't is because they can't afford to have their pool closed as it should be. So they just don't do it.

popbunny
03-10-2009, 08:03 PM
Appearances can be deceiving, that's for sure.

My inlaws are friends with a couple who like to tell everyone how their frugality and penny pinching and smart investing over the last twenty years has afforded them the ability to pay for their $700k home with cash, own a $65k RV, and a $250k vacation property.

Then we found out the truth - the wife's mother had passed and her insurance policy was worth $2.2 million.

We have friends we thought had plenty of cash. After all, when they bought a new minivan, they spent $52,000 on it! They took expensive vacations to exotic places all the time. They now have three kids, and live in a two bedroom house. They've admitted they want to move but their can't afford it - they would not be approved for alarger mortgage, and couldn't afford moving expenses anyway. They live off of consumer debt, and they're basically at the very edge of it. They're in their thirties and haven't saved a penny for their retirement or their children's education.

Some nights I lose a little sleep wishing we had enough money for a nicer house, better cars, more exciting vacations. But I'd never exchange it for the sleepness nights that come with living in a financial house of cards, where one slight breeze can send you tumbling into bankrupcy.

Toothpaste
03-10-2009, 08:04 PM
Here's another POV on the issue. First off let me say that I'm not exactly rich myself. I'm not poor, but I'm an actor/author, I haven't really been affected by the crisis yet because I've ALWAYS had to save my money, spend wisely. I've never had the money to begin with. Plus I'm always unemployed (between occasional bouts of "Dude, I'm actually acting in something!" or "They actually bought my book, OMG!"), so losing my job really isn't a factor for me. I came from a comfortable middle class home where I never thought I lacked anything, we went on vacations etc. But again, we were/are not particularly extravagant people. Neither my parents or I have any debt, and we refuse to spend more than we make.

With that setup. I know we can feel jealous of people who have money, who can afford all those things that I never could (and probably never will). In this current climate especially there is an element of nose rubbing going on. I know that I read somewhere that people with money are starting to feel embarrassed spending it, taking their own bags to exclusive shops so they aren't walking down the street with the name of an expensive store on their bags. But at the same time we kind of need the people who still have money to be spending their money. That's the problem right now with the economy, more people saving (as they should be) and less people spending. So while it might be annoying to see people flaunt their wealth, honestly it makes me feel happy when I hear that there are people out there still spending money. Granted this doesn't go for the banks or automakers who still seem to be spending extravagantly despite the bailouts. I'm talking about personal money, not professional.

As to whether these particular individuals are living outside their means? Considering that too is one of the reasons we are in this current crisis, I have no doubt that several of them are. I just hope those that can afford it, are spending it. That's all.

Bravo
03-10-2009, 08:35 PM
the NYT's has had a few articles recently about wealthy people who are trading in their rolls royces for less expensive cars, not because they can't afford them anymore, but because they dont want to appear too rich to their neighbors and other new yorkers.

i can't say that i blame them, money can be a touchy subject even during normal economic times, but today it can be just downright volatile.

Wayne K
03-10-2009, 08:51 PM
Eat the rich.

I'm an anarchist. Property is theft.

WendyNYC
03-10-2009, 09:20 PM
Eat the rich.

I'm an anarchist. Property is theft.

Hmmm, yes, well that's one way to handle it. Do your neighbors look tasty, Mela?

Clair Dickson
03-10-2009, 09:33 PM
But are these people happy?

My older brother loves "new" things. But as soon as the newness wears off, he needs his fix again and has to buy something else new. He's not happy for very long with his new stuff. His wife is even worse than he is about needing new and shiny.

I kind of enjoy being frugal. Though, sadly, my family (and my inlaws) aren't as supportive as I'd like. If we say we're trying to save money, we'll often get challenged on it ("With all that money in the bank?" or "If I had your money, I'd burn mine.") It's like some how us talking about being frugal is some a criticism of our family members who don't.

NeuroFizz
03-10-2009, 09:43 PM
I am rich. Unfortunately, it's only short for richard.

robeiae
03-10-2009, 09:44 PM
*looks up from plate of goose liver pate*

Huh?

No, seriously. What others have said here is right. Many people that appear to be doing very well are still financing their lifestyles.

I went through this some years ago with my wife, during a number of our monthly budget sessions. She kept seeing friends with new cars, new furniture, making home improvments, and the like and was perpelxed why we apparently couldn't afford to do some of these things, based on the numbers we were looking at for our finances. But--to toot my own horn for a moment--I was forcing money into savings, paying off all credit card bills in full every month, and overpaying any debt that I could, before I even measured out the household budget with what was left. And from that budget, I still looked for savings.

Now, we lived like that for a long time, then the worm turned because our income went up, while our spending really didn't. So suddenly, the pressure abated.

I bought a new TV last year. It replaced one that was nearly fifteen years old. And all large purchases we make now, we pay in full--or we don't make them.

In the meantime, I have--unfortunately--noticed that some of our free-spending friends are not spending anything, anymore.

Wayne K
03-10-2009, 10:00 PM
In the meantime, I have--unfortunately--noticed that some of our free-spending friends are not spending anything, anymore.

Your friends were probably living on credit and credit increases. I went through this too except in NYC where people took every opportunity to shove their shiny shit in our faces.
Today they have no money, no credit and their flashy cars have long since been reposessed.
My hunk of junk is paid for. My rent is paid, and we don't have much more than that.
But I don't owe anyone money though, and no one will ever get to say so.

robeiae
03-10-2009, 10:02 PM
Your friends were probably living on credit and credit increases.
Exactly. That's my point. There was no way to know that with certainty years ago, of course. But it sure looks that way, now.

Siddow
03-10-2009, 10:03 PM
There's a guy who works with my H, they make roughly the same amount of money, give or take a few grand, and it's a nice income. A week ago, guy asks my H if he can borrow some money to pay his mortgage; seems they'd let it get 30 days overdue. H asks me, I said no way in hell, tell his wife to put some of those Coach bags on Ebay if they're so strapped, or maybe tell her to hey, get a job, or watch her own kids instead of paying for after-school care, etc.

So yeah, two people making the same amount of money can have vastly different lifestyles, with vastly different personal economies. My Wal-Mart purse carries just as much as one from Coach--oh, wait. It carries MORE. My bad. :D

Devil Ledbetter
03-10-2009, 10:10 PM
Now, we lived like that for a long time, then the worm turned because our income went up, while our spending really didn't. So suddenly, the pressure abated. That's what happened to me. I did the write-at-home mom thing for 9 years and lived frugally so our family could make ends meet on a teacher's salary and the occasional free-lance or grantwriting gig. A year ago I went back to work full time and nearly doubled our household income. One the one hand, I still have a lot of frugal habits and zero debt beyond our mortgage. On the other, I've been spending a lot on stuff I never used to spend on: work wardrobe, after-school care, replacing some big ticket items (washer, carpeting, computers) that were well past their prime.

I have treated my family to a few fun things that we could finally afford after nearly a decade of doing without. It's weird being in this position when everyone is suddenly tightening their belts.

robeiae
03-10-2009, 10:18 PM
I have treated my family to a few fun things that we could finally afford after nearly a decade of doing without. It's weird being in this position when everyone is suddenly tightening their belts.
Yeah, it really is.

Wayne K
03-10-2009, 10:54 PM
You know what really burns my ass is the people who took 100k in credit knowing they couldn't possibly pay it back, and now they blame it on predatory lenders. I know predatory lending exists, but most of them knew this day was coming. How the F do they get to be victims now?

Seaclusion
03-10-2009, 10:58 PM
You know what really burns my ass is the people who took 100k in credit knowing they couldn't possibly pay it back, and now they blame it on predatory lenders. I know predatory lending exists, but most of them knew this day was coming. How the F do they get to be victims now?

Because it was their foolish borrowing and spending that allowed the rest of us to make money. Now that they can't spend any longer, we have nobody to sell useless stuff to.


Richard

Kathleen42
03-10-2009, 11:41 PM
What I'm seeing is that apparently all the retail stores have used the economy as an excuse to cut staff. In the last week I've:

1. Had to get my name on a waiting list just to talk to a saleperson about buying a netbook at Best Buy (we bought two, plus a wireless router).

2. Waited in line 30 minutes at the Best Buy checkout for the "privilege" of spending over $700.

3. Stood in a line 10 deep at Victoria's Secret checkout for the "privilege" of spending $250 on bras.

4. Stood in a line 20 deep (no exaggeration) at Sam's Club.

5. Stood in a line 12 deep at Target.

Retail needs to quit laying people off already. I'm starting to get pissed. If it gets to be anymore of a hassle, I'm going to quit stimulating the economy just to avoid these damned checkout lines.


ETA: I didn't buy any of this stuff on credit. Also, I live in a relatively small-town area where long lines are not the norm except maybe the day before Christmas.

I had a similar problem the last few times I've gone out to local restaurants. They've been laying off AND raising their prices.

Clair Dickson
03-11-2009, 01:39 AM
Well, seeing as how I've seen the economic impact for two stores (I worked at one and Hubby worked at another)-- sales are down. Way down. While stores still have periods with lots of customers, that may be all the money a store makes in a day. Depends on the store, but most stores are feeling the pinch.

If people were still spending as they once did, we wouldn't have had four restaurants close this year in my county. Three of them that had been in business for ten+ years.

Many people are not spending nearly as much money as they used to. Even if there are customers in a store or restaurant, chances are they are not spending the same quantities of money as they once did.

For example, at the grocery store where I used to work, they're seeing far more $100 grocery bills rather than $200-$500 grocery orders. No new stores in the last couple years... people are cutting back. Remember the thread a few weeks back where one AW member was trying to live off $100? She's not alone in trying to slash spending. If everyone did that, there'd be less profit for store, more layoffs, etc. She was still at the store... she was just buying less. As are many people. Busy does NOT inherently mean profitable.

Just as lavish purchases does not always mean someone can actually AFFORD said things.