The Surprising Way People Can Tell if You're Rich

[JSOP]

Not true at all. The lower middle or middle class became upper middle class because they saved like hell. Anyone above would not be able to remain on that economic level being cheapo and not spending vasts amount of money to be respectable in the "club". There is no way you would ever be invited again to the country club and special neighborhood outing if you showed up with dirty shoes and washed out polo. Even in the upper middle class I find certain cheapos repulsive and upsetting, people who constantly try to save a penny. What a waste of time and how exhausting it is to be around such people. Being smart about money is one thing but wrapping remote controls in cling foil and covering leather sofas with towels and blankets is creeping me out.

Dirty shoes is a hygiene and diligence issue, has nothing to do with being frugal.

Washed out polo is a personal habit. Some people just like to hold onto old things and refuse to update. Again, it has nothing to do with being frugal.

Wrapping remote control in a cling foil is a psychological issue and could be helped with psychiatric therapies/treatments. Once again it has nothing to do with being frugal.

Covering leather sofas with towels and blankets is an effectiveness issue that could easily be improved upon by watching Martha Stewart shows and/or reading Home Decoration magazines. Still has nothing to do with being frugal.

 

[globalarbtrader]

Like with anything in life, the answer is usually a convoluted one because of the vast number of variables.

I guess you are half joking but if anyone has to save money on a car to save more then such person is not rich nor will ever be rich. Rich means to not have to care about the value of a car. Someone considered rich today does not think twice whether a car costs 50k or 150k. But as cars are still considered status symbols by many (beyond my understanding) even some poor schmucks sneak into the prestige car segment to come across as someone they are not otherwise. The other way does not really hold true. Why would someone who earns 300k or more per year drive a beaten down BMW 3 when he can drive a 100k or 150k car and would not have to think twice, price wise. Makes not much sense to me. I mean we talk about fuck you money to anyone considered upper middle class and above when it comes to cars (unless of course we include luxury cars)

Wasn't joking. Perfectly true story.

Earning 300K a year and driving a 100K or 150k car is IMHO nuts. Let's say you change the car every 3 years and depreciation is 50% over that time. That's 16.7 grand a year on depreciation alone. To that you can easily add another 5 grand in running costs. Let's go with the 100K car, and assume your take home is 170k. So that means you're spending about 13% of your income just on your car. I can understand why a poor person with no access to public transport would do that, but it is nuts for someone who doesn't have to.

Someone earning that kind of money probably has a mortgage and other bills that amount to 70K, which means they have 100K for what I'd call discretionary expenditure and savings. Again to spend a fifth of your discretionary income on a car is batshit crazy.

[That's assuming they only have one car per household. These sorts of people usually have several, none of them cheap]

GAT

 

[Millionaire]

Again to spend a fifth of your discretionary income on a car is batshit crazy.

[That's assuming they only have one car per household. These sorts of people usually have several, none of them cheap]

GAT

So the example is 100K income left over each year.

Then each person gets to decide how much of that they are going to invest and how much of that you are going to 'squander' on fun things.

Im sure you are already familiar with the George Best quote.
"I spent a lot of money on booze, birds and fast cars. The rest I just squandered."

Personally i would love to squander 50K a year of a100K left over income on purely fun things and invest the other 50K.

That would be after building up a nice nest egg though.

The problem is once you start spending like thats its hard to stop, eg if you lose your job or have to take a drop income.

"After a man makes money .. he very quickly loses the habit of not spending. But after he loses money it takes him a long time to lose the habit of spending"
-- ROASO

 

[DiceAreCast]

Because jsop says so... Lol. Well I say those are all clear indications of being frugal at best but more like a cheapo who is so obsessed with saving that extra penny that he does not realize he is penny wise but pound foolish.

Dirty shoes is a hygiene and diligence issue, has nothing to do with being frugal.

Washed out polo is a personal habit. Some people just like to hold onto old things and refuse to update. Again, it has nothing to do with being frugal.

Wrapping remote control in a cling foil is a psychological issue and could be helped with psychiatric therapies/treatments. Once again it has nothing to do with being frugal.

Covering leather sofas with towels and blankets is an effectiveness issue that could easily be improved upon by watching Martha Stewart shows and/or reading Home Decoration magazines. Still has nothing to do with being frugal.

 

[DiceAreCast]

No sure where you grew up but anyone I know who earns 300k or more has their own home, not a single penny of debt, hence no mortgage, in fact most I know who now earn above 250k a year actually never had debt in their past lives at all, not even a mortgage. They did save and lived smaller until they could afford it. And now when they make 300k or 500k or 700k they could not care less whether the car cost 50k or 150k. And no, none of my friends, family members or acquaintances changes their car every 3 years. When I talk numbers, by the way, then that is after tax income. I thought that was assumed, we are talking about someone who earns plenty enough to not have to care about where that extra 100k goes that is being paid for a better car every 5 or 7 years.

People like that, myself and most people I closely know included, are obsessed with the absolute top quality and reputation for reliability. If that costs a significant chunk extra then so be it. I would never think twice how much a sleeping bag costs when getting a new one for the outdoors, or a roof top tent or a new computer. I frequently pay over a thousand dollar for a single fly rod, simply because the quality and material and properties are worth it. Others declare me insane and would not pay more than 50 bucks, but such is life. I just shared that I surround myself with plenty people who earn pretty good money and could not care less how much top notch quality costs. One thing is for sure, we seem to be happier than the average crowd. Perhaps because it's aggravating to see things break all the time? Even my hiking socks have a lifetime warranty (darn tough) lol.

Wasn't joking. Perfectly true story.

Earning 300K a year and driving a 100K or 150k car is IMHO nuts. Let's say you change the car every 3 years and depreciation is 50% over that time. That's 16.7 grand a year on depreciation alone. To that you can easily add another 5 grand in running costs. Let's go with the 100K car, and assume your take home is 170k. So that means you're spending about 13% of your income just on your car. I can understand why a poor person with no access to public transport would do that, but it is nuts for someone who doesn't have to.

Someone earning that kind of money probably has a mortgage and other bills that amount to 70K, which means they have 100K for what I'd call discretionary expenditure and savings. Again to spend a fifth of your discretionary income on a car is batshit crazy.

[That's assuming they only have one car per household. These sorts of people usually have several, none of them cheap]

GAT

 

[globalarbtrader]

No sure where you grew up but anyone I know who earns 300k or more has their own home, not a single penny of debt, hence no mortgage, in fact most I know who now earn above 250k a year actually never had debt in their past lives at all, not even a mortgage.

Well I live in the UK. Houses are very expensive here clearly compared to where ever you are from. As a result, almost everyone buys a house with a mortgage at some point in their lives, even people with high incomes. They just buy bigger houses. Someone earning £300K after tax in the UK - around £550k before tax - would most likely own a house that cost around a million quid and probably twice that (you can borrow ~4 times your pre-tax income, and most people would have a deposit, so a couple of million is easily doable). Earning £550k puts you well inside the top 0.1% of the income distribution, but around 1.6% of house sales were for more than a million quid and 0.3% were for more than two million.

Yes you could save 100K a year for ten years and buy a one million quid house with cash, but pretty much nobody does (apart from anything else, in the past that one million house you wanted to buy would now cost 2 million). Alternatively, you could save 100K a year for three years and buy a small £300k house in a not great area which is probably a long way from where you work.

(With interest rates near zero it's pretty weird to not have a mortgage, which is why even people who could buy houses with cash - like me - have them)

GAT

 

[JSOP]

Because jsop says so... Lol. Well I say those are all clear indications of being frugal at best but more like a cheapo who is so obsessed with saving that extra penny that he does not realize he is penny wise but pound foolish.

Not that foolish, he still saved money but just not that elegantly or with class and sometimes not that effective but it's his home and its his appearance. He doesn't really need to give a f*** of what other people think.

 

[Millionaire]

No sure where you grew up

"Grew up". Past tense. Interest rates were high and houses were cheaper, also tax rates were lower.

Was easier to save up and buy with cash.

Now houses are expensive and interest rates are low and taxes are higher.

Saving up and buying with cash is much harder. Also stupid as will cost you alot more. A mortgage locks in the price today. Saving up for 5 or 10 years and you could end up paying double.

 

[DiceAreCast]

We seem to talk around in circles and be lost in translation. I was not talking about people who earn 100k. Such person clearly should not buy a 100k or 150k car nor live in a 1mln home. I tried to convince you that I was arguing with proportionality on my side, apparently I utterly failed. I still find it weird that a hedge fund boss would drive around in a beaten up dirty bmw 3. That does not sound frugal nor logical but more screams like that person has some emotional deficits and is in need of having to make a statement, an albeit strange statement. Or perhaps he does not enjoy driving or riding cars. I think people who live outside their proportions, under or above often times have other issues they are dealing with.

Well I live in the UK. Houses are very expensive here clearly compared to where ever you are from. As a result, almost everyone buys a house with a mortgage at some point in their lives, even people with high incomes. They just buy bigger houses. Someone earning £300K after tax in the UK - around £550k before tax - would most likely own a house that cost around a million quid and probably twice that (you can borrow ~4 times your pre-tax income, and most people would have a deposit, so a couple of million is easily doable). Earning £550k puts you well inside the top 0.1% of the income distribution, but around 1.6% of house sales were for more than a million quid and 0.3% were for more than two million.

Yes you could save 100K a year for ten years and buy a one million quid house with cash, but pretty much nobody does (apart from anything else, in the past that one million house you wanted to buy would now cost 2 million). Alternatively, you could save 100K a year for three years and buy a small £300k house in a not great area which is probably a long way from where you work.

(With interest rates near zero it's pretty weird to not have a mortgage, which is why even people who could buy houses with cash - like me - have them)

GAT

 

[Millionaire]

We seem to talk around in circles and be lost in translation. I was not talking about people who earn 100k. Such person clearly should not buy a 100k or 150k car nor live in a 1mln home. I tried to convince you that I was arguing with proportionality on my side, apparently I utterly failed. I still find it weird that a hedge fund boss would drive around in a beaten up dirty bmw 3. That does not sound frugal nor logical but more screams like that person has some emotional deficits and is in need of having to make a statement, an albeit strange statement. Or perhaps he does not enjoy driving or riding cars. I think people who live outside their proportions, under or above often times have other issues they are dealing with.

There are plenty of millionaires who don't waste money on cars. Probably a majority of them.

30 years ago the modal car brand owned by millionaires in the US was a Ford.

Nowadays i would guess its a Toyota.