7 Reasons Your Neighbors Have More Money Than You

by Vincent King · 295 comments

You look out the window of your home each night after dinner, staring across the street at your neighbors. You long for their fancy cars, their manicured lawns, and even the vacations they seem to take several times a year.

You’re not alone.

I often look out my window, too — staring at the gorgeous homes and cars — wondering how they manage to pay for them. After all, we live in the same neighborhood, our kids go to the same schools, and their salaries aren’t that much more than ours.

There are several reasons that our neighbors can afford so many of the things we would love to have, but could never fathom splurging on:

1. Perception Is Everything

Your perception may be skewed. You see fancy cars in the driveway, and you can almost feel the trim lawns under your toes. You watch work crews constantly going in and out as they work on awesome remodeling projects inside. Yet, none of this means that your neighbors are wealthier than you are.

Just because YOU see them as more affluent doesn’t mean they ARE.

You’re only able to see the surface of their spending; you have no idea what’s happening underneath.

2. Allocation Is Essential

While you choose to consistently save money for your kids’ education, and for your retirement, they could be spending these “excess funds” on their cars and homes. They might be making the shallow choice to spend their money on what people can see, while you’re spending your money on the life you want to live, both today and tomorrow. You’ve chosen to pay for peace of mind.

It’s how your neighbors allocate their income that makes them seem richer than they are.

3. Perks Matter

While your neighbors’ salaries might be slightly higher than yours, it likely isn’t enough to justify their massive leap in spending. Fringe benefits, however, can greatly widen the gap. They could be receiving perks like cars, phones, or laptops; these can give the recipient an amazing leg up when it comes to freeing money for other pleasures.

4. Luxuries of the Mature

As families mature, houses get paid off and savings grow. Even if your children attend the same school, their children are older, and the adults have a few years on you, as well. They very well could have spent those few extra years making payments on their house and putting money in the bank — giving them a huge advantage. Just imagine how much more financial freedom you would have if you didn’t have to manage your monthly mortgage.

5. Their Lives Might Be Plastic

Your neighbors might worship the power of the plastic. While you’re smart enough to understand the headaches of undisciplined credit, your neighbors might be living carelessly — buying short-term luxury today in exchange for a meager tomorrow.

6. They Know Where to Find Deals

I consider myself a connoisseur when it comes to finding great deals on groceries and kids clothing. Perhaps your neighbors also know something about finding deals on the things they need, which frees up more money for things they want.

7. They Pay for Their Immediate Wants First

Your neighbors could also have more money than you do because they prioritize differently, and pay for projects and luxuries from their savings.

While my neighbors may or may not make more money than me, I don’t let it influence the way that I live.

I spend money in the way that’s most important for my family and me — both for a better, more comfortable today, and for a brighter tomorrow.

As “The Millionaire Next Door” and “Rich Dad, Poor Dad” point out, those that use their money for homes, cars, and clothes are spending on material items and living on “rented” lifestyles. Instead of building assets, these people are living on liabilities, and that can be a dangerous mindset.

You don’t have to live like a king today if it means you’re going to live like a pauper tomorrow.

It doesn’t matter what the Jones’ are doing. Not now, or ever. Save where you can, spend where you need, and live a life you want.

Have you ever struggled to keep up with the Jones’? How did you manage? 

Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current Verizon FiOS promotion codes and promos to see if you can save more money every month from now on.

Looking to save on your mortgage? Here are some good rates...

Related Posts

{ 295 comments… read them below or add one }

Old rich guy December 13, 2012 at 2:37 pm

I’m independently wealthy. I did it by working my butt off (70+ hours a week) while finishing college over a 7 year period. I also drive a car until the “wheels fall off”. If I need home repairs, I get a book and study the work needed, and then do it. Physically retired at 53, but always thinking about staying sharp.

Reply

monkeyfurball January 4, 2013 at 8:31 pm

It’s fine to be retired at 53 if that’s what YOU want. Personally, I like working and I’m almost 60. When I’m tired of it, I’ll stop. Wife and I have several million dollars in the bank and we live below our means. But, don’t spend your whole life being a miser and missing out on foreign travel, USA travel, hobbies, a sports car, etc. You only live once and you can’t spend cash in the afterlife.

Reply

Danyy WEb January 15, 2013 at 9:21 am

Amen!

Reply

David W February 3, 2013 at 8:09 am

Why do people assume you are missing out if you don’t buy a sports car or do any of the other things you mentioned? Personally I value freedom to not have to work over having a nice car. I enjoy learning how to do my own home repairs rather than pulling out the checkbook. Being frugal is not the same as being a miser.

Reply

Melvis September 10, 2013 at 6:44 am

Right on David!!
I used to work 2-3 jobs working my life away to try to afford luxuries for my child and myself that really didn’t matter. Not understanding that I missed half of her childhood….although we did take some awesome trips that we will always remember, but now, being retired at 50, I can enjoy her college days. We still travel but much more frugal, and to tell you the truth, we enjoy it much more! I am so much happier not having to be at someone’s beckoned call, and having to risk my life driving all over hell to get to work in bad weather, my stress level is pretty much down to nothing. I don’t need fancy cars, homes, clothes. I’d rather shop at Tjmaxx and not have to put up with a micromanager at work.
Carry On……

Reply

mike February 17, 2013 at 2:59 pm

How do you know that you can’t spend or even live in the afterlife. What do you know about the afterlife. Or for that matter about the the now life.

Reply

john May 10, 2013 at 12:55 pm

Well Mike,
I am pretty sure you can’t spend in the afterlife, whether it exists or not. How many times have you seen an estate settled and a will read and found out that the deceased took their money with them to the afterlife? I dont think that is much of a question.

Reply

Old rich guy December 13, 2012 at 3:40 pm

I need to add another point or two. I haven’t had a “credit card” in over 20 years. If I can’t afford it, I don’t need it. This philosophy helped put 3 of my children through college. I retired over 15 years ago. Education and common sense goes a long way in making good decisions on your personal wealth. Stay away from vices like booze and smoking. At $5.00 a pack, you’re wasting $1825 (1 pack a day) to $3,650 (2 packs) a year. It adds up…….

Reply

Tim May 15, 2013 at 9:36 pm

How do you book a flight… to anywhere or for that matter book a hotel room sir?

Ya know, there is a difference between having a credit card and using it responsibly (like paying it off monthly and accruing perks) and those that rack up the debt needlessly.

Reply

K W June 23, 2013 at 6:25 am

Debit cards are a possibility, then.

Reply

wini July 15, 2014 at 4:54 pm

Yes. I am also tired of people who don’t seem to know the difference between credit cards and carrying debt. Not only do I not pay any fees or costs for the credit card, they pay me every month just for using the card. People seem to assume that credit cards are a bad thing when, as you noted, when used responsibly they are really much more efficient than using cash. Much easier to track all your expenses.

Reply

TheDerek December 15, 2012 at 11:34 pm

What I did? Bought a house a year ago in a good neighborhood at half the price of what I could have actually afforded. The end result? I can afford be the Jonses if I wish, and I don’t have to extend myself to do it

But seriously, I just graduated college a couple years ago and bought my house a year ago. It bewilders me the things people say they cant afford that I can with no trouble, when they make 5 digits more than me a year. I think people just waste money without thinking about it. Look at your expenses and ask “Do I need that?”. When I’m at the store, if the thought “Where will I put/store this” enters my head, I move on. If I have to ask that, I don’t need it. Groceries? I go on shopping binges and fill my house up, and other than perishables I don’t buy ANYTHING until I’ve eaten every last crumb of my last shopping trip. I take the bus to work and that alone pays half my mortgage. It also helps that since I take the bus, having a car payment is just not going to happen for me. I have a 2001 truck Ive had since 2004 that I fill up every 2 months. I cant stress enough how taking transit changes your lifestyle. Instead of $$$ just being gone, I can put it into my house and have something tangible to show for it.

All that money I don’t waste is currently going into home improvement (99% has been/will be DIY besides the roofer) for 2-3 years, then Im going to save save save and travel travel travel while enjoying a house that I customized to my taste.

This article says “don’t keep up with the Jonses”, but some people just have that personality. I say “Keep non-necessities low enough to live like the Jonses”.

I mentioned the travel, because a previous commenter said that hoarding your money in a savings account is still materialistic. You cant take cash to the grave, so my opinion is to work hard, and have fun with the rewards for doing so but don’t be wasteful.

Reply

monkeyfurball January 4, 2013 at 8:36 pm

“Millionaire Next Door” calls a house a liability, not an asset. A house isn’t a good investment. It really is a money sinkhole. Don’t get caught up putting lots of money into a house. Find an asset that keeps growing over time—-a decent broad based stock or bond index fund for example. My portfolio makes over $200k a year nowadays since it has grown over 25 yrs of saving—and I don’t do anything but watch it grow.

Reply

Alp January 22, 2013 at 11:54 am

A house may be a technical sink hole. Although should you ever be laid off or suffer some other financial mishap, having a paid for house beats sleeping in your car.

I have read Rich Dad Poor Dad, and found it a good read. But having been laid off once with 3 young children and a pregnant wife I will keep my paid for house.
Of course I might need to figure out how to barrow my neighbors utility’s but that is another issue.

Reply

TheDerek January 27, 2013 at 11:58 pm

Most of the work I’m doing is for my own enjoyment; not for ROI. sure there have been a few things that I have done that will have a good ROI if I do sell at some point, but not really anything I have done has been for that purpose.

I bought a foreclosure that needed a little TLC, but the “bones were good”. I didnt buy a big home, and with my mortgage as small as it is, if I do move on to a bigger home, this one will be easy to rent well above my mortgage even in mediocre times. (My plan is to stay here though, but you never know.)

I do see why you say it is a liability though. It has been a shocker to see how fast $10 here and $3 there and $30 there adds up. Some of it could have been avoided if the previous owners werent so obviously stretched beyond their means. Preventative maintenance and good building materials do go a long way, and I will definitely be putting the money in now rather than putting out fires later. For example, I have had to do a lot of repairs simply because the house hadnt been repainted since 1993. Yikes! Also, some of the things the original builder did on this house are 100% SMH. Example: I just paid $1500 to a roofer that for the most part did nothing but fix problems caused by original design flaws. That is money in a sinkhole. Its a plugged sinkhole, and will save thousands of possible damage down the road, but shouldnt have been necessary.

On the other hand, I dont consider putting money into a nice deck and landscaping a “sinkhole” (I do get use out of it before selling). Some people make the mistake of looking at the sell price vs buy+upgrades. Thats what you do when you flip. If I live here for 20 years, thats a lot of outdoor BBQ time that was made comfortable thanks to that upgrade :)

I also consider the work im doing on my home “tuition” in that if I do buy houses to flip/rent out, I will know what I can/cannot do myself (I have learned a ridiculous amount of stuff in the 18mo i have been a homeowner), and I will be able to realistically budget how much things will cost. That alone is pretty valuable, and wont show in the “ROI” should I sell my home.

I do have a good chunk of change in a couple 401k accounts so i do have a nestegg started. I am up for promotion pretty much as soon as papers are files, and my increases in pay since buying are than my mortgage is. Not to brag, but in my opinion I’m sittin pretty as long as I stay employed :)

I did state in my OP that I bought way under budget. Pretty much found the cheapest “good neighborhood” possible. Love it so far! Broken appliance? meh, buy it and its paid for in 2 months. Wanna eat out? I can do that! Vegas trip? easy. Of course I dont have a big house, so some of my freinds look at me like “why?” Well, I have peers that live in 3500sq ft homes and when they complain about their $500/mo utility bills, I just think to myself I can afford a car payment with the difference between mine and his utility bill alone.

I mightve been all over the map, but I basically was trying to say giving up JUST the big house and sports car frees up so much money in the budget, it lets me do whatever the heck I want otherwise pretty much. AND put money away in the bank AND do renovations on my home. BTW I have an average salary level for my age/education level, so I dont have any more money coming in than the next guy.

Reply

mike February 17, 2013 at 3:06 pm

That sounds like a person who knows something. What you have here is the difference between 1960 and 2009 say or about. They tried to deflate BUT deflation is a real thing which means prices for things drop. They haven’t .YET! Will they?
Ask the people you vote for because they are only in it for the money.(paycheck)

Reply

mike February 17, 2013 at 3:09 pm

that sounds like a person who knows something. What you here is the difference between 1960 and 2009 say or about. They tried to deflate BUT deflation is a real thing which means prices for things drop. They haven’t .YET!

Reply

Marq December 23, 2012 at 3:10 pm

I’m 24 now, and I used to spend every dime I made on cars, paint, and rims. But now I save every cent. In 2011 I had no money saved. Now at the end of 2012, I have $41k saved in Walmart stock. My old community calls me Marq the rich guy. LOL

Reply

monkeyfurball January 4, 2013 at 8:39 pm

Good for you. But, having your savings in only one stock is dangerous. Stay diversified. Invest in a broad based low cost index fund or ETF. Split it between bond and stock.

Reply

dalancroft January 30, 2013 at 12:58 pm

Agree with Monkeyfur. Also, split between market cap (large, mid, and small); U.S. and international equities; U.S. and international fixed-income; and add a dab of emerging markets equities. Keep some cash on hand for a rainy day (car repair, emergency dental work, etc.).

Reply

monkeyfurball January 4, 2013 at 8:53 pm

The only way to know if your neighbors are better off than you is to look at their net worth statement. Since that will probably never happen, I ignore my neighbors purchases and money spending. Houses in our neighborhood are worth around $500k in a suburb where the average is $350k. My neighbors all have Acura’s, Lexus, Audi’s, etc. Me? A Honda and a Subaru. They probably make around $200k a year and I’m over $1 million a year. No one will every know what I make because I don’t tell anyone. If I do, people will get weird and it’s not worth it because I have to live next to them.

Reply

TheDerek January 28, 2013 at 12:07 am

Love it lol

Reply

Bill Dixon January 6, 2013 at 6:47 pm

I never bought Walmart, any big box store for that matter. Don’t get me wrong, I built the “nuts and bolts of America fund”, including Apple, Chipotle, Johnson&Johnson, Jacobs Engineering, Johnson Controls, etc. Return is 18%, year in, year out.

Reply

dalancroft January 30, 2013 at 12:59 pm

2007 and 2008? I highly doubt it.

Reply

Shape July 1, 2013 at 7:54 am

It’s easy to make claims on the internet.

I have been investing and get a 200% return year in, year out.

See?

Reply

john wynne January 17, 2013 at 11:59 am

some good advice

Reply

Sparky January 24, 2013 at 5:52 pm

You’re all missing out. I personally am living the dream. I live in a covered alley between two buildings (No mortgage!!). I can steal internet on my Commodore 64 by using the data tape deck as an antenna. I would never waste money on taking the bus. I have a Barbie Corvette parked on the sidewalk that I charge by rubbing two sticks together. I have a thin plastic AMEX card with the name Jack Frost and the account number 1234567890 that I got in the mail. The bodega down the street doesnt have an electronic credit card machine, so they just take imprints of the card. I’m usually able to get a can of beans and an overripe banana every week before they start to get suspicious. I never need to buy clothing, as trash bags work fine – if you know where to cut the holes. At the time I’m writing this, I have $9,124,443 in the bank which I amassed largely through findng change on the beach with a metal detector. I laugh at all of you slaves cought up in the rat race.

Reply

Steve B February 1, 2013 at 9:44 am

Hilarious! The hubris was getting pretty thick in these comments. Thanks for lightening it up. Do you think anybody on here bragging about how much money they have is actually being honest?

The question we should ask ourselves is “where is my money most valuable?” For some it’s spent on shiny cars or in fancy restaurants (guilty here!), for others it’s hoarding it away in equities or other investments. My wife and I are high-ish earners, and we’re committed to experiencing all the great things the world has to offer and sharing that lifestyle with our kids. I have no intention of dying with five million buck in the bank.

Reply

Wendy January 27, 2013 at 12:49 pm

To the man who has amassed 9 million dollars from a metal detector on a beach I say, impossible. Maybe he is telling the truth but I detect an inheritance here.

The author left out the many who have inherited money, large or small. And that is a major way to riches in this country.

I

Reply

Bryanska January 31, 2013 at 4:28 pm

Wendy are you for real, on both your points? The vast majority of American millionaires are first generation.

Reply

Wendy January 27, 2013 at 12:57 pm

I have one more comment: Everyone has something to envy. Why money beats out happy large families; youth and beauty; a creative mind, and all the other good things one might have in life, beats me. Money is so important if you are desperate but there is a middle class in USA and I have never felt envy about anyone’s money as long as I have enough, a roof overhead, food and healthcare, then whatever is left is given to charity. I have no idea why money is the one thing most people most envy. Anyone??

Reply

Kim Bryan June 12, 2013 at 11:23 pm

I’m glad there are still people like you. Not all people have the same thinking as yours. What’s happening right now is that, money is controlling people when instead we should be the one controlling it. Some people aren’t just contented. There is a saying that: “He who is not contented with what he has, would not be contented with what he would like to have”. Everyone has wants, the desire to acquire something, something to prove that they can somehow afford a life of luxury. Some people are just materialistic.

Reply

DW August 6, 2013 at 8:51 pm

because money is a very powerful tool which can buy your freedom if you manage it right (and don’t let it manage you).

Reply

AmericanFool June 12, 2014 at 4:45 pm

Agree with DW. Because I don’t want to be eating dogfood to survive in retirement. Money can do really cool things for you, but it’s a harsh master and I do wonder if the success we’ve had with money was worth the effort. Me, I just want to wear shorts and sandals, be able to buy an MP3 player for my jog, belong to a gym, play sports, mess around on a good computer, travel, have a place to live, study martial arts, buy books, go to lectures and take classes if I want to, and not worry about blowing $100 on a dinner for two every now and then.

Reply

Red_ January 28, 2013 at 8:30 am

I live in what some would call an upscale neighborhood. We found a foreclosure in here and we have family in here. We have been meeting the neighbors for the last 2 years and assessing them as possible long term friends. We have found a small group that are not caught up in the Jones’ race. Admittedly, we do not fit the ‘wealthy’ profile (according to Jones’ standards). In fact, once a month I drive around the neighborhood on ‘Bulk-trash’ day and dumpster dive things that should not be thrown away by the neighbors.

All that being said, last month I invested 24.5% of my income. My wife stays home with our kids and we are debt-free minus the modest mortgage. Now that I have determined the non-Jones’ of the neighborhood, we started a small group that gets together on the weekends to hang out. I’m starting to share with the guys that we save and invest heavily and they ask me for advice on how to get that way themselves. My wife and I are really happy with this group of friends and it was worth sorting through the mass of Jones’ to find like minded individuals to associate with.

I’m even starting up competitions with the other guys on money we invest that we were wasting on cable TV and other non-necessities. My whole point here is that associating with the Jones’ is not always worth your time.

Reply

Mike February 3, 2013 at 9:50 am

It’s up to every person/couple to decide how you want to spend their disposable income. Whether its cars, travel, dining, nice homes doesn’t matter as long as you are saving/investing 15% of your income and not getting too far into debt. Some people will want to work forever and some wont. Just remember that a fair percentage of people that stopped working before 65 did it because they had to for health reasons or something else. Don’t use the excuse of ‘I’ll work forever’ to justify not saving the 15%. I’ve been so lucky to see real life examples of all the reported pitfalls of investing, from not enough diversification to too much stock risk later in life. I have found the conventional advice given in retirement articles to be quite good. Cheers to all.

Reply

Kellan February 6, 2013 at 10:50 am

We’re not rich by any means. We are not even middle class, my girlfriend and me. I’d say we are probably working poor. However, for the past 6 years I did work my regular full time job AND part time jobs (about an average of 12 hours per week part time) and we paid off all our debts from when we bought our house. We chose a modest home in a VERY modest neighborhood, but it’s close enough so that we can both walk or bicycle to work, even in bad weather. We share a vehicle, a 2003 Hyundai that now has 33,000 miles on it. We seldom drive. Paid off the car as fast as possible. Then I wanted to go to college. Seeing how expensive college is, and wanting desperately to get away from my blue collar job that is KILLING my back, I joined the U.S. Army at the age of 36, went into the Reserves, volunteered for three active duty tours and now have the GI Bill for college. I’m back home now, quit my full time job and now go to school full time. We have plenty of money in savings from my “working days” to cover any extra expenses, but we are NOT rich. We still watch our money closely. I’ll probably have to take out a small amount of student loan money somewhere down the road but we are happier than we’ve ever been and more hopeful, too. My point is this: Don’t buy the most expensive home you can afford. Instead, buy the least expensive home you can deal with. Stop driving 20 miles to work. You’d be surprised at how much your car REALLY costs. Ditch the data plans on your phones, go LOW on your data and phone bills. Eat at home. Don’t go shopping at the mall when you feel bored or sad. Seriously, just use distraction and common sense. When we started saving real money (to me, “real money” was $7,000 in savings), we started to dream big. We started to dream of me going to college in a real way. We also pay cash whenever we can, simply because we find that plunking down $200 in cash FEELS different than swiping a mastercard for the same amount. We re-align our wants and needs differently when dealing with cash. Also, we read “The Two Income Trap” by Elizabeth Warren and Amelia Tyagi. Great book. Available at our local library (yeah, stop buying books, too, that helped us a lot). We still have a LONG way to go but we realize we are able to take these risks because we aligned our lives in such a way that they are even possible. We can live off ONE income now, (hers) and hopefully at the end of college, I’ll be able to raise us up a bit more as well. Cheers, thanks for reading. Just our humble 2 cents. :-)

Reply

sks February 7, 2013 at 4:55 pm

This is a really simple concept. Don’t overspend and shop well. Save for emergencies when you can. Pay down any debts you have as soon as possible. By all means, enjoy things and spend money on things that you will enjoy, but only if you can afford them and have simple tastes.

Reply

KC February 17, 2013 at 2:17 pm

My neighbors assume that because I don’t own a car, I’m too poor to bother with. One house on this block is paid off — mine. One person on this block has the recommended six-month emergency fund — me (actually, about a 2-year fund is totally liquid). My one luxury is basic cable TV. I pull most of my meat from the clearance bin for 50% off; that’s $500 a year that I can invest. I don’t go for showy, so the neighbors assume I’m just scraping by, rather than that I’m socking away about half my income for retirement. They’ll figure it out when I’m wintering in the tropics while they’re eating spaghetti.

Reply

larry February 17, 2013 at 7:42 pm

You only FEEL poor if you can’t buy what you WANT. If you live within your income your fine. If you really don’t have enough income for your basic expenses its time to change jobs, change professions, go back to school or get a second or third job. Good luck.

Reply

J February 26, 2013 at 1:47 pm

10 k in da bank. U livin good.

Reply

CeboNathi March 11, 2013 at 3:44 am

I changed employment in 1994 & was paid all my pension contributions in spite of having requested my previous employer to transfer every cent to the new employer. On receiving my payout I transferred it to the new employer`s pension scheme. In 2011 I finally retired and got a nest egg in excess of well over 2 million.

I did not mature my voluntary insurance policies and in five years time when I turn 70 I will be even wealthier. Each & every individual is the architect of his/her miserable or blissful future. I am now well financed and have no financial worries whatsoever.

Reply

DW August 6, 2013 at 8:56 pm

it’s funny. know people who are stressed daily that they are 70 and “only” have $2 million. How much people need to feel secure is so subjective

Reply

B Derrick Radebe November 12, 2013 at 1:43 pm

Subjective or not some people needlessly elevate their standard of living as they grow older. A couple in their seventies can live a happy life and afford basic daily necessities without stressing unnecessarily on a nest egg of two million. I`m talking about people who own a paid up house, a well maintained small vehicle and refrain from luxurious overseas holidays and other excessive spending.

Reply

Johnny March 16, 2013 at 12:48 pm

I have to say after reading all the helpful advice here, that I totally agree with Kellan. I am in my mid 30’s, what taught me a good lesson was caring for my grandma for 10 plus years until she recently passed .
She was a smart woman , saved money for her retirement, had SS and a pension . However , when she became ill only in her early 60’s , and was retired, she would always Bragg how she was ‘ sitting pretty’ .
Well , within less than 3 years her savings was depleted, she needed live in caregivers besides my daily visits . This ate up her 40 years of savings, quickly!
Her SS AND pension monthly checks could not and did not cover the monthly expenses of her home and live in help .
At that point I found myself blowing thru what I had worked so long & hard to save , to take care of her. Finally I took her in with me to live, there was no sense in paying for 2 places for us to sleep in. It saved me so much worry & headache with no more commuting 45 mins one way to care for her daily.
Besides the savings of these caregivers.
My point, it’s great to save! But bad news from your doctor as she got can go from sitting pretty as she always put it, to nothing .
Lots of people ‘ think’ health ins, Medicare etc covers live in help, not true !
Only an hour or two a week of a visiting nurse if you are lucky !
And that does not help a person who can’t even get to the bathroom on their own during the night.
So , glad we are all trying to save for the future .
I just pray we get to enjoy some of it before an illness comes along & away it goes. Although not easy, takes practice, enjoy the now.
As we age , health issues arise & a lot of people think, that won’t happen to me, neither did my grandma. It taught me to be grateful for having enough for the things I need, not the things I want. Bless you all.

Reply

K March 20, 2013 at 6:43 pm

Jonny, you are so right. I am dealing with my 85+ parents on this issue. America is not set up to deal with the elderly. They are truly the throw away generation. Unless you are ready to spend between 4,000 to 9000 dollars a month they will end up on their own or with family members trying to care for them. Medicare only pays for so much and for so long (not long) and Medical provides only if you have 2,000 or less in the bank. Think you will just “gift” your money when you become ill, any money moved within a 5 year period and you will not qualify. I see that most of us will be so proud to have gotten to the end of our lives with a bit of a nest egg and have to watch while we become paupers in order to have a chance of being taken care of. I think most of us have our heads in the sand when it comes to this issue. The Boomers are in for a rude awaking. Our system does not address the elderly.

Reply

DW August 6, 2013 at 9:00 pm

what is so bad about personally taking care of your parents or other family members? Hiring someone to do this sounds like a great luxury if you personally can afford it, but how can you expect that government (which is the public’s tax money) to pay for this?

Reply

Sebi March 19, 2013 at 9:38 am

The best thing you can do is to live in a neighborhood that’s below your standard. That way you will never feel tempted to keep up with the Joneses.

Reply

Mike April 30, 2013 at 8:50 pm

Man I’m so sick of people worrying about how successful others are. Life is tough. You work hard or you fail. Simple as that.

Reply

Keith B. May 13, 2013 at 9:02 am

LOL…. hilarious!

Reply

RD May 15, 2013 at 10:25 pm

I read this piece and felt it was very shallow. It is really just 4 reasons because there are a lot of repeats. There are many other reasons that are very likely in these times that were not even a thought in this letter:
1. They take care of their parents in the home/more work, but more money.
2. They have an Inheritance, Trust or an excellent financial planner.
3. They are successful Stock or Commodities traders.
4. They have an Internet business.
5. They are successful in MLM.

Reply

investment banker June 1, 2013 at 10:56 am

Investment Banking MD here. I typically save 20% of my gross pay pre-tax. So basically make $2M, get taxed 44% (ridiculous) and net $1.12M. Out of that I save $400k and put $250k towards my mortgage. Another $50k goes towards property tax/maintenance etc. out of the $420k left, I spend 150k on a full-time maid, and full-time limo+driver. Another $200k on food/drinks/clubbing/clothes/watches and another 50k on vacations. The last 20k always disappears…

But yea, its tough with that much tax. The gov. just wants to steal everyone’s money. Be smart, set aside the % that goes towards mortgage + savings and spend the rest I think!

Reply

HH June 12, 2013 at 7:36 am

Man, I wanna be that maid. $75,000.00/year would be way more than I make. I am in my thirteenth year working as an educator. I net $2600/month. Tell me what you would do with that RD.
Oh, I also have a child in college.

Reply

RD June 12, 2013 at 8:07 am

To the investment banker:

I would recommend you look for a new financial planner and accountant. I can recommend some to interview. Remember, the long term tax laws favor people at your income level with good planning.

HH- Be creative

Reply

HH June 13, 2013 at 6:18 am

Thanks RD. I actually meant to ask investment banker.

Reply

Shape July 1, 2013 at 7:52 am

I don’t see why any of the reasons have to be negative toward your neighbor such as they are living on plastic or paying for their wants first. Do you really have to put them down to make yourself feel better for your financial choices?

Just because you live in the same neighborhood doesn’t mean you are making the same amount of money, or even close. Even a $10,000 or $15,000 / year income difference can make a HUGE difference in disposable income. It’s the difference between that kitchen upgrade this year or in 5 years. Or that new car. Even in a decent middle-class neighborhood, you’ll have huge income difference. There will be people making $300,000 / year living across the street from the family making $75,000 / year.

Inheritance is also a big one, even a small one of $50,000 can make a difference.

Reply

B Derrick Radebe July 19, 2013 at 12:45 pm

The proven trick is not to spend more than you earn. {2}Get rid of your Credit Card. {3}Do not drive the latest model every 3 years. {4} Do invest wisely over and above your retirement contributions.{5}Don`t buckle under your wife/husbands constant demands for new furniture and appliance purchases. Be able to account for every cent spent & don`t be an impulsive buyer.

Most victims of con artists & scamsters are easily duped because of their constant desire to get rich quick,invest for long term.

Reply

Di August 7, 2013 at 1:42 pm

I’d be happy just to have a steady income. I have no neighbor envy or credit card debt. I would just like more money in the bank and a chance to earn something instead of feeling like there aren’t any jobs out there for me.

Reply

Molin August 18, 2013 at 11:24 am

I’M Poor, PERIOD!

Reply

Mdizman August 18, 2013 at 11:43 am

Poverty is usually a by-product of failure to structure one`s finances accurately. People change employment and fail to preserve their pension accumulations. As the person grows older his/her nest egg is shrinking as some of them deliberately resign in order to access their accumulated pension savings. A well structured company pension only covers 66% of your salary after retirement. It is a must to supplement that company pension by voluntarily purchasing a Retirement Annuity to ensure parity of salary & pension.The world owes you nothing & only you can guarantee yourself a hassle free retirement. Importantly never tell yourself that it`s too early to seriously think about eventual retirement.

Reply

AmericanFool June 12, 2014 at 5:03 pm

It’s scary to rely on a pension in today’s environment. Most companies no longer offer them, and recent retirees have to worry about the company going bankrupt…. yes there is the Pension Guarantee, but it typically comes with a big cut in whatever you were getting. I started at my company with a pension plan. It’s been changed 6 times over the past 20 years. Now…. it will fund about 2% of my retirement.

Reply

Tim June 18, 2014 at 4:57 am

Calculating how much you’ll need in retirement should show you that 66% is more than enough. If your home is paid for-no mortgage payment (25-30% of monthly salary (except ever increasing property taxes and property insurance). No commute costs ($200-$350/mo). No work clothing costs (variable depending on workplace). No lunches out (you have time and energy to cook and fewer dinners out. Slightly higher utilities if you were a 2 person working household and used a programmable thermostat.

Reply

Jones September 15, 2013 at 10:56 am

28yrs old and make $300k year, rent a house and have two cars that are 10 years old paid off. Don’t have a lot material possessions but do have a lot of gold/silver. Economic collapse is coming. The opportunity to buy what is a $700k house today for $400k is coming. I plan on doing that with cash. Let the jones’s have there fun. It wont last long.

Reply

garcinia cambogia trial October 3, 2013 at 9:00 am

If garcinia cambogia side effects you have a high nose or
if they grow so massive that they hinder daily activities.
For me, that means just walking to the end because I will be talking about Garcinia Cambogia Formula today
and finally see the real weight loss results with just HCA dosage.

Reply

Justin October 6, 2013 at 8:41 am

Solutions:

Don’t be materialistic. After your basic needs are met, you don’t derive any happiness or well-being from things.

Spend your money on things that make you happy.

My wife and I earn about $100,000 per year total. No kids. We have MORE THAN ENOUGH after rent and bills are paid.

We drive a 2010 Toyota Corolla. My only material wish in my life is that someday I will own a silver Mercedes. I think they are so cool, but I don’t HAVE to have it. Life will go on just fine without it.

We travel to Europe. We go out to dinner twice a week. We spend time at the beach. We do fun, cheap activities like ghost tours, paintball, walking tours, museum tickets from the public library, watch movies, etc.

Everyone is different. Some of you will have very exorbitant tastes and desires. Some of you will cherish the simple life. None of it is wrong. I Hope everyone gets what they want.

Reply

Katrina November 30, 2013 at 9:24 am

This article sounds like its filled with jealousy. Stop watching others’ gains. Focus on yourself.

Reply

AlphaBear December 15, 2013 at 1:19 pm

Life is not fair.
Try your best not to focus on the things that you don’t have.
Instead, be happy with what you have and enjoy your life TODAY.
There are NO guarantees in life. Life is fragile and it can come to an end unexpectedly.
Don’t waste time worrying about how your parents short-changed you or being bitter that you were not born into money.
I do not expect to inherit anything from my parents and take responsibility for my financial future.
I was angry at my dad after he divorced my mom, and I stayed angry at him until I had my first kid in my early 30’s.
I was mad because I felt like my peers got an advantage over me because their parents saved money and paid for their kid’s college education.
I am still paying off my student loans and now I have a kid that I also have to start saving for their college.
So I got squeezed at both ends. (A poor youth because of my parents and a poor retirement because of my children.)
Don’t do this to your children!
Take responsibility and save for them to have a fair chance to compete with others and get a good education.
I waste too many years walking around with a chip on my shoulder because I was mad at my dad.
Don’t waste your life!
Do the things that make you happy and follow your passions.
Work hard and don’t give up.
Success in life is all about perseverance. They people who live long and prosper do not give up, they do not quit.
Life is a marathon, not a sprint.

Reply

not as it seems March 1, 2014 at 8:44 pm

Everything is not always as it seems people always asume things but there are many reasons why some may have more than others.I have a neighbor or 2 that envy me for no reason.They don’t know that the reason I bought that new car is because I saved for it after paying off my old car.They don’t know that the reason I have another car is because I was done with my last payment of recent and decided it was better to keep it than have a new car payment so I could continue saving.They see me shopping but they don’t know that I shop around to get deals on things that sometimes are or are not new.Everyday is a blessing for the things that really matter my family,health,roof over my head, food on the table and that is why prosperity is there for some of us because we are happy with the things we have.I hate getting the evil eye even when I’am being nice I feel it but I should not have to go out of my way to explain a sale or how hard I saved to make someone envy me less.Having stuff isn’t everything and when I see someone has something new I think that it’s nice that they have it or that they worked hard to get it or maybe not .Maybe they won the lottery or they saved or worked those 2 or 3 jobs.Everything is not as it seems and we all die eventually we will not be taking our things with us.

Reply

Amy March 26, 2014 at 3:53 pm

The wealthy man is not he who has the most but he who wants the least.

Reply

AmericanFool June 12, 2014 at 5:12 pm

Yah… it’s interesting. I’m probably a little bit sociopathic; I don’t have much empathy and while I get along with everyone, I only really connect with a rare few. Even so, the truth of your comment is clear to me – what is life if you have no one to share it with? Friends and Family increase my level of enjoyment tremendously. I read an article recently about the cost of kids….so I calculated the opportunity cost of having our two kids… I lowballed it at $750k and they haven’t even graduated high school yet. Put another way, we could be both retired right now, in our mid 40’s…. but I wouldn’t make that trade in a thousand years.

Reply

RD May 11, 2014 at 7:40 pm

It has been a year since my first post on this article. How has it been? Do you feel more financially secure? Have you saved more? Have you been moving forward on establishing a permanent income stream for you and your family. I have been. I think reducing your required outgo and establishing permanent income (preferably tax free) may not be cool looking, but it is positively life changing. Best to all of you following this article.

Reply

David Ning May 11, 2014 at 9:55 pm

Thanks for checking in! Our family’s finances have grown by leaps and bounds the past year. Slow and steady wins the race!

Reply

AmericanFool June 12, 2014 at 5:23 pm

Interesting. My job is always at risk, but pays well, so it’s carried us for the past 15 years. My wife is newly degreed, professionally certified, and partner in a new and profitable business, so it’s a trade-off. Slowly we’ve been squeezing the expenses, mostly on our real estate costs. Her income has grown, but that is a trade-off on buying into the business at this point – net break even, but it should start generating additional cash flow each year going forward.

Reply

Jay October 5, 2014 at 1:00 am

Has the writer of this article stopped to consider that maybe the owner(s) of the homes with manicured lawns and nice cars are living well below their means and in neighborhoods they could easily afford? Thus making it much easier to spend on frivolous items and upgrades.

Reply

RD November 8, 2014 at 4:04 pm

To Jones,
Now is a good time to buy silver. It may go lower, but some now would be smart. Gold I would wait for under $900 to buy more.

Reply

Leave a Comment