7 Reasons Your Neighbors Have More Money Than You

by Vincent King · 292 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? 

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{ 292 comments… read them below or add one }

M Meagher May 7, 2012 at 8:43 am

The neighbors might also have “backed money” or a trust fund, or wealthy parents. the list is infinite for the possibilities of why the neighbor’s might appear wealthier. It’s a very dangerous to compare yourself to anyone else. Just stick to what you can do and ignore the neighbors.

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Jared May 29, 2012 at 10:05 am

Agreed. This is one of the best posts I’ve ever read. People need to worry less about what others are doing and what they have and concern themselves more with making the best of their own situation. This reminds me of a quote: Contentment is a pearl of great price, and whoever procures it at the expense of ten thousand desires makes a wise and a happy purchase. -John Balguy

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Ferd September 12, 2012 at 7:36 pm

Bravo, M, bravo. ‘Ever read the Bible, Brett?’ ‘Do not compete, it brings only harm.’ – King David. And as Robert Kiyoshi once wrote, the only thing worse than keeping up with the Joneses and outdoing them.

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Anita October 9, 2012 at 12:58 pm

Couldn’t agree more. I think so many people have help/assistance of one kind or another and often neighbors drive themselves to distraction trying to figure it out. You just have to know your own reality and work your best within it.

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SocietysChild October 29, 2012 at 8:21 pm

He has the most who is most content with the least.
– Diogenes

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pitso November 6, 2012 at 9:31 am

the best competitor in life are your goals…..

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Just Saying November 8, 2012 at 10:25 am

They may have more money than you because they are making money under the table and don’t have to pay taxes – bookies, drug dealers, smuggler, trafficker, or prostitute.

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Kit November 10, 2012 at 12:25 am

…or maybe just lawn mowers, car fixers, haircutters, and general overall handymen like my neighbors are. Guess it all depends on what neighborhood you live in…

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viola woolcott May 7, 2012 at 10:59 am

More than likely is that the neighbours do the same. Look out of the window and admire others for what they have. All comes back to the same old thing. We think that the grass is greener on the other side, where we should be happy with what we got. ;-)

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HARISH RAMSINGHANI June 28, 2012 at 11:48 pm

I m 100% agree with your opnion.

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Lance@MoneyLife&More May 7, 2012 at 11:10 am

Great post! Most people don’t think of all of the variables and just see what their neighbors want them to see. Another factor is where you chose to live. Now I don’t live in a slum or anything, but I bought a house in a neighborhood that was way below my max of what I could afford and I don’t find myself having a lot of the “look what my neighbor has” problems.

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Alexis May 7, 2012 at 11:11 am

Funny thing about perception. One person will see a big car and impressive address and think “oh, they make more money than I do”, whereas I think “oh, they want to pay a larger mortgage and car loan than I do – what’s wrong with them?!!!”

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BlackWolfLobo May 8, 2012 at 12:52 pm

I agree.

I look at people with those huge SUVs and thinks “what a waste of money to fuel those things” as I putter along in my 4 cylinder Dodge w/ 3 kids.

Whatever floats your boat I guess…

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Jim August 6, 2012 at 10:32 am

As I drive along in my “huge” SUV passing all those people in their tiny little tin cans I think “why do they endanger their kids – don’t they care about their family?”

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CJP August 6, 2012 at 10:58 am

Funny, I think it’s the idiots drivin’ huge SUVs passing all the people that endanger lives.

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CJP August 6, 2012 at 11:03 am

Oh, and to be clear, I’m not saying that all SUV drivers are idiots. I’m only pointing out the risk to others when you mix the two.

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Jim August 8, 2012 at 9:12 am

No matter what car you drive there will always be 80,000 pound semis on the road, as well as millions of smaller trucks. I choose to keep my family as safe as possible, and the fact that other people chose to drive glorified golf carts makes me and mine all the safer.

simhedges September 30, 2012 at 5:50 am

“In 2006 SUVs had the highest occupant fatality rate of any vehicle type in rollover crashes at 7.77 per 100,000 registered vehicles. This compares with 6.98 for pickup trucks, 3.10 for vans and 3.18 for passenger cars. (Insurance Information Institute)”

RylanG December 10, 2012 at 6:45 pm

The greatest safety feature in any size, make, model, etc. is the driver.

Gregor August 26, 2012 at 10:05 pm

SUVs are built to light truck standards, which are considerably less safe than passenger automobile standards. The safest cars are minivans, followed by large sedans, followed by mid-sized sedans. SUVs are marginally safer than subcompacts, but cars like the Civic and Jetta are safer than most SUVs. Pickup trucks and sports cars are the most dangerous. You may think you’re safer due to size, but actually you’re just a pigeon who’s been conned. Enjoy your $1000 a month car payment and you’re false sense of security. And make sure you make your life insurance policy payment before you hit the road.

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Jim August 27, 2012 at 4:45 am

WRONG. My SUV is far safer than you think for a number of reasons. First and foremost there are situations where I’m safer in my SUV – this is especially true on the California freeways where I see rear-end collisions far too frequently. These freeway accidents tend to be multi-car so you will ALWAYS be safer with more mass around you. My SUV came standard with electronic stability control, side airbags, and other safety related items your tin can does not. I easily afford a $1000 car payment so why does it matter to you what I spend MY money on? Perhaps one day you will be mature and intelligent enough to make your case without resorting to name calling.

Doux September 16, 2012 at 1:11 pm

@Gregor –

Safety is the better asset in the larger SUVs; especially for families. Mostly, they do not rollover as easily due to wider wheel-base than smaller wheel-base vehicles. When SUVs do roll, there is more protection for its passengers. There are many anomalies, but statistically, more people survive roll0vers in the larger SUVs than in smaller compact cars.

ps. I can’t afford to drive the larger SUVs, but I still have to be a defensive and alert driver, no matter what I drive.

simhedges September 30, 2012 at 5:52 am

“SUVs rollover more easily than other types of vehicles-about 37 percent of fatal crashes, as compared to a 15 percent rollover rate for passenger cars. (National Traffic Safety Administration)”

Ed October 31, 2012 at 4:46 pm

Crash a Volvo into a concrete wall…

Crash a Suburban into a concrete wall..

The crash test dummies in the Volvo sustain less injuries.

The problem is, in reality, the Volvo doesn’t hit a wall…

The Volvo hits the Suburban.

Not good for the Volvo.

Bob November 8, 2012 at 2:38 pm

Ummhhh, nope. An F150 would demolish a civic in a head on collision. It is what it is. A semi truck would crush the F150. A train would crush the semi. Weight DOES matter !!!

What do you think the safety standard are in a freight train? They don’t even have seat belts !!

zubeda christian October 21, 2012 at 12:55 am

Huge SUV…Why do they endanger their kids? Think again..see the bigger picture.You’re endangering the world! Think of all that pollution you’re adding to.So apart from the snobbery evident here, possibly the ones with the little ‘tin cans’ are doing you a favour.Use your Brain!

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fred November 16, 2012 at 6:30 pm

iWalk ^_^
I have no mortgage payments and I get good exercise. Sometimes, I ride the bike or use public transport in the city. I pick fresh organic fruits and veggies from our 25 acre hilltop resort farm, located near the pacific coast here in the Philippines. I never craved for gas-guzzling cars, it’s not in our culture. I don’t even know how to drive! ^^
btw, the BUS/TRAIN will crush any SUV’s!

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GMC Guy September 24, 2012 at 11:35 am

How do you fit 3 car seats in the back on that car? Just saying.

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AJ May 10, 2012 at 12:50 pm

Alexis,

I like the way you think. ;-)

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GG June 27, 2012 at 5:37 am

I also like the way you think:) When I see those huge Sub’s I wonder how much money they spend on gas! I drive a Mazda Mistakes. Love it! I get 32-36 miles per gallon and get to have fun while I travel:)

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Joy B June 27, 2012 at 9:06 am

Just read the article….this lifestyle indulgence that people are having an affair with needs to be reversed. It’s called SAVE YOUR MONEY. People need to realize pay themselves first. If nothing else, develop a mentality that your savings account, IRA, or 401K is a credit card debit that has to be paid. Another suggestion: don’t live above your means, don’t live within your means, live below your means. It doesn’t matter how much money you earn annually, its about living a realistic lifestyle.

JB

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Jim August 10, 2012 at 10:58 pm

I love my huge sub. And it’s great to travel in. It sits higher than a car and you can see more stuff, plus my family can bring anything they want. There have been many times while driving cross country that I would have missed seeing wildlife or other stuff had I been sitting much lower in a car. I don’t worry about mileage ’cause I can afford to drive pretty much any car I want.

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Kiwikid September 16, 2012 at 2:03 am

And its centre of gravity is higher which makes it more prone to rolling in an accident or near miss situation. I believe the crash tests show that you are more likely to die or suffer greater injuries in SUV type vehicles. Thankfully, in New Zealand we don’t see to many morons driving Hummers and the like.

Jim September 16, 2012 at 5:16 am

@ kiwichild

Do your research – SUVs built in the last couple of years are safer than cars.

Maganther September 30, 2012 at 9:51 pm

SUVs are a selfish person’s choice, in terms of the environment, air quality, safety for other drivers, space considerations while parking and on the road…..the list goes on and on. Grow up, all of you who drive these idiotic monstrosities.

Stephanie November 23, 2012 at 1:00 pm

I can’t believe how many comments I am reading about what kind of cars people drive. Did we just all read the same article?? It talks about stop looking at the neighbors, and all we are doing here is talking about how stupid/unsafe/unenvironmentally friendly…….(and the list goes on) about different cars people have.

Let’s do the whole world a favor & care less about what everyone else drives. If you think your car is safer, so be it. If you think someone else’s car is a stupid waste of money, so be it. Let’s just focus on our own damn cars & keep our personal OPINIONS to ourselves. I’m sick of reading different car statistics on a blog about money!

In addition, feeling like you need to defend yourself on what kind of car you drive or what type of home you live in is the real foundation to the “comparing yourself to the neighbors” issue. It ends up being your issue, not theirs.

Drew Palmer November 18, 2012 at 7:02 pm

The solution is called one child per family.

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So what? January 2, 2013 at 3:30 pm

One child per family means killing twin sibling, and child growing up without brothers or sisters. Your solution is so simplistic and no deeper thoughts were thought out by you, obviously. You appear as a heathen or barbaric Neanderthal.

Walt July 24, 2012 at 5:35 am

HaHa…well stated and so true. Living below one’s means can give a person a superiority complex if not kept in check. It’s so gratifying being a contrarian and not among the sheeple.

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KM May 7, 2012 at 11:29 am

Yeah, I have better things to do in the evenings than sit by the window and stare at my neighbors’ houses. I don’t understand why other people are so fascinated about “keeping up with the Joneses” or being like someone else. In fact, I sometimes go out of my way to prove to people that I am unique and don’t go along with the herd. I pride myself on thinking differently. And really, I hate manicured lawns. Why can’t people have more natural, uneven lawns that 1) don’t cost a lot to maintain, 2) don’t pollute the environment as much because you don’t maintain them with gas-powered mowers and trimmers as much, and 3) actually look better?

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Rumen May 22, 2012 at 12:27 pm

I second that. There is nothing more boring than a lawn of manicured, uniform grass that looks run-of-the-mill, and runs off fertilizer and insecticides everytime it rains. What is wrong with a natural lawn with wildflowers, butterflies and bees?

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Kiwikid September 16, 2012 at 2:07 am

What’s wrong with natural lawns and wildflowers etc.? Nothing really. Unless your some uppity anal retentive in a Home Owners Association. Unbelievable what power they have. No clotheslines, front lawn is not allowed to have a fence, not allowed to grow vegetables, not allowed…. yadda yadda yadda. Hell if they tried that in New Zealand there’d be hell to pay.

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Jim September 16, 2012 at 5:14 am

No one is forced to buy a home with a Home Owners Association. Anyone who does not like the rules is free to buy elsewhere.

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Doux September 16, 2012 at 12:53 pm

@Jim,

True for most, not for all. I live in a remote area 80 nw of Aspen and during the O&G boom >=2008 affordable housing was far & few between. After the bust, housing values dropped and I found a home to buy I could afford (only) in governed by HOA — and I hate it; that is the HOA part – what a scam! Especially now that the bust created a ghost town, I see no value-added benefit…not sure how to petition to rule out HOA.

But, again, you are right — people don’t have to rent or buy in HOA divisions; else the housing option are F&F between and a person is in pinch. If property values continue to drop over the next couple years, I will move down valley east of where I live now, a great place down valley from Aspen with more perks and beauty then any HOA division offers.

Kiwikid September 16, 2012 at 3:59 pm

True, no one if forced to buy anywhere. But when you have instances of HOA administrators (not sure what you call them in the US) who act like little Hitlers in their little Fiefdoms, well sorry I disagree. If it is a matter of public health then sure have standards. If it is a matter of no you can’t grow vegetables on your front section because we say so, well sorry, what happened to the Land of the Free? Do you think that it is right that someone should not be allowed to have a clothes line to dry their clothes and have to use an expensive energy guzzling appliance like a clothes drier, which also wrecks your clothes?

I agree with Doux, HOA’s are pretty much a scam. Body Corporate’s as they are called in New Zealand have rules, but are also governed by legislation. Of the disputes I have read about in the last 10 years it has been invariably the BC that has lost the court case. And of course everybody loses, coz the BC gets costs awarded against it and bingo up go the BC rates.

robert September 28, 2012 at 7:01 pm

But that doesn’t give the HOA the right to be anal retentive. :)

chokou September 27, 2012 at 1:00 pm

@KM Are you really unique if you need to prove you are?
By the way, why do you have prove to other people that you’re “different”?
Ugh, why not just be yourself while not caring what anybody thinks.

You sound like a conforming non-conformist.

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Dan October 3, 2012 at 9:45 am

I’ve lived next door to a guy that parked his pickup in his front yard and used part of my yard and my driveway to drive off. I currently live next to a guy whose lawn is magnificent.

I like where I live now.

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Kiwikid October 4, 2012 at 8:56 pm

A nice big nail sitting in a strategically placed piece of wood would have stopped that in a hurry… LOL

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shamanic journey May 7, 2012 at 11:34 am

When you look out of the window, do you see the beauty outside or the dirty window. Matter of perception I would say.

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Dartagnon Puissant August 28, 2012 at 2:05 pm

The world is as BRIGHT as YOU make it!

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Jenn May 7, 2012 at 1:53 pm

Keeping up with the Joneses is certainly a trait of our society. I think frugal living is not appreciated enough. Let the neighbors splurge and make smart decisions with your money.

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Kiwikid September 16, 2012 at 2:08 am

Don’t think it’s keeping up with the Joneses. More like “Look at me, Look at me” syndrome.

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Kathryn C May 7, 2012 at 3:51 pm

I read an interesting article on this topic “keeping up with the jonses” It basically talks about why some form of comparison/envy is good. Interesting read.

http://www.psychologytoday.com/collections/201204/keeping-the-joneses/why-you-think-youll-never-stack?page=2

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Slackerjo May 8, 2012 at 4:44 am

I guess this can go both ways. If someone were to look at me they would think I had no money. Why? I rent a 1 bedroom apartment rather than own a house. I ride my bike to work 5 months of the year, yet my car is paid for and works fine. I have not bought a piece of new furniture since 2007 because my building’s freecycle provides me with awesome furniture. I borrow books from the library rather than buy then and stack them in IKEA bookcases to show the world how well read I am. I wear simple clothing that I only update when they fall apart (usually after about 5-6 years).

At the end of the day, I walk around looking at the Jones of the world with a smirk on my face cause I am quietly putting 1/3 of my pay into the bank.

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Staci May 14, 2012 at 5:57 am

If you’re still happy whether or not that money is in the bank, than good for you! I am related to a True Frugal & her bank balance is her security. If the economy blows up and she finds her bank account greatly depleted or empty for some reason, it will probably kill her. Focusing on your bank balance is also materialistic. If you have huge plans for your money, like buying yourself something you dream about someday, giving to a charity, setting up an endowment, then your frugality is awe-inspiring and you are a true giant in my eyes! Money is not the root of all evil, the love of it is!

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bharati June 22, 2012 at 10:44 pm

Appreciate your actions. Agreed one can enjoy many many things which are free, wholesome, kind and healthy. Hope you are keeping your savings safe. If you only buy food that you actually eat and really work at staying fit and healthy, that too helps!

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Judy September 6, 2012 at 3:05 pm

Thanks so much for your post Slackerjo. I am stressing over should I buy a new sofa to replace one I bought just 3 years ago that just doesnt work for me. So comfy but looks horrible.
You reminded me to go looking in op shops and garage sales instead of furniture shops. I will take note of your other habits and expand on that as well . Thanks for the reminder.

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Financial Advice for Young Professionals May 9, 2012 at 4:01 pm

It’s definitely all about perception. There are no secret tricks to saving money, just spending less than you earn, and making wise investment choices. It also depends on the neighborhood you live in. Do you want to be the big fish or the little fish? If you want to make your neighbors jealous, go live in a crappy neighborhood and everyone will look up to you.

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Marbella May 10, 2012 at 4:24 am

Do not be jealous of the neighbors, we all have different conditions, education, inheritance, more economical, or most commonly, the neighbors are living beyond their means and one day, they move to a cheaper area with its tail between its legs.

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Shane May 10, 2012 at 11:05 am

I couldn’t agree with you more. Many people are living on plastic these days and may seem to have more when they really don’t have much at all but debt.

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Jimothy J. Jones May 11, 2012 at 2:44 pm

I think the first thing you should do when considering this list is to understand that your outlook on wealth is probably what leads to feelings of inadequacies about said wealth.
Is your family hungry? Is your family cold? Is your family in need of work? Is your family about to be bankrupted by medical bills? Is your family lacking education?
If you answered no to these questions you should consider yourself wealthy enough and go introduce yourself to the neighbor.

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Free August 16, 2012 at 8:43 am

I fully agree! Occasionally I must remind myself of what is truly important and push negative thoughts of inadequicy out of my mind. Everyone gets “the wants”, but I have realized “the wants” are similar to a food craving–if I concentrate on something constructive the craving passes.

Certainly introduce yourself to your neighbor! You just might find that your neighbor is jealous of you. ;)

*I know I’m a little late replying…

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Canadianbudgetbinder May 13, 2012 at 4:44 am

Great Post,
I always say not to compare yourself to your neighbours as credit can buy you everything but at some point the money has to be paid back. We live in a world where we want everything yesterday so it takes a strong person to wait or save for what they need. Cheers Mr.CBB

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Dartagnon Puissant August 21, 2012 at 2:28 pm

I used to need everything today … but now there is no hurry. And when something arrives at my front door I’m almost always surprised, just like Christmas, and then when I open the box I see what I ordered a week or two before. I have so much to do each day that putting something off for a week is not procrastination but “scheduling”. I live in the desert … when its over 100* outside, things get done when they get done and that is usually in the early morning when its the coolest. I’m starting to say the same thing as the neighbors … “It will get done when it gets done”. No, having everything NOW is not the answer, but living so long that it doesn’t matter WHEN it arrives is my salvation.

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Chef and Steward May 14, 2012 at 12:26 am

This article reads of one trying to pacify covetousness. While it is true that others may be seemingly have more -but only the surface- a bigger issue is why does it matter? The missing reason your neighbours could have more is simply because they do! For whatever reason! They may earn more and in valid and legitimate ways. Do we have to reduce ourselves to thinking the worst of people because they seem to spend more? That is their prerogative! The real issue is how does someone else’s net worth or spending habits affect your self worth? What should really matter is that you don’t get lost in a race that you were never meant to win. ‘Keeping up with the Joneses’ is the elusive dilemma of those who are truly not happy with themselves. Find happiness within whatever means you have. If you cannot be happy with what you have now, even if you land a huge windfall, you will still be an unhappy person with a huge windfall.

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Staci May 14, 2012 at 5:50 am

I couldn’t agree more. Where is all this feeling of inadequacy coming from? Why is it based on possessions? If you can’t manage or be happy with a little, you won’t manage or be happy with a lot. (Gee, isn’t that in the Bible?) It’s easier to rate someone on brand names, logos, neighborhoods, house sizes and diplomas from the “it” school than it is to get to know your neighbors and maybe become/influence a person of greater abilities than without one another. Is it because we live in swarms of people who just breeze past people all day and don’t even look them in the eye – yet we care that they see what brand of shoes we’re wearing or who designed our purse! People want to think that others who have material blessings must be in debt or miserable or somehow worse off than their neighbors. What happened to admiring achievement & having enough self-esteem left after being happy for someone else getting stuff or going on a trip? Rich people still have weirdos in their families, illnesses, challenges, and the same crud that poor people do because we’re all HUMAN. “Human” automatically rules out perfection, superpowers, omniscience, and abundant strength. I’ve learned that’s what God is for. If you choose to live with the attitude of abundance, you will see that there’s more than enough for everyone except the victims sitting around wringing their hands and crying. Everyone has reasons to whine, complain, cry foul, sue someone else, put up the Unfair sign. Only those who want a full life choose to focus on what they have to offer and what they can do about what’s wrong in their lives. Then the overcomers succeed so the victims can point at them & criticize them because the victims don’t have the same stuff/contentment. We are all terminal. What we do with the years we get are up to us, what years we get are up to God. (I’m almost 50 so I feel I’ve seen enough in my life to make these comments.)

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E December 9, 2012 at 6:52 pm

The most sensible comment here. Why not be happy of other peoples achievement? At some point in the past “the joneses”, im sure, have tried accomplishing what they have now. Now, all there is to be seen are the achievements, but struggles are evident if you just look closer. But no need to go there, enough of the negativity. Be confident – not because you have more than others, but because in your heart you know you are doing the best you can in your own lifetime. Everybody is taken so just be yourself. And learn to count the blessings.

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afork May 17, 2012 at 11:48 am

This is a great post and a good article. There are too many posts demeaning the neighbour for “probably up to their necks in debt.” It’s possible that they are, but more likely that they value things differently. Me and my wife love to eat dinners out a lot. Our friends see us as constantly eating out and probably wonder if we are spending all of our money on that, while we look at their big TV and library of entertainment and wonder is they are in debt for that. In reality, they cook almost all dinners at home and we rarely watch movies or TV. It’s all a matter of value and perspectives – especially visible investments versus quality of life investments.

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Truth Sayer May 21, 2012 at 6:29 am

But what if I am truly well off? I can afford to splurge on a sports car, huge SUV, manicured lawns, boat, fancy remodelling of the home, etc and still manage to put 2/3rds of my earnings into my savings accounts for a rainy day?

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Sammie Jo May 21, 2012 at 8:00 am

If you’re truly well off, then have a good time with your money, imo, a person is only truly well off if they can pay cash for everything and don’t owe anyone a dime.

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Truth Sayer May 22, 2012 at 6:19 am

Yes, you have a good point. I have to agree with you on this.

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Kiwikid September 16, 2012 at 4:01 pm

Unless of course they lose their capacity to earn. And/or their bank goes bust etc. You can’t rely on anything these days absolutely. Except death and taxes.

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GMC Guy September 24, 2012 at 11:50 am

Whats the point of having great credit? If you are well off enough to buy a house cash, then I would say good for you. However, if that purchase leaves you with a blank slate in your account, then use what you have worked hard for all these years (Your Credit) to purchase the house. We get up and go to work everyday to make sure we have everything we need. Just because you buy something you want on credit does not make you a bad person. I beleive that there is a happy medium between spending on needs vs wants.

G September 30, 2012 at 8:23 am

In that case, you might be tempted to move to a very expensive neighborhood where housing costs plus keeping up costs are much more expensive, and now you’re in the same boat.

If you don’t move into a neighborhood where the listed purchases are downscale rather than upscale, then you are living within your means.

(The book The Millionaire Next Door had a piece about this–parents who help adult children buy a house pushes them into a nicer neighborhood, but then the costs of keeping up increase and the kid may be worse off than if he bought a cheaper house on his own.)

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David May 25, 2012 at 8:20 am

LOL, Is this what America has come to?! What happened to neighbors sticking together instead of competing? Everyone seems to stick to individualism while they are naive to the fact that a group is more powerful than any one person. Neighbors used to share their knowledge and spent time trying to help each other out, not just try to one up one another. Now everyone pay’s HOA fee’s or covenant dues, feeding the pig instead of taking that money and putting back into their homes and raising the prices of real estate in the neighborhood. Knowledge is power and power brings wealth.

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Dartagnon Puissant August 21, 2012 at 2:33 pm

You’re totally right David, but this economy is binding people together little by little but it is up to EACH of us to do our part … EACH DAY when I see someone in need I help them. I live in the desert so I carry Anti-Freeze and water in my truck and if anyone needs it I give it to them for free. I am ALWAYS blessed by people giving me a hand in return and all sorts of great things happening in my life, but then I have a low threshold of what is fun and exciting. If we EACH fix OUR OWN lives and our own homes we will all be the better for it.

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Stan May 25, 2012 at 10:47 am

Some people make every penny show!

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Arthur May 28, 2012 at 8:31 am

To each his own. “Keeping up with the Joneses” is envy and pettiness at its best. Be happy for anyone, regardless of what they have. In the end “To each his own.”

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Mike Saunders May 28, 2012 at 10:49 am

As a young boy my family was on the bread line, I always wanted a pair a Reebok shoes (1980’s), I started out at age 11 working selling goods at markets, then became a manager at 19 earning $200 a day and selling things through my lounge room of my house collectible SCi Fi sff which earned me good money, I then went on to be a property developer and at 21 became a millionare, now my house is filled with Convertible Rolls Royces (I don’t even have a drivers license), Tiger rugs expensive art, and I wear a Solid Gold Rolex Versace ties (which I don’t even set the time) a draw full of and hand made Crocodile shoes, I am still not happy retired at 34 and have a whole 4 story house full of stuff I don’t even use or need, money earns you respect from others who don’t have it, it is just an illusion

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bharati June 22, 2012 at 10:48 pm

Very happy for you. Please do not buy tiger rugs; the animals die in pain and there are so few of them left. But perhaps you mean something else?

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Peggy July 23, 2012 at 2:50 pm

Perhaps since you are retired and have sufficient time at hand you should enroll in a good institution of higher learning and correct some grammar.

I think everybody has missed the point on this story. We are taught that envy is a sin. You should never begrudge nor covet what your neighbor has.

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Peggy July 23, 2012 at 2:52 pm

I failed to ask and certainly meant to do so–What on earth is a Solid Gold Rolex Versace tie?

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Jonathan July 24, 2012 at 10:03 am

Question – “What on earth is a Solid Gold Rolex Versace tie?”
Answer – The height of vulgarity.

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Kiwikid September 16, 2012 at 4:06 pm

aka a pain in the chest. Imagine walking and with every step, whack, whack, whack.

Personally, the story by Mike Saunders sounds truly bogus. Calling it as I see it, bovine scatology!

Mbane May 28, 2012 at 1:05 pm

I have a co-worker of mine who is my age and does the same exact job as me and gets paid the same. His wife works only works part time. Yet they live in a mansion and both drive expensive cars, wear expensive clothes and jewlery. The math just didn’t add up. Then I started noticing that everytime we went out for lunch he would use a different credit card. Trying to be nosy I than found out that he had a basic internet package and let it slip that he was on basic tv cable as well, yet both of them had iPhones. Trying to pry for more information he let it slip that his morgage was his whole income for the month. With the wife only working 16hrs a week, it became clear that they are living on credit cards. I can’t even imagine the amount of depth they might be in.

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josecuervo August 19, 2012 at 1:16 pm

And sadly many of the rest of us will pay for their follishness (much too kind of word!) in some way or another.

“Comparison is the thief of joy.” Teddy Roosevelt

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Robert Niwa May 30, 2012 at 9:02 am

It’s just very unfortunate that us savers are paying the price for the irresponsible neighbor’s actions. Uncle Sam continues to rob from the legitimate and giving to the fraudulent while enriching a most-fraudulent Congress along the way. It really makes me sick that our “leaders” are nothing but cheaters puerly out for themselves and votes and the heck with the rest. Sorry! Greed is not good as we are finding out. This house of cards is about to suffer a tsunami and I pray for karma.

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MO June 7, 2012 at 11:44 am

Quite a bit of truth to a lot of this. In two houses in our neighborhood that have / or are going into foreclosure, their owners are driving porches, bmw’s, lexus’ right up to the day they have to pack their bags and move out. I don’t get it. Meanwhile I’m still driving my 10 year old pickup truck and have enough cash in the bank to pay off my house if I wanted to, or buy several porsches…

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Kiwikid September 16, 2012 at 4:09 pm

…and the question is why don’t you pay off your house? Interest rate on that must be higher than what you get on money in the bank, surely?

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Joe June 7, 2012 at 12:16 pm

Neighbor borrows thousands, buys Mercedes and 3-story house, defaults on loans, bank refuses credit to me when I need money to fix my leaking roof.

We all affect each other. The bad punish the good.

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HiDenisity July 19, 2012 at 2:31 pm

And WHY should he pay for YOUR leaking roof?? If you can’t afford it, you won’t pay him back and that may be his probllem now, that of others like you who didn’t pay him back. Don’t critisize him for using credit when you critisize him for not loaning you money…

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Um July 24, 2012 at 2:55 pm

I think what he means is that his neighbor foreclosed, dragging down everyone’s property values, preventing him from taking out his own loan to fix the roof.

That being said, even if he were eligible to take out a loan to fix the roof, he would have had to pay back the money anyway. He should have had an emergency fund anyways — if he doesn’t have one, he has no business owning a house.

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Kiwikid September 16, 2012 at 4:12 pm

You should have “read” what he said. Neighbour defaults on loans but the banks refuse him credit to fix his leaky roof. Why? Because they lent willy nilly to all these people who couldn’t afford to pay for it.

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Anett June 8, 2012 at 12:14 pm

When I look out my window, I see the neighbours’ mansion, their new cars, motorbikes and swimming pool. When they look out of their window, they see my shack and my 12 year old car. My view is a lot nicer than theirs :)

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sickprofits June 8, 2012 at 11:44 pm

Thanks Anett, I needed the laugh. I’m the poorish old woman that everyone fears.
It doesn’t help that so many of my neighbors have been so very badly punished by our ugly tax stucture either. The lawyers don’t have a clue on how to fight back, except drink and suck up drugs. The gobbermint is still ignoring US citizens, in favor of immigrants and blacks. For some reason, most people NEVER think about anyone but themselves. Too many immigrants, too many connected into horrendous “health” insurance, too much construction, too much fracking, too much bad transporation systems, bad water, bad nutrition, trash everywhere, too many toys for the kids, too many cars, too much house building, too many family secrets, too many vacations, too much invested in worthless education, stressed on getting that last single dime from the gobbermint.
Get a grip America! Can we put more trust into our white coat professionals? Can we waste any more? Can we hate our neighbors, the poor, elderly and disabled more? I think not.
And the illusion of the elderly? What planet are you from? Ha! Ha! Ha!

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Kam June 13, 2012 at 7:27 am

I truly and strongly agree with you.

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HiDenisity July 19, 2012 at 2:32 pm

Ha ha . wonderful sense of humor and outlook on life.

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Sam August 25, 2012 at 11:00 am

My neighbor see my 2004 Saturn Vue and wife’s 2003 Buick Regal, all paid for. He sees my paid for house. He does complain since I do not fertalize/weed feed my yard. I pay cash for everything, otherwise I cannot afford to buy it. I do not use Credit cards for anything except trips. I put 30% of my salary into a 401k Roth and have built it in 12 years to $750k for retirement. It’s easy to do when you have no debts. I only make around $75k, but with investments I get around $30k in dividends. Everyone looks at my house, cars, etc and just thinks I poor.

My neighbor has a Ferrari and BMW. I hear him talking in the yard on his cell phone with the bank about how he will get them the car and house payments next week. He, his wife and kids all look flashy and great. The kids have distain and look down upon the neighborhood and neighbors since they moved here from their $600k neighborhood when that house was foreclosed upon to our nice neoighborhood with $150k houses. They are not happy.

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Sam August 25, 2012 at 11:12 am

Similar for me. When friends visit they remark about the neighbor having a Ferrari and BMW etc. I just point out that those are the bank cars and house, not theirs. looks are deceiving. My house and cars are paid for with no debt. I just say “Thank you Lord for allowing me to have a good job and the sense to save and invest, rather than spend, spend, spend”.

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Kiwikid September 16, 2012 at 4:13 pm

Epic! Ever thought of going on the Tonight Show as a guest comic? LOL

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Alex June 17, 2012 at 3:37 am

Well, I have sort of the opposite opinion on this subject… The majority of people on here think it’s “wasteful” or dumb to overspend on so called “liabilities.” I think that there is a certain amount of pleasure that comes from the self gratification of buying something that I want. After all, why do people save money? They save money and go to work to collect more money to buy things that they want and need.
Look at the cell phone you have. Is it a smartphone? Do you NEED a smartphone? Walmart has $19 flip phones that also make and receive calls. Is it incredibly self righteous of me to say that I smile inside knowing that you pay around $80 per month for your smartphone while I take that eighty and bank it? The answer is yes. Perhaps you don’t have a smartphone, that’s OK because I could apply that scenario to a countless number of consumer luxuries (cable, houseplants, wireless internet, laptop, or really any item that you own that is not the absolute bare minimum to meet your actual functioning need). You’re going to vacuum your carpeting? Why? It’s so much more economical to have bare plank floors that you can sweep with a $2 broom from the dollar store. These examples may be viewed as impoverished extremes, but consider, if you thought the example of mansion foreclosures with Porsche cars in the driveway wasn’t the epitome of over indulgent extremes, then you must extend that same leniency toward the opposing school of thought (consistency, after all, is the most important characteristic of a strong argument).
I’m 24 years old, do not own a home, I am currently enrolled in a university (pursuing a career in dentistry) that I must finance through loans, yet drive a BMW. Judging? Don’t. My purchase of a $30,000+ car was well worth the opportunity cost for me. That is what finances come down to. If we all chose to live by a minimalistic lifestyle, the economic downturn would be crushing. Now, I’m no economist, but did you know that Americans are actually saving on average 5% more than they were prior to the recession (per Dr. Margaret Morales, Professor of economics, Saint Francis University)? So it stands to reason that a frenzy to save money has led people to hold off on purchases and actually contributed to a decline in the financial health of the economy on a global level. One of my summer jobs was working for a marketing company that contracted through a rather expensive coffee producer. Unfortunately, a large enough percentage of customers could not justify coffee for $9/half pound and the company became so stressed under the financial loss that the marketing was reassigned internally. This resulted in the loss of jobs for 37 of my friends and co-workers. So in summary of this example, the extra 5% in savings resulted in 37 families with one less income each. Ripple effect much?
Much of my post has been dealing with the upper and lower 10% of the bell curve, but I am aware that 80% of people live in the middle. It is understood that one should not buy a BMW or Mercedes if it would seriously impact financial security. I also want to clarify that the examples of cell phones and houseplants (…where the heck did I pull houseplants from in the first place?) were not to imply that people should live in squalor. I think that to contribute to a truly healthy and stable economy, we must save when we need to and spend when we can. When I become a dentist, people may go crazy for expensive cosmetic implants and not be able to afford them except through financing. At this time I can save moderately and perhaps remodel or take a vacation. To my neighbors at that point, I will appear to be richer while they struggle to pay my $15,000 bill for veneers. However, when I’ve exhausted all of the excessive services I can perform for the community and they all have their dental financing paid off, my business may suffer and my neighbors will then appear richer to me. At this point it would be wise for me to save my pennies.
I know many of my points may be extreme (yet valid) and I hope not to put people off to the point of overly harsh criticisms, but just understand that it may be wise for you save at this point; conversely it may be wise for others to spend at this point. Instead of looking out your window and wondering why your neighbors “seem” to have more money than you, consider that for them, it may just be wise to spend at this point. You can’t take it with you, after all.

Best of luck managing your money!

Alex

P.S. Sorry for the novel, just had a lot of ideas to present. I’m not the best writer either :)

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Barbara Saunders June 29, 2012 at 7:11 am

Small point but I don’t agree with the hate for smartphones. I probably use the phone as the phone 3 or 4 times a week. A $19 phone that makes calls would essentially be a wasted $19. The smartphone is a computer. I can – and often do – get paying work done on it, work that would otherwise tie me to a desk and wireless connection or not get done at all.

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Alex July 24, 2012 at 2:09 am

I was being entirely sarcastic there ;-) I actually do have a smartphone and use it frequently as well. I was just playing devils advocate and demonstrating how perspective influences opinions on what money is well spent. For example, perhaps the “rich” neighbors saved for the past ten years because they were dead set on buying that $60,000 porsche liability. Maybe they enter it in car shows and make money off of it the same way one can use a smartphone to make money. My neighbors think I’m rich for my taste in cars, while I think they’re rich because they have a $2,000 riding lawn mower while I mow 4 acres with a push mower. I’m happy, they’re happy (I think), so what difference does it make? Inflation can kill your savings the same way that an accident can destroy my purchase. In todays world, id be more concerned with inflation, or even worse, deflation, than my chances at an accident.

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dr June 17, 2012 at 6:44 am

I think the larger point is to be smart with your money so you can give and enjoy it without stress. Unfortunately about 90 percent of those over 65 are struggling with limitied ss income and have to work. Only about 1 percent are doing well after 65 and 4 percent are doing OK. And dare I say if you don’t have the money don’t buy it. We need to go back to paying for things instead of living on borrowed money. Look at the government and look at Europe.

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Alex June 17, 2012 at 10:25 am

Not trying to incite anything more than friendly debate here, but does this mean paying for a house in cash, buying a car in cash, paying for college in cash, etc.?
If so, I may not be able to buy a house until I’m 65, and may be able to afford a ten year old car. Forget college… However, if everybody lived by this, I wouldn’t be able to find a second hand car, because in order to find a used car, somebody has to buy it new. If only those who could afford a new car in cash bought one, then they would probably try to keep their investment for as long as possible. This means that the supply of used cars wouldn’t keep up with even half of the demand. We all know what happens when there is not enough supply to meet demand. So, that means that most people would have to stay local, further reducing opportunity for employment for people who live in rural and suburban areas (I think this group is like 75% of the country or something like that). Or they could rely on the hope for a restructuring of public transit to make it less of a joke in these areas… hopefully it’s government and not private because the tickets could be jacked up to whatever the company wanted. If it is city or state run, then you can kiss a larger portion of your (not you specifically) already dismal paycheck goodbye, to taxes for the service. By the way, last time I checked, Europe was in at least the same magnitude financial crisis as the United States. (see link http://www.usnews.com/opinion/articles/2012/06/01/the-myth-of-european-austerity). According to this article by US News, Europe has pretty much done everything but decrease spending. Instead they are choosing to increase taxes to lessen the burden on the government budget. Like I said before, increased taxes means less saving, which means less spending, which leads to intensified economic downturn. Unfortunately, What I think this means is that to coax expansionary economic policy out of our legislature, we need to spend spend spend. This does not mean excessive spending from savings, or blowing entire paychecks on a new wardrobe, or using a credit card. The last of which is the worst in some cases. Putting money into the economy is a good thing, taking it out is not. If one puts something on a credit card, he or she is not really supporting the economy as he is simply canceling out his contribution with a debt (e.g. $200 spent at Macy’s on a Capital One card=$200+ for Macy’s but 200- for Capital One. This means that if everyone, and I mean all 300,000,000 Americans put $200 cash (or whatever amount you could safely “waste”) into circulation instead of hoarding it, the increase in business revenue on a national level would almost certainly create tens of thousands of new jobs, generate bonuses to some (who could in turn buy themselves something nice with their fat bonus) and stimulate a positive trend in the economy. Once we have some stability and no threat of national bankruptcy or further reduced credit rating from Standard and Poor’s (even though S&P continues to give our individual ability to pay private international debts a top notch score), we can then focus on the complete restructuring of American private spending and balancing that with a plan for future individual security. I just think that now is not the time to be frugal. Aside from these points, DR, I completely understand your point of view. A physician friend of mine recently purchased a Maserati when she can barely afford a mortgage exceeding $4,300 per month. Stupid, very stupid. I know she can’t afford it, as I’ve helped her with her checkbook. It kind of makes me smile, not for her situation, but because she is a brilliant specialist who survived 13 years of education, yet is unable to manage her finances. Anyway, it is encouraging that there are more people discussing this! I thought apathy had completely taken over our country.

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Fred Flintstoone June 17, 2012 at 8:38 pm

Maybe they are growing high quality Marijuana in the basement and selling it to augment their lifestyle? I know several people who are growing weed in $300,000 plus houses. There is a lot of money in growing weed.

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HiDensity July 22, 2012 at 2:29 pm

That’s a thought, and surely no less illegal than wall street, but again who wants to go to jail, and pot growers are higher on the “Go to jail” list than the white color crooks.

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Kiwikid September 16, 2012 at 4:19 pm

Hah, $300k gets you a modest house in New Zealand. Very modest. Most of those caught growing dope are usually in rentals. That way they don’t have their assets confiscated under the Proceeds of Crime Act.

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swampwiz June 22, 2012 at 4:06 am

You don’t have to pay back what you borrow. There is always Chapter 7 bankruptcy. One could go on a program of spending borrowed money while banking cash in an IRA/401K, and then simply wait for the inevitable layoff to file for bankruptcy, only having to surrender (typically, depending on the state) one year of IRA/401K contributions before the filing date.

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Bud July 31, 2012 at 9:22 am

Quite right. The only reason anybody pays back a loan is so they qualify for a new loan. Your plan, however, might be construed as bankruptcy fraud.

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Kiwikid September 16, 2012 at 4:26 pm

Not to mention totally unethical. It’s these sorts of rules and laws that makes the US an object of derision in many parts of the world.

Walk away from an upside down loan with no real consequences? Hah, here the bank would put the property for auction and if that doesn’t cover the balance of the loan they go to court and have your wages/salary garnished to pay off the outstanding balance.

And no, that was not a slag off against US citizens as a whole, but your country’s laws and regulations. I know many, many US citizens are upstanding and ethical people, but it appears to have more than its fair share or ratbags. Here, our current Prime Minister is a former currency manipulator of one of your biggest financial companies, Merrill Lynch. Needless to say he is doing his utmost to enrich the already rich and enslave the ordinary people on the ground.

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thinkoutsidethebox October 12, 2012 at 9:29 am

The business i just left “closed down filed BR” and in my and others opinion was guilty of fraud and unethical behaviors. AND they got away with it walking away with “millions”. The business and the owner’s perception and pitch to the bank was “you need to give us more money to continue running in this “tougher” economy after they persuaded “stupid” bankers that they deserved a loan to continue to grow the business, the owners and VC’s ended up taking big payments and salaries and gave a few dollars to the new management and continued to take take take till it was too late and the business crumbled beneath their feet ( i believe the bank had to tell the CFO to not allow more withdraws for execs!) . They put little to nothing back into company, at which point the the bank basically said your done we want the money now so you need to liquidate all assets and go out of business. NOW i don’t know all the specifics of the bank terms but it was a loss for the bank even bigger loss if they foolishly hedged any of this (BAILOUT MONEY). All in all the owners walked away with millions and the collateral damage was the workers. We talk about greed gluttony, hoarding, and other covetousness that leads to ruin.. The bank was no different” they are in the business of money now” So therefore the mistakes of 5 or 10 greedy people becomes the problem of 100+”workers” and their immediate families. These fabulous 5 who basically cashed in on the failings of the economy by going bankrupt after they got the bank monies that they did not deserve from a bank that apparently didn’t know the economy well enough probably bcuz of greed and their own “Keep up with the Jones’ mentality” i.e Madoff; AIG;FannieMay FreddieMAC; JPMorgan oops lost 550 billion today no biggy! IT’s a corrupt system !! Hedge baby Hedge” against what?
Against the fabricated perceptions of the business world predicated on bad debt; hedging and other wrong doings to keep up with the Jones’, of the last administrations, and countless other cockroaches we did not see or hear about in the annals of these systems.
To this point; fraud is often government and big business setting rules that make sense for their own best social economic interests and are corporate ratbags themselves in a form of a “Boys club” this may be the new definition democracy in light of the present faces that run it in the name of big business. Oh yeah and my neighbor that hasn’t made a house payment for 9 mos. in a fairly affluent neighborhood well he is in survival mode in that he is the result of another stupid banker’s mistake! so now he is incited by the mentality of the big ratbags and is a trickle down little ratbag that are either jumping on the unethical bandwagon of created by this Selective Socialism serving the super rich elite that are not held accountable to the doctrine of the country’s original founders and forefather’s. Time tore-evalute the money and the leaders worth and change it’before the next century when machines will rule: and rule ” wrongly”, “if we allow them to be controlled by the corrupt powers of this world’s special corporate socialist. Time to go print some money, to pay China .. LOL..

“The only easy day was yesterday” Unless your in the top 10% of the corrupt that rule the other 80 percent.. Wait that’s only 90% .. yeah the other 10% are the militant JA’s or foot soldiers getting paid enough to carry out the dark lords demands, and probably drive SUV’s that pollute the air that will ultimately be the undoing of their children and grand children’s health, not the unlikelihood of their SUV tipping over.. Most SUV’s i see on the road 1 passenger in them. OH for those that don’t believe in greenhouse affects and global warming check yourself before you wreck yourself and the rest. quick check.. 1. start car in garage close door wait five minutes.. are you feeling sick? OK probably not good idea to spew that poison into the air! Wait 2. Check melting of ice cap.. “is it from the car’s “don’t know” but if the oil ran car’s are determined to not help the situation i want to error on the side of safety and use less or none at all in “HOPES” that some smarter people about this subject understand it is not helping to spew carbon into the are in such large quantities..

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lana June 22, 2012 at 9:04 pm

I see loads of neighbors with pool guys, housekeepers, landscapers, exterminators and repair people. My husband and I have always taken care of these chores, except on the rare instance that were were unable to fix something.

Because of that philosophy were are able to have two kids in college, a house paid off four cars paid for and enjoy several trips a year. We live extremely modestly. I am thankful we were able to take the kids to Europe also.

I believe it is completely by the precepts and the grace of God. Debt is a pit. Starting with college my husband and I worked hard to pay as we went. That helped. Hopefully, my sons will graduate with no debt also. The future feels much lighter that way.

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Xer June 22, 2012 at 11:02 pm

I think the bottom line here is SELF CONTENTMENT. Focus and enjoy of what you have and live wisely means thinking of tomorrow, and to keep on looking at your neighbors way of life is unwise for this may lead to envy and maybe you may start comparing your situation unnoticed and this will not offer you any good at all. Work and live not just for today but for tomorrow as well.

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HiDenisity July 19, 2012 at 2:36 pm

Everyone has their own preferences for how they live. What is sad is those who leech live off of others even when they have more.

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Gail June 27, 2012 at 5:14 am

Funny, I have wondered the same thing and now so many homes ate in foreclosure. So thankful that my husband and I enjoy the simple life! Store your treasures in heaven not on the earth.

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ted June 28, 2012 at 9:06 am

Who cares. If you are worried about comparing yourself to your neighbors then just move to low income neighborhood and then you can feel like you are living like a king compared to them if that is all your after.

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PK June 29, 2012 at 8:42 am

You choose to pay for piece of mind.?

Your neighbor might be using a spellchecker or proofreading their article.

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Find Business Partners June 29, 2012 at 2:20 pm

Debt can be the kiss of death if it’s for things that don’t increase in value. Living within your means will give you a greater peace of mind and a better retirement.

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paul peters holland July 3, 2012 at 5:35 pm

The grass is always greener at the neighbors, life is always better there where we are not. Don’t worry, be happy. While your neighbor is worrying about which bill to pay first, your problem is: will I have chicken, roasted duck, turkey or beef tonight?

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Roger @ The Chicago Financial Planner July 6, 2012 at 7:43 am

Great post. Having a lot of “stuff” is not an indicator of wealth, only of consumption. I have a number of clients who live well, but generally below their means. That is in large part why they have portfolios that require the help of someone like me.

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maven July 11, 2012 at 1:39 pm

We “have” more money than our neighbors and are able to pay cash for our daughter’s Ivy League education, because of a million little things that we did when she was little that allowed us to invest for her education. No name diapers, homemade baby wipes, hand-me-downs, thrift shop school clothes, etc. come to mind.

As the saying goes: $1.01 out, $1.00 in, misery – $.99 out, $1.00 in, happiness.

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CJP July 20, 2012 at 11:00 am

To afford your daughter’s Ivy League education is not as simple as no-name diapers and hand-me-downs. Don’t you think most people would do that for their kids, if that’s all it took? Perpective people, perspective …… it’s all relative!

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maven July 20, 2012 at 12:16 pm

Well…it took that and more for us, but mainly it took a long term perspective. We literally were saving for her education before she was born. We have done without ALOT of stuff to pay for private educations for our children (we have 4). I literally have to think twice about buying a soda because it can mess up our to-the-bone budget.

I know that I have the money saved to buy things to keep up with the Joneses, but I choose to spend the money on education. Meanwhile, my neighbor has a new Porche and he glares at me for my 10 yo Ford.

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CJP July 20, 2012 at 1:09 pm

My point was that it’s all about sacrifices, but you need to have something to sacrifice in the first place (i.e. it is all relative). There are many of us that have to make the same sacrifices that you do to just get by in life. Affording our children’s education is way out of reach for many. You are very blessed to have an income to support four children. In my circles, it wouldn’t be a neighbour with a new porche glaring at me!! Ha ha…a 10 year old vehicle is high-end in my neck of the woods. All the best to you…I too, make sacrifices for my child (no telephone, no cable, no air conditioning) so I can afford some simple things for her. I won’t be able to save for her education but I will help her pay off her student debt when that time comes. :)

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buttercup July 11, 2012 at 11:11 pm

Great article. Sounds like New Jersey

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mike July 12, 2012 at 1:19 pm

“They might be making the shallow choice to spend their money on what people can see, while you are spending your money on the life you want to live, both today and tomorrow. ”

Explain how it is shallow to enjoy the fruits of your labor? You are not taking the money with you when you die, that is for sure. There is nothing “shallow” about spending your hard earned money on what people can see.

Paying for juniors University is a handout and teaches them nothing. Retirement savings is a joke as well, as the average male lives to 68. Bank three hundred thousand so when you hit 65 and retire, you are rich until you are dead a few years later – I think not! Spend YOUR MONEY on YOU! and forget what society tells you to do!!!

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Kit November 10, 2012 at 1:33 am

What? The average male lives to 68? What country are you from?

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John July 14, 2012 at 7:02 pm

I don’t have a house that’s a palace – my neighbours houses are mostly nicer than mine. I don’t have a car. I don’t go on holiday. I don’t have a wife or family (VERY expensive!)
However, I don’t have debts or mortgages either, so I don’t care.
I DO have a house (bought and paid for back in 2005 with money I saved by working) which I had repairs done with money I had saved from working, new roof & windows, etc. I also have a raft of savings, a huge collection of silverware, some beautiful jewellery, some elegant clothes and an antique china and crystal collection. Yes, you guessed – bought and paid for.
My neighbours have cars and spruce homes, but they rent their homes or owe money on them, have low-status or no jobs, collect welfare, have families (often dysfunctional) and many are so indebted that they worry about where their next meal is coming from.
I guess I’m doing OK. It isn’t me worrying about money. My neighbours have to. I’m very grateful.

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Jim August 6, 2012 at 10:14 am

Lets see:

No wife, no kids, no car, no holiday….

Lots of silver, jewels, china, and crystal….

Doesn’t sound like much of a life to me – more like Scrooge sitting in his vault….

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Paul September 2, 2012 at 7:01 pm

With the two pieces of coal in the furnace and Crottchett doing the books

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Kiwikid September 16, 2012 at 4:30 pm

Actually, I read that as being that he doesn’t “do” the holiday trick. You know, “Oh I went to Disneyland, and then I went to Phuket and on to Europe” yadda yadda yadda…

I’m sure he takes holidays but doesn’t spend up extravagantly on them on, especially, borrowed money.

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Kit November 10, 2012 at 1:41 am

Actually, I read everything that John wrote as equating to him being gay, not that there’s anything wrong with that, and they are quite the ‘commodity’ in this market of slumping home sales and slouching neighborhoods. In this area where I live, homosexuals moving into a semi-depressed area like the one that John appears to live in is a sign that that neighborhood is sure to pick up, not only in real estate value but also in overall aesthetic.
It be more interesting if we were able to know what John’s neighbors thought when they look at him.

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Cavtrpr July 19, 2012 at 6:09 am

Their is a reason why “envy” is one of the seven deadlies. It can lead to not only your own ruin by keeping up thei the jone’s but political instabilty as well as we take from the jone’s our fair share.

Why are we envious? Simple, evolution. We are at our core apes. Apes are social and political animals that have status rankings. The Alpha gets more of everything, period in exchange for protecting the group. 2 million years ago as now, resources are scarce and the Alphas get a lot of those resources. When resources are scarse apes and humans view the world as a zero sum game at a gut level. At first we try to compete with the alphas. When we fail or feel the deck is stacked against us or the alphas provide little benefits; we get envious of the alphas, eventually gatherup our friends and over throw the alphas if the alphas has failed to protect/benefit the group. Then precess repeats itself.

On modern human society the protect/lead the group function has been devorced from resource allocation. Modern bankers, corporate executives, middle and HR managers, professionals, large and small business owners have lost all trust, they provide little in the way of leadership and zero protection to the group. They also receive and control access to an insane amount resources in exchange for nothing except we get jobs that they can take away at anytime. Jobs that they get rich on (You don’t get rich selling your labor/time; you get rich leveraging other peoples’ labor and time). Fertile ground for envy and anger.

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maven July 20, 2012 at 12:08 pm

Speak for yourself. I am not “at my core” an ape.

I am a human being made in the image of God.

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Kiwikid September 16, 2012 at 4:32 pm

Hallelujah, Praise the Lord. Me Too!

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Cleo July 19, 2012 at 2:08 pm

I never even think about my more affluent neighbors though my brother may gulp at their new sportscars. I’m more concerned with my neighbors who use fans while my ac unit operate noisily in front of their windows and they can’t afford to remove the hyper-rooted tree that the previous owner planted. I worry about my widowed neighbor across the street who probably needs renovations done.

I DO think my frugal and more clever neighbors who drive old American cars and live together as a multifamily are far more intelligent and therefore financially stronger than I am. I regret that I cannot get my act together the way they can.

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CJP July 20, 2012 at 11:03 am

So refreshing to see a compassionate comment being made on these forums. I wish more people were like you!

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Truth July 22, 2012 at 12:41 pm

It could also be that your neighbors are simply more successful than you.

Sorry, had to be said.

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Paul September 2, 2012 at 6:59 pm

Gold chains and Escalades? Or the real truth by seeking the Kingdom?

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Doux September 16, 2012 at 1:36 pm

What does “successful” mean to you? Everyone, I believe, has his/her own way of interpreting success. In past conversations, when I ask this question, most responses do not equate success to owning more material items or making more money.

If I start comparing my lifestyle to anyone else, I will either feel inadequate or in a better place. So, I try not to envy, compare, or spend too much time wondering why my neighbors may be better off than me. If life lessons have taught me anything, it is that “nothing is as it appears.”

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Caliborn July 24, 2012 at 7:30 am

In our case, it’s “when did you buy.” Our children keep thinking the neighbors have better jobs than their dad. Not even remotely true. The neighbors simply paid $100-200,000 less to buy the same cookie-cutter home. So the money we’re spending on our mortgage is money they get to spend on improvements. It may not be the same all over the country, but in California it’s definitely part of the equation.

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OK July 24, 2012 at 9:38 am

People really spend time thinking about whether their neighbors have more/less than they do? REALLY? What a complete waste of energy.

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Jonathan July 24, 2012 at 10:09 am

Not necessarily. If they have more, you can learn prosperity-encouraging behaviours from them. If they have less, you can learn what mistakes to avoid. However, it must be done from a position of no envy and no snobbery.

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phurface July 25, 2012 at 9:23 am

A wise man once said “After a while, you may find that having is not so pleasing a thing as wanting.”

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Thami Luke Mabaso August 1, 2012 at 9:44 am

I love this article because materialism seems to rule lives of many people worldwide. Materialism is commonly sought as a shortcut to to happiness. Success is defined by the exotic toys we drive, the mansions we live in, designer clothes we wear and other luxuries. Research and experience have proved that materialism does not bring happiness. Success is also not defined by materialism but by being content with what you have, being at peace with yourself and others, living a happy life other than worries of things that do not add value in your life, knowing your purpose in life, enjoying your journey in realising your full potential and most importantly giving from the heart and not for publicity.

I would like to point out that there is nothing wrong to indulge in luxuries if you are truly successful (having built assets, money working hard for you and giving from the heart). It is also not necessary true that all people who indulge in luxuries are spending beyond their means because some are trully successful. If you identify a trully successful person by what I mentioned above, do not be shy to seek for practical guidance on how to improve your life. Your neighbour may be such a person, so do not put everyone in one bracket because you may lose the opportunity to be empowered.

In living your life, you should not do things to impress others or compete with neighbours, friends, colleagues and relatives. Live your own life and seek for advices from those that you admire to help you in your journey to realise your full potential…www.khalulumarketing.blogspot.com

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cherry October 31, 2012 at 10:08 pm

I like your comments, it’s absolutely right.

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John August 2, 2012 at 5:45 pm

How true. I worked in investment banking for many years, and am now retired, living of my investments. Instead of pouring money into pension ponzi schemes, i decided 20 years ago to invest in property. This will not die with me, and my family will subsequently benefit for their lives and their childrens lives, if they manage the portfolio well. My ex-colleagues (most of whom still have to work) have new cars, expensive holidays, extortionate rents and little or no savings. When they reach their fiscal cliff, I hope I will have enough self-control NOT to say “told you so…”

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Ulysses August 3, 2012 at 3:44 pm

In any discussion about saving, the first question that should be asked is what is it that people are supposed to save and why?

Since 1971 when Nixon trashed Bretton Woods, the U.S. dollar has lost 90% of its purchasing power and the trend is continuing because the fiat currency is seeking its logical level, i.e. zero, no matter how much smoke and mirrors the economists resort to in order to perpetuate the myth that zero is worth something.

Since 1987, after Reagan appointed Greenspan to replace Volcker’s strict financial policies with ever-dropping interest rates, it has become nearly impossible to earn a decent income out of one’s savings.

And then one also has to pay taxes on what is left.

All these factors have made saving meaningless, foolish and dangerous even.

To top it off, after causing the housing debacle by the same near-zero interest policy, the government jumped in with both feet first with TARP and now with principal reduction plans like HARP which basically sends the message that spenders can be as irresponsible as they want and the government is going to bail them out with the money of other people (i.e. savers) who behaved responsibly and are now feeling like fools.

In other words, in today’s atmosphere, people have no choice but to be irresponsible spendthrifts because being otherwise would be stupid.

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Free August 21, 2012 at 7:38 pm

Absolutely correct! There are no consequences for being irresponsible with money.

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John August 3, 2012 at 6:53 pm

Excellent summary, Ulysses. Today’s investments (for all but the very short term) are all about a search for yield, often in markets where that yield is very illusory. Buy something tangible, that you can use, that will grow as your family grows.

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C Smith August 8, 2012 at 3:31 am

There are seven reasons why I have so very much more money than any of my neighbors.
1. I’m smarter. 2. I had a better education. 3. I achieved more qualifications. 4. I’ve got a much better job that pays better. 5. I work far harder. 6. I work longer hours. 7. I don’t waste money.

I’m moving now to a better area and where there are fewer whinging poor people.

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Paul September 2, 2012 at 6:55 pm

Kind of like Lazarus begging for crumbs. Those poor people just don’t measure up to Mr Smith. LOL you don’t own it Jesus does and he can take it away.

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Alkoholik August 9, 2012 at 12:17 pm

I know why they have more money.I go to bed with my neighbors wife at least twice a week at $100 a shot.

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Kiwikid September 16, 2012 at 4:36 pm

LOL, still cheaper than getting married they tell me…

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Jim August 14, 2012 at 7:55 am

7 reasons I have more money than my neighbors:

1 I sacrifice far more than they do.
2 I live in a tent. In Afghanistan.
3 Much of my government contractor income is semi-tax free.
4 I started buying real-estate 20 + years ago.
5 I buy only new vehicles – and drive them 10 + years.
6 We paid for my wife’s education as we went.
7 My wife makes more than I do.

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Doux September 16, 2012 at 12:55 pm

The rule of 7 is a great plan — flexible too.

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Dartagnon Puissant August 21, 2012 at 2:22 pm

Ever since I heard the Dali Lama say that we can all be millionaires … its all relative, I have changed my stance on everything. When I want, I have freshly ground coffee from India in the morning, cut my own hair each day or never, keep my vehicle happy by changing its oil regularly. I have good tires on my vehicle, it runs great, (thank you Universe), the roof on my house needs attention but the USDA is considering giving me a grant to cover the costs. I have found that Dire Poverty is really not that bad and it puts me in contact with my inner self, teaches me to appreciate the friends I have, and realize how kind and loving our society has become. I help others every day in exchange, carrying water and anti-freeze, giving it out freely to those in need, and if someone needs a hand loading a mattress or something I will actually stop and help whenever I can.

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Free August 21, 2012 at 7:33 pm

Sorry, but you lost my vote when by saying, the USDA is considering “giving” you a roof. That’s welfare, and it is funded by hard working tax payers. Drink your gourmet coffee, volunteer whenever you like, but get a paying job so you don’t leech off of the working class. Get home owners insurance, pay your deductible and pay for your own roof. Relish your poverty, I don’t care, but don’t be a leech. If you can pack around antifreeze you can provide for yourself instead of relying on the rest of America to do it.

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Dartagnon Puissant August 27, 2012 at 2:11 pm

Nice thought FREE but when you have worked for 60 years and paid into the system all the way through and paid for you when you were growing up, I only feel that its an Earned Reward when the government WANTS to restore rural America. I have insurance but the flakes refused to cover it. That’s another battle.
Plus, the fact that I am disabled has a bit to do with it as well. But you’re young and into yourself and not worrying about others. But when you get old and want to retire I hope some whippersnapper comes along and calls you the leech that you are for trying to take advantage of some of the perks of being an American and working hard all your life. But then the way this country is going, I doubt there will be anyone there to help you like there are to help me. Good luck with that! Thanks for your comment.

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Kiwikid September 16, 2012 at 4:38 pm

Sorry, but I think he was taking the piss out of the whole commentary here. Chill out sunshine, chill out.

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A.R.Shams August 22, 2012 at 7:08 am

What I do to live a contented life for health, happiness and longevity is that I spend what I can afford easily ignoring what others do around for a luxurious life. More importantly, I keep my look on those who are less fortunate than me having far less than what I have while find them living happily. Looking towards upward people having too much to live like a king being extravagant is totally against my principle because I have observed people like them ultimately suffer economically, physically and mentally and then their next generations to live mostly hand to mouth.

Do I do exactly right?

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A.R.Shams August 22, 2012 at 7:47 am

Well, being rich is not a crime if it is attained honestly and persisting hard work and proper planning. Whereas, in this world of competitive living most rich people become rich mostly through various unfair means except a very few, which is totally immoral.

I rather would prefer living in a moderate manner of living trying to add my income in a sociable way, not being capitalist minded because most of the later ones grow rich to richer to afford luxurious life earning through usurping less fortunes’ haves and that’s the tendency of capitalist minded people or nation / country.

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ann pindder August 28, 2012 at 1:11 pm

Some people can afford the finer things in life, plain and simple. There are just too many that automatically assume those that have luxury goods are deeply in debt. Let’s be honest, there are many that have a “sour grapes” attitude and bash those that have lifestyles they can’t afford. If you can’t afford it or if isn’t your thing, fine. Don’t demonize those that can. What you can afford is different compared to someone else. If they can afford to enjoy what they have, there’s nothing wrong with that. There are those that need to be frugal. But some are fortunate enough not to have to count every penny. It’s easy to be self righteous and assume. Judging goes both ways.

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Dartagnon Puissant August 28, 2012 at 2:02 pm

Ann Pindder you hit the nail on the head. We all are not on the same level but that doesn’t mean that we can’t ALL have fun on whatever level we are perched. Do what is right for YOU and don’t worry about “the other guy”. We all have our own little way of “being rich” in our worlds.

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herald August 30, 2012 at 6:09 pm

Great read. Rather than keep up with the Jones’s I’d rather slow down so that those below me can keep up.

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Dan November 30, 2012 at 8:53 am

So the idea would be to race humanity down to the lowest common demoninator? No thanks. I’d like to think the average of humanity is more ambitious than that.

I’d rather put up with paying for the handouts given to those below than sitting around waiting to drop to that same level.

-Dan

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Bill Dixon September 6, 2012 at 7:52 am

My Dad had several rules of thumb regarding money and investments, which I live by today. Numbers four and five are “everyone spends their money differently”, and “anybody can carry paper”.

A couple of things that I have added to these good rules of thumb over the years is not to let anyone know that your house is paid for, and that you have several investment properties. How did I accomplish this? Easy, I wrote a ten-year mortgage on my primary residence in May, 1993, when paper was cheap as it is now.

Later on, I started picking up bank owned properties, rehabbing them, and renting them as HUD Section 8 properties, gauranteed income.

Maxing out your Roth IRA is a no-brainer, anyone who doesn’t take advantage of this investment tool is foolish. I have watched dozens of corporate 401K’s evaporate in recent years. I do a lot of training inside my Roth and the gains have been consistent, and it’s not taxed. My Roth IRA is actually going to own my next investment property.

Lose the plastic, period. If you are carrying credit card balances month to month do whatever you need to in order to pay them off. Thus endeth the lesson.

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maven September 6, 2012 at 9:52 am

Great advice, Bill.

I own a rental property over 800 miles away in Oklahoma. (There was nothing under $50K available where I live now, so I bought this house for cash in my old home town.) I hired a professional property manager, and on average, for the last 3 years, I have netted a 15% return on the money invested. I am very happy about this and am looking to add another property.

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Kiwikid September 16, 2012 at 4:41 pm

One of the big benefits of being rich is of course all the “friends” you suddenly get. And how you get to feed their lifestyles with loans they never pay back. And then there is your friendly neighbourhood gangs who will rob you, in the name of financial equality of course.

Ah, bless me, think I’ll just stay with my modest house and lifestyle. Seems a lot less hassle all around.

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John September 19, 2012 at 11:21 am

You forgot one big item. At least one of my neighbors has a trust fund, and while not huge, it makes a big difference in everyday expenditures. Most people would be surprised at the number of people who have some addtional income coming in the door each month from someplace else.

As we say, lucky sperm club.

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bob September 24, 2012 at 12:09 pm

Maybe your neighbors just make more money than you.

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Honda Lover September 24, 2012 at 1:37 pm

Life is all about perception. Sometimes people just want you to think that they have money even though they only have $10 in their bank account (those people have big egos). For example, they’ll max out their credit to show off their luxury car, nice brand name clothing, and their Pottery barn furnishings. These people usually live paycheck by paycheck to keep up that lifestyle, and I think you can pretty much tell when you are dealing with these types of people. Like wait a minute, you work at McDonalds and are driving a Cadillac, riiiiiiight….So anyone can afford nice fancy things it just depends on whether you want to be broke and live paycheck to paycheck (those that think life is too short) or save your money (those that think how the hell will I survive when I retire). And some truly can afford the luxuries in life. At the end of the day whatever is in your bank account is all that matters, so keep on trucking.

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GMC Guy September 25, 2012 at 7:15 am

Just Saying! Has Honda Lover ever stepped into a GMC?

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Byron September 25, 2012 at 4:53 pm

2 reasons the author tricked you into reading an article that should have been named “7 Reasons Your Neighbors Appear to Have More Money Than You.”

1 – he thought you’d be more likely to read it under the trick name
2 – he thought you would feel better about yourself if he told you that your neighbors are really just as broke as you are instead of telling you 7 hard truthful possibilities:
1) Your neighbor might actually save some money by exercising self control
2) Your neighbor may have invested more time/money in education earlier in life…the stats say those with a college degree make more $
3) Your neighbor might have had parents who set them up better with education, businesses, assets, etc etc
4) Your neighbor might be wiser than you…pure brain horsepower is great, but wisdom is better
5) Your neighbor might take more and better calculated risks than you
6) You may have settled for a less lucrative job because your values were different…e.g. you wanted to make the world a better place and teach kids art and reading, while your neighbor said, “Screw it!” and went to law school – sorry, but it had to be said
7) And a two-fer…your neighbor played the lotto and got lucky, or conversely, you went to Vegas and didn’t!

As someone else said way up above in the comments, the reasons your neighbors may actually have more money than you are endless. But don’t be envious of them until you’ve walked a mile in their shoes.

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gcatco September 25, 2012 at 7:40 pm

This is the most ridiculous article I have ever read. Who care what your neighbors are doing and how they live. Just live your own lives based on your own means. Talk about worrying or wondering about things that is so out of your realm of control… Waste of energy!

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jam September 26, 2012 at 12:25 pm

The neighbors are smart and I’m the dumb one. When they retire they won’t have any assets and will get full social security and benefits for not having save. However, I will be penalized for having saved by being means tested for evereything. I will be told I make/have too much and therefore am not deserving of any help. Who will feel foolish then?

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Hardworker September 30, 2012 at 10:08 am

I think this article has some good points, however, the article is filled up with repeat after repeat. Instead of the repeats, how about helping the reader do more and truly find happiness. Read up on great successes in great books. Books such as, “Think and Grow Rich”, Swim with The Sharks”, and anything from Tony Robbins, Zig Ziglar, or Mark Victor Hansen. Then go out and do it, work smarter and be more creative. Remember this great quote, “you can help the poor a lot more when you are not one of them”.

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WD September 30, 2012 at 12:14 pm

Great points “hardworker”. I take it that you have read those books and you probably give back to great causes. Planning for uncertainty in life and helping others is very rewarding, showing others how they can do it to is even better.

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RagDoll October 2, 2012 at 8:10 pm

I was raised in a 10 x 50 trailer home. And it was a home. To this day, I hang out my clothes. My babies wore cloth diapers. I used to have a nice SUV. Glad I don’t now, due to gas prices. My carpet is 15 years old. I just keep cleaning it. The highlight of my life is going to my elderly dad’s house and cleaning it and keeping up his dr. appts. I make an extreme effort to realize he won’t be here forever, so I may as well enjoy him while I can; and although I spend a huge amount of time on his well-being, it could be so much worse. No, I’m not keeping up with the Jones’s. In fact, my home in my subdivision is probably the least valuable. And yes we have the neighborhood ‘sheriff” who has done some pretty deplorable things to one of my neighbors. The people in the subdivision are quite a snooty lot. But, I love the house and yard. I’ll never concern myself with keeping up with them. I’m a lot more worried about my aging family, and the quality of life for me and mine. Who has the time or energy to keep up with other people’s business? I don’t. And I really appreciate it when they stay out of mine. I sometimes fear I have a “poor mentality”. But God help us, we all have our faults.

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Joe October 3, 2012 at 7:46 am

Keeping up with the Joneses is a losing game. I work with people that make the same or less than I do, but live much more extravagant lifestyles. They have bigger houses, fancier cars, and take exotic vacations.. and they’re broke. They just don’t know they’re broke. They don’t contribute to their IRAs or 401(k)s, they don’t have money set aside for emergencies, and they’re in debt up to their eyeballs. I live a much more modest lifestyle, but I max out my 401(k) and IRA every year, I have 6+ months of living expenses in the bank, and no debt. I don’t envy them because I sleep like a baby every night.

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Chris October 3, 2012 at 11:43 am

I like to live in the happy medium. My wife and I have a nice but not extravagant home. We take trips that we save for and usually during the ‘slow season’. We have savings. She has a 401K and I will have a pension. We don’t have credit cards and definitely are not keeping up with the Jones’. We both have older used Lexus luxury cars. I’ve had mine going on 12 years. Hers for 4. We bought them used for half the price of a new one, and keep them for the long haul. And these cars a damn reliable! We have a high end leather living room set I bought off some rich guy in a moving sale for $600. I bought a nice almost new jetski at the end of the summer because someone was ‘dumping’ it because they wanted to buy a snowmobile. I have bought so many high end nice items for a fraction of their cost because I bought them used in yard sales, craigslist, ebay, or off friends who were ‘upgrading’. I’ve even gotten stuff free, like firewood! I think we live the good life, and we are middle class people. We give the impression of being well off, but we’re just good savers and good shoppers. That being said, we have never bought any big ticket item brand new. We have friends up to the eyeballs in debt with all their possessions. Alot of them are good people and good friends, just poor managers of their money. My friend spent $45,000 on his brand new Infiniti G37, which he plans to keep for 10 years. I’d rather spend $22,500 on a 2008 Lexus with low miles….and drive it 10 years or more. $22,500 will get me what, a brand new loaded Toyota Corolla? I like my 1998 Lexus LS400 better than most new cars for sale right now. It’s all about choices.

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Juwan October 3, 2012 at 7:32 pm

The 8th reason is that you are wasting your time on the internet reading useless articles while your neighbor is busy working and making money.

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John October 4, 2012 at 2:13 pm

Divorces are caused by this misperception, greedy spouses

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Romeo December 10, 2012 at 11:16 pm

so true John

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JoJo Biggins October 9, 2012 at 8:56 am

Yeah, well you can’t discount the possibility that maybe the neighbors just have more money than you do. However, I do have the situation in my neighborhood with one family in particular where they have better cars, a more lavish house, and their kids have all the latest toys… But, there’s no way they have more money than me. I live below my means and don’t display my wealth.

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Barrett October 10, 2012 at 2:36 pm

Not only are SUVs causing a higher carbon footprint due to their excessive fuel consumption, but as mentioned earlier there are light passenger vehicles with 5 star crash protection ratings. So basically you say you protect your family because you drive a car with more mass, and you have airbags and little electronic devices that protect you from harm? I rather think you enjoy the idea of looking down on people from your huge vehicle, maybe you think bigger is better? My family and I drive a Vauxhall corsa, £60 fills the tank and I could probably do double the mileage you can, should I be in a collision I have airbags that will deploy (just like you do, imagine that!!) You suffer from a fantasy world that society has created that materialistic things show wealth, I look at my neighbors, they have expensive cars, designer clothes,etc but I never see them smile, I believe that my wealth is the happiness that my family and I have. We have 3 meals a day, stay in one of the most beautiful cities in England, my family have everything they need, and i have no debt.So you say the most important bits of life are what people can see, I beg to differ, we are happy with the simple things, and maybe some day when you are faced with a situation where all you have is your family you will understand that all the other stuff is just fluff.

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BAZ October 11, 2012 at 11:01 am

Jim sounds like a pretentious P**** to me!

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stump October 14, 2012 at 4:32 pm

Agree. He’s just a troll on this kind of site. Treat him like the kid he is and ignore anything he says. It just gives him fuel.

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B Derrick Radebe October 15, 2012 at 4:37 am

In South Africa we have a problem of television soaps promoting a lifestyle which is beyond the means of ordinary people. Add to that the proliferation of unsecured lending and one senses a timebomb waiting to go off. At the end of the day it is the individual who is responsible no one cannot blame external forces for ones financial woes.

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Romeo December 10, 2012 at 11:14 pm

I aggree with you

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Serge October 15, 2012 at 3:17 pm

Oh come on. I’m much wealthier than my neighbors, quite simply because I chose to buy a townhouse below my means. There’s always a bigger and better place, but it means there’s always a smaller and cheaper place that will be enough for you. If our happiness is so dependent on how much above the pile we stand, just choose the lower pile. You’ll be happier long term. I know I am, and as an additional bonus I sock away much more for my retirement.
I’ve always been a contrarian, though.

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Judy October 16, 2012 at 6:18 am

Fortunately, in the US there is less envy and so less fear of envy, than in other countries, I think. This allows people to take initiative, achieve excellence and enjoy their goodies, without feeling the need to hide their assets, for fear of arousing envy in others. Envy is a sour feeling but I have known (envy-ridden) people who do try arouse envy in others, perhaps being, among other things, envious of their peace of mind and wanting it to be as sour as their own. But envy is a big waste of time and takes your eye off the ball, which is your own life. So while you are watching what your neighbor is doing, you are not thinking what you could be doing, to make your own life more interesting. So the 7 reasons why people indulge in envy (watching others lives instead of inventing our own):

1. Don’t want to take responsibility, for own life.
2. Don’t want to take risks, with own life.
3. Don’t want to be judged, for own decisions, actions taken.
4. Don’t want to have to come up with ideas, on how to live life.
5. Don’t want to do the work, to get the job done.
6. Don’t want to look in the mirror and see oneself, come up short.
7. Do want to intimidate other guy from taking initiative and doing something with his life, because that would make us feel bad for doing nothing with our own conclusion: envy is just sloth, soured.

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JAYHAWKER October 17, 2012 at 5:17 pm

Next time you small car owners need something heavy hauled, towed or transported don’t ask your (gas guzzling) SUV or pickup owning friends or neighbors for a “favor”. That would be hypocritical on your part.

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Joe M. October 19, 2012 at 1:25 pm

I’ve been out of college for over a decade now. I can almost guarantee that some of my buddies are still paying for their TV’s, stereos, and couches they bought on credit years ago.

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Dave Morias October 24, 2012 at 11:45 am

When the flashy people take out their roll of money they have the big bill currency on the outside; when the millionaire next door takes out his wad of money he has the small bills on the outside.

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Jake October 24, 2012 at 3:54 pm

With QE3 you better not be saving your money in cash or cash equivalents. Real estate, not the stock market or the bank, is where you should be investing your money. Hard assets will rise with inflation and borrowing money right now is incredibly cheap. Borrowing 30 year money at 3% is the bargain of the century. 5 years from now you will be kicking yourself you didn’t buy more real estate when the inflation rate kicks up and interest rates return to 8% or 10%. So when you look at that neighbor whose moving to a bigger home and taking out a big mortgage to do it – as long as he can afford it-it makes perfect sense. The Oracle of Omaha is buying every bit of residential real estate he can get his hands on. The professional investors know it and you should get smart to it as well. Take advantage of the benefit of low long term interest and depressed values today and hedge the long term inflationary trend – you will be glad you did.

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Bartgen October 25, 2012 at 5:45 pm

I am a lawyer who works for the government and earns a decent salary, but not what my private practice friends make. My wife, who “pre-kids” was a computer network specialist hasn’t worked outside the home for 18 years to be available for our children. I live in a modest house, drive a 14 year old Saab, have a 6 year old Honda minivan and no debt other than a mortgage that will be paid off in 6 years. The reason I don’t have a new BMW is because I give 10% of my income to my church where everyone in my family serves, and save another 9%. I will help my children pay for state college; but they will be responsible for a considerable portion. I will loan them the money to avoid usurious private loans. I am happy for my friends who have newer and nicer and when they invite me over, I tell them that. I follow the advice of Dave Ramsey and Susie Orman and make my sons watch and listen with me. I am content and sleep like a baby. A 7 series Beemer would be nice, though…

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Romeo December 10, 2012 at 11:09 pm

Bartgen
I am really so inspired, what a possitive message. You are such a good example……

God Bless

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Nix October 31, 2012 at 5:27 pm

If you are the nosy type who is always looking at what your neighbors are doing for signs of their social/wealth status, then you are probably the same kind of person who would over-buy more house than you can afford in a wealthier neighborhood than you belong just to increase your appearance of being at a higher social/wealth status than you really are.

So yes, if you are the type to notice this stuff, then you probably over-bought and are the poorest person in a nicer neighborhood than you belong, surrounded by folks who don’t worry about status as much as you do, and who bought a house that reasonably fits their budget. This allows them to spend more money on all those things you notice, because they bought on affordability, and not because the were so worried all the time about status like you are.

So keep faking it ’til you make it, and eat baloney sandwiches in the dark where nobody can see you, while leasing a luxury car so everyone thinks you are ballin’

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carlos November 6, 2012 at 9:53 am

Why don’t people keep their eyes on their own lawns and own problems instead of worrying about what their neighbors are doing.. that’s called being nosey.. if you want awesome cars and a nice house dont’ have kids and stop eating meat you can save a ton of money and go green bitch!

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Sarah November 20, 2012 at 1:42 pm

BEST REPLY EVER LOL

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Nirmala November 7, 2012 at 8:52 pm

It is human nature to compare and compete. Some of us may be mature enough to realize the futility to compete with our neighbors in splurging. But many, specially Girls and Ladies have this urge to buy things that their neighbors own. Some Ladies make their Husband’s life miserable until they get what their neighbors recently bought. Often novelty of the purchased item may wear off soon. I have observed while buying clothes that people usually long to buy what someone else may have selected. If one could be content with what they have, we could have more peace co-existence around the World !

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liz December 6, 2012 at 11:37 am

i think your absolutely right!

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tbose November 8, 2012 at 4:32 am

Never check your neighbours and think they are better.My neighbour has better cars and clothes than me but when we talk,it is clear he is in more financial trouble than me.When I braai/barbeque every weekend, he cannot understand where I get the money from.I cant understand where he gets the money from for those nice cars.Bottom line is that talk to your neighbour and the truth will shock you about their financial hardships.

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B Derrick Radebe November 21, 2012 at 6:32 am

Why waste time worrying about those who are better off financially than yourself? Life is about inequalities otherwise we would all be the Donald Trumps of this world.As long as you dont go to bed hungry and are able to afford basic necessities forget about those who are better off.

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Romeo December 10, 2012 at 10:58 pm

What a positive insight Mr Radebe, thanks

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m November 23, 2012 at 5:07 pm

People become wealthy by saving money not by spending money.

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maven November 28, 2012 at 9:00 am

You have a very short-sighted experience. Most of our country’s founders, builders, and producers up until recently have been “clingers” to the Bible and the advice found therein. We are now too modern for all of that, and we now have modern problems and the possible financial destruction of our beloved country ahead of us.

BTW, where have you read in the Bible that we are not supposed to better ourselves? Perhaps you should brush up on the parable of the talents or look up the Protestant work ethic.

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SRogers November 29, 2012 at 5:39 am

Or maybe, just maybe, they DO have more money than you. Maybe they DO make more money than you. Maybe they are deliberately living in YOUR neighborhood in order to have extra money to LIVE their lives NOW and still be able to plan for the future, instead of scrimping and saving every single dollar so that when they are 70, they can FINALLY go on that week-long trip they’ve always wanted to go on.

And maybe YOU’RE broke…not them.

A life of “plastic” can only go on for a year, or two–maybe three–but it is unsustainable. If you’re looking out of your window, year after year, seeing your neighbor do all the things you want to do, the probability is relatively high that they are doing a lot better than you are.

This article reminds me of people who walk/drive by wealthy areas and look at each other and say, “yeah, but I bet they are really unhappy.” Lots of wishful thinking here.

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Dan November 30, 2012 at 8:26 am

I have the same mindset as SRogers.

This article is incomplete without adding in #8: Maybe your neighbors *do* have more money than you.

The obvious one is that your neighbors might just make more money than you think. That they choose to live in a smaller/lesser house than other people making similar amounts to them because they would rather spend their money on those cars and lawns while still being able to save for retirement.

A less obvious one, is that perhaps they saved more money earlier in life.

Personally, my wife and I were married pretty much staright out of college (which we were fortunate to graduate from with no loans to pay back) and lived for 8 years before having children. During that time we saved/invested 2/3 of our take-home so that when we moved out to the sub-burbs we could have one parent stay home with the kids, live a comfortable life, and still have a good nest egg at the end.

-Dan

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m1h December 7, 2012 at 6:03 pm

The article wasn’t bad. It presented information in an organized manner. There are grammatical errors. There’s miscommunication going on, as clearly demonstrated. If we don’t start fixing a KNOWN problem, it could be a missed opportunity to improve for the good of ALL. The feedback always speaks volumes as well, as did “Dan’s” reply. Never ASSUME that there are only seven factors, or six, or ten. You need to to what makes sense for the situation.
Consistently.
I leave you to keep seeking truth, especially inside of you, then seek it elsewhere. Remember that money will be naturally attracted to the root of
the problem, always has been, always will be.

Now ponder thee this: wtf did all that come from? (my previous “text”)
I didn’t graduate h/s, or go to college. But I did marry my first true love;
was happy with her for at least 3 decades; we made a child, and adopted one.
We were happy, but now the angel that was here for so long (and just as short in timespace) has passed. We go on the best that we can, but life seems empty
w/o those “humans” that we have “ultimate” connections to. We all need 3 things to survive: H2O, food for the carbon-based life form, and food for the
spirit. Observe, Improvise, Adapt, and Overcome the obstacles to survival.

~anon~

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Doug December 5, 2012 at 7:39 am

…or they could be be making more than you. I felt pretty good about our combined two-income family at $380k/year (base+bonus for each), until my daughter started her private school last year. Lots of social gatherings at 8,000+ sq ft houses, weekend properties, nannies, etc. The reality is, we are one of the lower income families at the school. Lots of CEOs, CFOs, wealth managers, i-bankers, lawyers, doctors and other business owners. It’s easy to be envious. The challenge is to stay focused on our own goals, provide our daughter with a great education and support her, and not worry about what other people have.

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Eric December 5, 2012 at 3:03 pm

As a little old Italian lady once told me, “You no got, you no spend. You got, you no spend.”

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Mommy Iris December 6, 2012 at 6:37 am

You nailed it!

How I wish I could share this to my neighbor who thinks that they are better than us!

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ProudMom December 10, 2012 at 7:08 pm

This is a very good reminder for me not to splurge on unnecessary things especially this holiday season. You are perfectly right, our neighbor’s lifestyle should not influence our own. We just have to be grateful and contented on what we have and plan carefully our finances .

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hutch December 13, 2012 at 8:07 am

I have asked this question about peers since college. After 20 years, I have found the biggest reason is parents. For example, I know people that their parents bought their first house for them. That is a lifetime advantage, but a steady stream of money/gifts from wealthy parents can also but the recipients into a higher standard of living. I find recipients of this kind of largess, are rarely upfront about it, instead choosing to leave the impression they magically bought that condo right out of college with money from their summer job at Starbucks.

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Steven Ostertag December 13, 2012 at 12:56 pm

What I have found is that the more opulent appearing households attract criminal attention and the less opulent appearing households attract police attention and those in the middle attract both.

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