7 Reasons Your Neighbors Have More Money Than You

by Vincent King · 318 comments

neighbors make more money

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.

neighbors and money

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 who 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 when you need to, and live a life you want.

In The Meantime, Here’s How to Feel Richer

Think about wealth for a second. Is it really just about money? Or are there other factors involved?

What Makes Me Feel Rich

Even though I’m not what many people would consider “rich” in terms of income, I do feel rich in a number of ways. Some of the things that help me feel rich include:

I have a flexible job: It’s amazing the feeling you get from having a flexible job. Whether you have flexible hours at a job outside the home, or whether you have your own business and can choose some aspects of your job, there is a certain richness in being able to choose your hours, how long you work, and who you work for.

Being able to indulge in small treats: One of the things I like is being able to indulge in small treats. A matinee at the movies, a new book, or dinner out is a treat that I like to indulge in. As long as I have the resources to indulge occasionally, without worrying that it will ruin my finances, I feel rich.

Helping others: Many of us can feel rich when we help others. Whether we give our time to help someone who needs our aid, or whether we write a check to a charity, or donate canned goods to the food bank, or give blood, doing good can be a real boost. It reminds us of how much we have, and what we have to give.

Time to do what I want: Lately, things have been so crazy that I haven’t had time to practice music, or engage in activities with my family. I’ve made a little extra money, but I somehow feel poorer. We all like to have time to do something we enjoy, and when I’m so hurried I don’t have time to read a book at lunch, or make cookies with my son, I feel the lack. So, freeing up more time is a definite priority for me.

In so many cases, “rich” is a state of mind. It depends on how you view your life, and what you can do. While it’s true that, to a certain extent, money is necessary in order to live, and while money can make living more pleasant, money isn’t the only thing that makes one “rich.” Many people cite family, friends, health, hobbies and other items as things that make them feel rich. Focusing only on a dollar amount doesn’t always lead to satisfaction with your finances. Managing my finances so that my needs are taken care of, and some of my wants can be enjoyed, is my definition of “rich.”

What’s your definition of “rich”?

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{ read the comments below or add one }

  • Alene says:

    I also like doing the opposite—Living poor so I’ll get rich. No one would ever know? My beater car is totally making it happen.

  • Steve says:

    Wow what utter tripe. They have more money because they are either earning more than you, have mummy and daddy to pay for it, playing the syatem benefits etc. Or just down right crooks. The wanting to feel more well off advice is just plane nauseam, you cant indulge in what you want because unless its sitting there doing nothing then it take money. Even alot of free things such as taking walks now have been ruined as they reclaim all the walk ways that farmers have allowed to over grow and as such dont get used and after a certain time can be claimed. I earn what I thought was alot (around £60,000 a year, I can pay my self alot more but I would just have it stolen off me… oh sorry over taxed on it, so dont bother), but everyone seems to drive round in a newer car than me. I dont go out I dont drink, I dont have any expensive hobbies… I just really dont know how people seem to live it up all the time surely even if it’s on the drip it must run dry at some point when they cant afford to pay it back?

  • DNN says:

    My next door neighbors are allegedly jealous of me. The “side hustle millionaire” mind is on the rise! 🙂

    • Caroline Bowman says:

      I have actually been (in a very minor way, not overt) sneered at because we don’t insist on the latest and greatest and aren’t constantly hustling to get newer, better cars or houses or whatever. One of the main culprits is a generally very nice guy, whose wild insecurities mean he is just desperately keen to be seen as ”well off”, who never seems happy with what he and his family have. There’s always more to aspire to, apparently, with debt to the hilt, and having to work harder and harder in service of that. Their home is lovely, their cars are lovely, their child is at the very priciest school going… but now ” I want to be living at X place”. WHY?? Our mortgage is paid off, the area is a solidly, long-term good one, with an excellent government school. Our cars, just ordinary, late-model, low-mileage ones, were paid for upfront. We’ve been extraordinarily fortunate in many respects, but this obsession with Keeping Up With the Jones’s looks exhausting. Exhausting. And after all that, it’s literally just bells and whistles. Then again, we all have different priorities, it just feels a bit like a hamster-on-a-wheel to me, never really being able to just relax and be happy with what you have. Sure, we have our little dreams of making a part of the garden much nicer with paving, or smaller home upgrade type things that aren’t necessarily dirt cheap, but we are basically happy with what we have, and what we have is a lot!

  • Connie Lantz says:

    One of your best articles and also one of the most important ones in realizing why many Americans are so in debt!
    It is interesting how even siblings, raised supposedly the same way, can be so different in how they approach their spending – one could be a miser and the other a spendthrift. Is this a disease that so many people are not happy with what they have and think that happiness can only be had by having what someone else has?? I don’t know how we did it, but our 3 daughters could care less what their neighbors have. They are thoroughly enjoying their spouses, their children and their work and their lives and not trying to keep up with the Joneses.
    Often when dreaming about what someone else has, one does not consider the cost of maintaining those possessions. The cost of upkeep and maintenance, cost of insurance, cost of sheltering, thus causing even more money problems. It is also interesting to see how different people take care of their possessions.
    I don’t know why I do not seem to care if someone has something neater or better or newer than I. I am always very glad to see that someone has a new house, bigger car, etc. I do try to look at other’s possessions with a critical eye as to if what they have works better (ie: more fuel efficient vehicle, better arranged house in case I ever build one). I do believe it is very difficult to understand the spending habits of someone who makes quite a bit more money. We know someone who makes more than 3 times what we make every year and we do chuckle at how we perceive their (to us, sometimes VERY wasteful) spending habits. But who is to say, we would spend money any wiser if we were in their shoes.
    Anyway, this is a great article and I enjoyed and learned from all the comments also.

  • DNN says:

    Most people would think it’s intimidating if their neighbors have more money than them. Asking me, I find it inspiring. As an aspiring “side hustle millionaire,” I wanna know 1st hand what they’re doing business wise. And how I can possibly network with my neighbors to work hand in hand to cooperatively increase our cash flows together. This way, we keep the
    $ gUaP $ potential recycled among us. 🙂

  • Ellen says:

    Take care of your own needs and wants before sacrificing for frivolous causes. Before making a sacrifice, ask yourself if it will make you happy later. The same hold true with impulse buying. Will it make you happy later? Don’t feel that you have to give to every charity or cause just because someone approaches you. No one has any right to know how much money you have or what you choose to do with it. No one has any idea how long it takes you to earn enough money for something, such as the rent, a sweater, or food. If you don’t have the money for something, then you can do without it. No one should ever feel obligated to give money to someone for luxuries. Everyone should be required to work for what they desire, even it requires working two or three jobs.

  • Chip Keyes says:

    Don’t forget there’s always someone bigger around the corner. If you’re always asking yourself why your neighbors seem richer, then you’re already asking the wrong question. It’s a long unsatisfying game to try and compare yourself to those around you. You’ll be much more successful in a lot of areas when you focus on the things you can take steps to change rather than all the external things that are out of your control.

  • RD says:

    It is now Christmas 2016. How is everyone doing on their finances? Do you still have the same beliefs after the election? Do you feel a change coming financially? Is it for the better or worse? I know credit scoring and banking has changed a lot. I am ready to make some comments on them if anyone is interested. I believe that it is time to share ideas and not question why our neighbors have more, instead, lets ask if they really do and if so how did they do it over the last four years.

  • Zane says:

    I’m 49, and I feel extremely poor. However, I think that is only because I’m very disciplined with my spending. My vehicles are getting old but they’re paid for and are still reliable and look nice (an ’03 Acura, ’04 Toyota, and a 2010 Yamaha motorcycle).

    I currently have a sizable mortgage because I just moved to a new town about a year ago. However, I am in a very nice neighborhood, my house has appreciated in value by more than $60,000 in the past 12 months (from $400,000 to $460,000), and I still have all the equity from my previous home in my savings account ($120,000) – so if I decide to stay here, I can always put that money toward my new house and refinance to bring my payments down.

    I have no credit card debt, and for the past four years I have been saving as much as I can for a new(er) car or truck (currently $35,500). But until the old ones start having problems, I’m in no hurry to run out and spend a lot of money.

    The one aspect of my finances that I am very unhappy about is that I hardly ever take vacations. Over the past 30 years, I have only taken two modest vacations (to Las Vegas and Orlando), and the most I have spent on one was $5,000.

    I don’t have a 401K or investments, but retired from the military as an E-7 in 2006, so I have a modest pension (about $30K/yr). I now teach high school ($46K/yr), so I should have another retirement income by the time I am 65 – and my home should be paid off by then.

    I feel like I don’t have an exciting rockstar existence, but a comfortable life that a lot of other people would probably envy.

    • RD says:


      While rates are still low on a 15 year mortgage consider having your home appraised and putting enough cash in to make a 15 year mortgage. That way you will be sure to be paid off by 65. Another thing is to start looking for the right replacement car now. If you find one that is perfect and at a great price you can negotiate because you don’t care if you get it or not and are paying cash! You have the advantages to make great deals, take them. As for the vacation, look for great deals. Look for Groupon discounts for restaurants in the area and use points to fly. Go to Priceline to get cheap rooms. RD

    • Gerald Filardi says:

      We need more people like you, who don’t worry about what everybody else has. It shows that if you take care of yourself and your family and live within your means, you will be quite happy.

  • Eduard says:

    The idiot of my neighbor thought that I bought a new car because mine broke and spent long time in the shop so I got a a very nice new rental. He then ran to buy one as well, got his home making a lot of noise, beeping like crazy trying to call everybody attention. Now he left the car outside as typical and keep the garage door open. Is this normal? Or am I exaggerating saying he is a idiot (retard)? He will be in shock once I get my old car back.

    • Wow says:

      No we have a dumb neighbor that does the same thing.Everyone on the block knows she’s on welfare has a repo and BK yet when we got new cars she ran out to borrow a 2015 Camaro since we have a Chevy.She pulled up the block making a ruckus with Camaro top down fake friends in the car with her for attention.A week later a neighbor finds out she got the car from a 1star auto place it has lots of miles.We don’t pay attention as much all her cars are over 100000 so we know she’s hurting for attention.Sadder is that someone who has no money goes through all that trouble for show.Don’t pay attention like we said eventually her Camaro will be repossed or she has to give the high mileage longer back and all that drama for nothing.As far as your neighbor how embarrassing honking like that if when your car comes back from the shop funny will fill so dumb not only having a car payment but all that drama for nothing. Your neighbor is jealous of you as ours is jealous of us and they can’t keep up with us so they will do dumb stuff like that to give themselves a sense of control and to curb their envy they feel for the things we have.

  • RD says:

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

  • Jay says:

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

  • RD says:

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

    • David @ MoneyNing.com says:

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

    • AmericanFool says:

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

  • Amy says:

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

    • AmericanFool says:

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

    • Howard hughs says:

      if he wants for nothing he may have everything already.

  • not as it seems says:

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

  • AlphaBear says:

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

    • clay says:

      Your post hits home. Im 35 and live with my dad. (I no, im a loser etc….) I hate him so much. He spends all his money on all these different women. Its such a waste. His reputation around town is terrible because he spends all his time and money on different women. I need to learn that he can spend his money however he wants and to stop being mad at him and to move out and do my own thing. I wish he would use his money to fix his house up but he rather blow it on women who dont care about him.

  • Katrina says:

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

  • Justin says:


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

    Spend your money on things that make you happy.

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

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

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

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

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  • Jones says:

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

    • Zane says:

      If you make $300K per year at age 28, then you are in the top 1% of the world’s wealthy people. Congratulations.

      However, your experiences don’t really compare to most other people.

  • Mdizman says:

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

    • AmericanFool says:

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

    • Tim says:

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

  • Molin says:

    I’M Poor, PERIOD!

  • Di says:

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

  • B Derrick Radebe says:

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

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

  • Shape says:

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

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

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

  • HH says:

    Thanks RD. I actually meant to ask investment banker.

  • RD says:

    To the investment banker:

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

    HH- Be creative

  • HH says:

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

  • investment banker says:

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

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

  • RD says:

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

    • Melanie Malisha says:

      Finally someone who don’t brag, justify or rationalize their wealthy suburban 500k homes but drive blah blah blah. Hard times you need to get off your so easy life we could all have but don’t cuz buy chips at 7/11 each day where you don’t. Please. Sometimes I wish people could step into another’s shoes for a day to stop saying how easy it all is but some just wasteful……lick

  • Keith B. says:

    LOL…. hilarious!

  • Mike says:

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

  • Sebi says:

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

  • Johnny says:

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

    • K says:

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

      • DW says:

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

  • CeboNathi says:

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

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

    • DW says:

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

      • B Derrick Radebe says:

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

  • J says:

    10 k in da bank. U livin good.

  • larry says:

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

  • KC says:

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

  • sks says:

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

  • Kellan says:

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

  • Mike says:

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

  • Red_ says:

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

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

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

  • Wendy says:

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

    • Kim Bryan says:

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

    • DW says:

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

      • AmericanFool says:

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

  • Wendy says:

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

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


    • Bryanska says:

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

    • Melanie Malisha says:

      I am truly sick to my stomach reading most of the comments here. I don’t believe the material gains has done any favors but keep blinders on what God says the greedy and rich lead themselves to be wicked when they forget to love everything but riches of this world. Sad.

      • Steve says:

        Hey, Churchie. You do realize this is a financial blog, right?

        Maybe if you frequented other blogs, you wouldn’t have to ‘get sick to your stomach.’

  • Sparky says:

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

    • Steve B says:

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

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

  • john wynne says:

    some good advice

  • Bill Dixon says:

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

  • monkeyfurball says:

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

  • Marq says:

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

    • monkeyfurball says:

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

      • dalancroft says:

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

  • TheDerek says:

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

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

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

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

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

    • monkeyfurball says:

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

      • Alp says:

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

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

      • TheDerek says:

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

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

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

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

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

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

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

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

    • mike says:

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

    • mike says:

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

  • Old rich guy says:

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

    • Tim says:

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

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

      • K W says:

        Debit cards are a possibility, then.

      • wini says:

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

      • april says:

        I’ve booked flights, rented cars… all of that with a debit card. I haven’t used a credit card since 2005. No debt. Paid our mortgage off. Save up and pay cash for cars. It’s a lovely life. It’s not a cool life, but a lovely one I wouldn’t do any other way. People aren’t impressed by it. So I’ve learned not to care about others opinions or live to impress….

  • Old rich guy says:

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

    • monkeyfurball says:

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

      • Danyy WEb says:


      • David W says:

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

        • Melvis says:

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

      • mike says:

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

        • john says:

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

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