Indicators of Wealth?

[Tadpole]

My chauffeur drives me to Denny's for the AARP discount.

 

[clobber]

Thanks for the replies everyone!

TLR. Maybe I needed to be more specific. If you fall into category 3 below, what are some of the indicators that reflect that stage of wealth?


It was probably inevitable that some of the replies would at least allude to wealth vs happiness which I didn't really intend. I think that poor, middle, and upper income/wealth people can all be happy (or not). I only wanted to identify some of those things that wealthy people tend to do that others don't.

I would generally categorize rich/wealthy into 3 groups which also seem to be reflected in your replies:

1) The Bill Gates or Jay Leno with the resources to have the yacht with the submarine and dual helicopter pads. I think we all get the concept there. You literally have NO financial constraints to do anything. As @starry night pointed out, you are also unlimited in the ability to give.

2) The overly frugal millionaire next door. We all know the stories (and actually know a few of these people) who are "rich" or "wealthy" because, if they go out for dinner at all, would go to the Sizzler. Only on their 50th birthday would they go to Outback - if someone else were paying. They would not be caught DEAD in a Chart House or Ruth's Chris. There is NO way the air conditioner would be set to 72 on a hot summer day. Probably would not even be turned on, but at best 80 degrees.

For me, I just don't see the point. To die with the biggest bank account number possible? Contrary to what @Options said, I do equate some degree of wealth with spending. Perhaps I'm not using the right terminology, but many of these frugal people with lots of money might not have "financial" constraints on activities, but rather have mental ones.

Lets face it, no one has ever had a meal at Denny's and thought, "Man, that was awesome. I'm coming back tomorrow and having that again." That is not to knock Denny's. It is what it is. Of course I fall into the "live to eat" vs. "eat to live" category. Would I go to Denny's in a Hurricane evacuation (been through a couple myself)....sure.


3) The kind of person I'm talking about. One who has enough and will judiciously spend a portion of it. The person who will opt for the $3500 business class seat to Europe instead of the $1200 cattle class. This person knows what it means to spend the extra $2300 and actually thinks that it is a lot of money (it is!). He still chooses to spend it because he has enough and the comfort is worth it. This same person doesn't fret over spending an extra $1000 on a sunroof for his new Toyota 4Runner. Heck, not much difference between $37K and $38K anyway.


Again, maybe the wrong terminology, but to me wealth has a certain component of attitude. @WR2 makes a lot of good points, especially just having enough!

 

[daylatedollarshort]

Lets face it, no one has ever had a meal at Denny's and thought, "Man, that was awesome. I'm coming back tomorrow and having that again."

You've never met my husband then!

 

[hesperus]

None of the above. It is a mistake to equate "wealth" with spending. In fact, spending has nothing to do with wealth. Spending only has to do with....spending.

+1

This thread will go nowhere fast

 

[ABQ2015]

Well, good luck on this thread. We had a similar one on another forum and it just ended up being a big bashing of people who spent too much money on frivolous things because they must be up to their neck in debt, all the truly wealthy people were frugal and never talked about their money or displayed their wealth, true wealth was being happy and with family, blah, blah, blah. Anyone who played along was accused of being superficial. Sort of like bling.

 

[RobbieB]

I'm a number 3 and don't want to die rich. So I'm learning how to blow more dough. Yes, I said learning as it is not easy to do after being frugal so long.

So, I'm blowing more dough on the stuff I like. And I'm still not spending enough as my stack keeps getting bigger.


I'll add;

Caviar and seafood shipped overnight
A brand new BMW R1200RT
Concert tickets at $300 a pop

 

[Bestwifeever]

A fine line imo using the above qualifiers between wealthy and being a snob. Only a snob would care if someone likes to eat at Denny's, again imo.

 

[ShokWaveRider]

I know there are all kinds of definitions for being wealthy. Things like being in the top 1% (or .01%), or having a certain net worth, or income level. Personally, I like the link to having "no financial constraints on activities." So, what are some specific activities that might indicate a person is wealthy? Some of mine include:

1) Purchase international business class tickets (even if you hunt for the cheaper ones) without hesitation.
2) Never even consider going to Denny's, Sizzler, etc.
3) Never consider staying at Motel 6 or Super 8.
4) Spending $100-$200 on a whim. Want that new Amazon Echo? Just buy it and if it doesn't work out...who cares. It was only $200.

What are some of your indicators?

None of the above.

 

[RobbieB]

I used to eat at Denny's (breakfast) but stopped as a Nations Giant Hamburgers was built right next door.

2 eggs over easy with bacon and hashbrowns please. Cheaper and better than Denny's. Sounds good too, think I'll have it for lunch today -

 

[DrRoy]

None of the above. It is a mistake to equate "wealth" with spending. In fact, spending has nothing to do with wealth. Spending only has to do with....spending.

+1 I agree. You could be buying on credit. I read once that the wealthy pay less than 2% of their NW in income taxes per year.

 

[RobbieB]

Well then, let's limit this discussion to what people "splurge" on that are not buying on credit.

 

[aja8888]

3) The kind of person I'm talking about. One who has enough and will judiciously spend a portion of it. The person who will opt for the $3500 business class seat to Europe instead of the $1200 cattle class. This person knows what it means to spend the extra $2300 and actually thinks that it is a lot of money (it is!). He still chooses to spend it because he has enough and the comfort is worth it. This same person doesn't fret over spending an extra $1000 on a sunroof for his new Toyota 4Runner. Heck, not much difference between $37K and $38K anyway.

We have a couple of those types here that occasionally flaunt their spending and name drop about which of the several houses they own they will be vacationing at this week. They haven't posted here yet (I think) as they may be flying first class to some exotic destination at the moment. But they will chime in as soon as they get internet access, maybe from their limo out of the airport.

 

[daylatedollarshort]

We decided our price point for good food is about $10 a meal per person. We can get tasty Thai, Vietnamese or Indian lunch specials for that price and have never found anything we felt was tastier or healthier. I had the chance to get some discount tickets to a foodie event in the city last year with chefs from Michelin starred restaurants. The event was a lot of fun and in a skyscraper with pretty views. But we realized the food we thought was best were the Asian dishes and we can get those close to home and without paying much.

 

[clobber]

You've never met my husband then!

Ha! Probably should not have made an absolute statement. Oops

 

[clobber]

I'm a number 3 and don't want to die rich. So I'm learning how to blow more dough. Yes, I said learning as it is not easy to do after being frugal so long.

Yes - I too have had to start learning that. And I'm not talking about amassing things or spending frivolously.

 

[clobber]

Well, good luck on this thread. We had a similar one on another forum and it just ended up being a big bashing of people who spent too much money on frivolous things because they must be up to their neck in debt, all the truly wealthy people were frugal and never talked about their money or displayed their wealth, true wealth was being happy and with family, blah, blah, blah. Anyone who played along was accused of being superficial. Sort of like bling.

Yeah - we will see. Sometimes the Internet is a hard sad place. HA!

 

[clobber]

A fine line imo using the above qualifiers between wealthy and being a snob. Only a snob would care if someone likes to eat at Denny's, again imo.

Fair point and maybe I should not have called out a specific place. My point was to give a typical example of a place where someone might eat just because it is cheap.

 

[NW-Bound]

My chauffeur drives me to Denny's for the AARP discount.

But to be truly rich and generous, I would invite my chauffeur in for a dinner with me.

 

[clobber]

+1 I agree. You could be buying on credit. I read once that the wealthy pay less than 2% of their NW in income taxes per year.

Well for the purpose of this discussion I'm talking about "the wealthy" and not buying on credit. Assume you have $2M in liquid assets and can get your hands on $200 or $100K out of those accounts immediately.

I'm not saying the wealthy don't use credit.

 

[clobber]

We decided our price point for good food is about $10 a meal per person. We can get tasty Thai, Vietnamese or Indian lunch specials for that price and have never found anything we felt was tastier or healthier. I had the chance to get some discount tickets to a foodie event in the city last year with chefs from Michelin starred restaurants. The event was a lot of fun and in a skyscraper with pretty views. But we realized the food we thought was best were the Asian dishes and we can get those close to home and without paying much.

Now I'm hungry!

Agreed on those counts. So - let me guess. You would not have gone to the foodie event had it not been for the discount tickets? I'm thinking a #3 category person that I described would absolutely go for discounts, but would not give a second thought to paying full price.

I don't care what category anyone here fits into. Just trying to identify those behaviors, indicators, or "splurges" of a cat 3 person.

 

[socca]

So, what are some specific activities that might indicate a person is wealthy?

Any particular expenditure can only be properly understood within the context of a person's overall income, expenses, and assets. So, I would argue that the 'information value' of any particular expenditure is rather low.

BTW, my mother likes to eat at the Golden Corral all-you-can-eat buffet, which hardly caters to the 1%. So, you really can't infer anything from a person's dining-out preferences.

 

[RobbieB]

I look at it as "having more fun" and doing what I want to do.

I still do a lot of DIY and not because I'm trying to save money, but because I like building stuff and I can design it exactly how I want it.

I've always loved east coast seafood, but it was a long time between trips to the east coast. So now I just FedEx the stuff whenever I get the urge.

I've always loved motorcycles but never bought anything that cost over 10 grand. That BMW was twice that and I can afford it and just wrote a check. But it's one of the best sport tourers there is.

So that's my plan. Do what I want and what I like and just have fun!

 

[daylatedollarshort]

In The Millionaire Next Door book, the first time the authors did a focus group with millionaires worth $10M or more, this is what happened:

"[FONT=Arial, Helvetica, sans-serif]The first multi-millionaire to arrive was offered a glass of wine -- very expensive 1970 Bordeaux. He replied, "I drink Scotch and two kinds of beer — Budweiser and Free!"[/FONT] [FONT=Arial, Helvetica, sans-serif]By the end of the two-hour focus group, not a single person had touched the pate or the vintage wines.[/FONT]
[FONT=Arial, Helvetica, sans-serif]The book continues with, "Today, we are much wiser about the lifestyles of the affluent. When we interview millionaires these days, we provide them with coffee, tea, soft drinks, beer, scotch and club sandwiches. Of course, we also pay them between $100. and $200 apiece."[/FONT]

[FONT=Arial, Helvetica, sans-serif]Source:[/FONT]
[FONT=Arial, Helvetica, sans-serif]http://www.alanrosenspan.com/recent_pubs/marketing_affluent.html
[/FONT]

 

[Bestwifeever]

Fair point and maybe I should not have called out a specific place. My point was to give a typical example of a place where someone might eat just because it is cheap.

If we wanted pancakes we might go to Denny's (we actually never go to Denny's because there is an awesome diner under a half mile from our house with mighty fine breakfasts), but cost isn't a factor in that decision. One thing we have been surprised and happy about is that cost isn't a factor in most of our decisions any more, so we feel wealthier now, compared to previous stages of our lives (we are not making decisions like buying an airplane or a second home).

 

[RunningBum]

Just a few minutes ago I splurged on a not-quite 2 hour direct round trip domestic flight, paying $329 instead of $249 to leave mid day rather than 7am, and to fly economy plus outbound and first class return. Probably not quite a wealth indicator but it's nice to not have to scrimp for the lowest fare.


International business class would probably be a good indication to me. I have a couple of very long international trips I'd like to do but I hate the idea of being cramped on planes for so long. The price diff of economy/plus/business is $1000/2500/4000 on a quick check today. Hard to justify an extra $3000, but on the other hand I just can't see putting up with flying cattle class for extra long flights, so it might come down to whether I'm willing to pay $2500 or $4000 rather than $1000 in airfare to take such a trip. So I guess if I didn't blink at that I probably would consider myself wealthy, instead of what I'd call "wealthy enough".