Six levels of wealth - how are you doing?

[Dtail]

Only take pictures of my fiance when on vacation and only by request. lol

 

[Exit 2024]

About NW numbers and income that he is listing, is the for individual? or for couple?
By those 2 numbers we solidly 5 if it is for couple, but everything else is 4. if we count per person, then yea, those 2 are also fall rather to 4.

ETA: I do not see us moving fully to level 5 with increase of income and NW, some items just not a value for us.

Also why is level 4 missing vacations?

 

[TheWizard]

About NW numbers and income that he is listing, is the for individual? or for couple?
By those 2 numbers we solidly 5 if it is for couple, but everything else is 4. if we count per person, then yea, those 2 are also fall rather to 4...

I mentioned this as well.
It SHOULD be on a per person basis, so just double those numbers for a couple.
But I suspect that it is not...

 

[FD1000]

We are at level 5 but don't have or need any of the luxury.
We never owned a business, a rental, RV, or a boat and will never do it.
We always owned 2 vehicles, one house, and all the money is invested in the markets.
We made our money by saving monthly and making excellent decisions.
Our friends are mostly in level 3, and they don't have an idea how much we have.
We can find cheap and great clothes, restaurants, hotels, vehicles, and houses.
Examples:
Our phones are refurbished Pixels that we paid $180. We don't need $1000 Apple.
We have bought new Hondas, Toyotas, and, lately, a Kia. We don't care about luxury vehicles. IMO, they are worth an extra 20%, never 2-3 times more.
Flights: always in the main cabin.
Restaurants: I have eaten in expensive restaurants and they were not better than much cheap great restaurants.
Wine: We have a snob friend who thinks she can distinguish between cheap wine and a much better wine. Years ago, I bought 3 wines: one under $10, one under $20 from Aldi and one at $50. I put them in glasses and let her taste. She told me the $7.99 from Aldi is the best.

Conclusions: at some point, more expensive isn't always better, or it is better but costs a lot more than its worth. A $80K car isn't worth twice as much as a $40K car. The manufacturer and dealer know you have money, so they raise the price beyond its worth to let you feel special...and you spend it.
Sure, it's your money, and you can spend it how you like, but don't claim it's worth it.

Flight

 

[sengsational]

I have a lot of cool pictures left, though, that nobody will care to see someday. (and what do all of you do with the thousands of photos you meticulously save?)

Yep. I came to the conclusion a long time ago that nobody would care about the pictures I took if they weren't associated with a current activity (i.e. "news."). And even then the audience would be small, like my mom and kids (and sometimes not even the kids, and sometimes mom is just being polite, hehe).

When phone cameras became ubiquitous, my theory (wrong as it turns out), was that the ratio of effort to take pictures was out of whack with effort to properly curate them so they could be presented into something that would be interesting enough to spend time looking at. The reason the theory was wrong is because I didn't foresee how an AI could auto-curate and make interesting, bite sized things. And also how there are ways to find pictures by person, location, date and that search can be easy and fast enough to do after a couple of beers

I have largely given up on taking pictures, especially if they don't have people or something personally important to me in them. When I am on vacation, I know that whatever sight I am visiting will have far better pictures online than I can possibly take in person.

My dad traveled a lot, and loved photography, so took a lot of scenery. When I was a kid, he had changed his tune. He said the only pictures he cared to look at were the ones with people in them, and discouraged scenery shots. Like you, he said, if you want the perfect picture of that (building, waterfall, landscape, etc), just buy a post card.

Only take pictures of my fiance when on vacation and only by request. lol

I haven't talked my wife out of taking lots of scenery pictures, or pictures of museum pieces, or gardens, or flowers, etc. So what I do is take a picture of her taking a picture, LOL! When I get home, I merge her photos with mine and sort by time taken, and you see her shot of the flower or whatever, and then of her taking that picture. It's kind of a game with us, because I try to do it without her noticing, and she finds out after we get back and watch the slideshow. Needless to say, she is no longer surprised.

 

[Rocky mtn high]

Level 5, but live in level 3, live below your means

 

[Happy Homebody]

I feel like LBYM people often don't fit well into this.

I feel like this is based on the assumption that everyone wants to live the most lavish life they can afford. Most people seem to act as though you are missing out if you don't.

But sometimes I honestly don't want the higher end things. My clothes are mostly things that were purchased cheaply. But they feel comfortable and I feel comfortable wearing them.

 

[RetiredHappy]

I feel like LBYM people often don't fit well into this.

I feel like this is based on the assumption that everyone wants to live the most lavish life they can afford. Most people seem to act as though you are missing out if you don't.

But sometimes I honestly don't want the higher end things. My clothes are mostly things that were purchased cheaply. But they feel comfortable and I feel comfortable wearing them.

I think your observation is spot on. Most people on this forum have LBYM to get to FIRE and wealth level with characteristics of the level don't match on the slide.

For my spouse and myself, we have never LBYM, past or present. We have always spent on whatever we wanted, including on a ton of designer brand stuff in my 30s, about 20 years before I met my current spouse, and still had quite a bit saved. Level 5 describes our lifestyle quite well, except that instead of "delivery", we eat lunch out everyday at sitdown restaurants and dinner out once a week. We were both in senior management in megacorp and also subsequently started our own business. I have a MBA and he has a PhD. We have people take care of our home - housecleaners, yard, pool etc.

We have alot of opportunities to participate in fundraising events, some in which we participated in. These are mainly for veterans and political candidates. Another note is that we live in a community that wealth level is at least at 5 and probably 50% or more at level 6.

 

[oiseux]

The population here is definitely skewed to LBYM and since we are filled with early retirees, the ages here may also contribute to the miss with his categories. We participate in anywhere from 3 to 6. I too find the gap between 5 and 6 is probably is too large, or the entry level to 6 not high enough.

His points about social circles and neighborhoods have merit, for the larger public. If you live in certain neighborhoods, schools, clubs etc your social circle starts to include people in a certain similar position. If you start going to fundraisers and galas, you find yourself usually exposed to people with the means and the compulsion to donate. The wardrobe needs to expand beyond Costco (This isn't a world we live in, we just visit the small scale outskirts from time to time).

We defnitely do regular medical services (though maybe we should check it out) and prefer to cook and the only delivery is usually Uber Eats for things that are complicated (ingredient intensive) to cook and travel well (like Indian food).

Just one point on a much earlier (page 2) referencing the true 0.1%, those billionaires do participate in the quiet luxury in what they wear. Those hoodies, t-shirts, sweaters and casual clothing are no longer coming from the Gap but have gone upmarket. Gates used to wear a lot of Loro Piana as did Zuckerberg, but he's branched out to other brands and luxe custom items. In the past, Jobs' disclosed that his famous turtlenecks were customized by Issey Miyake. BTW, Loro PIano is extremely expensive but the quality is very high, and you can feel the difference in the fabric. But obviously, the value of quality to price is not there. And so yes, not all those billionaires buy super expensive clothing but there is a lot of stealth in even their most casual choices.

 

[lem1955]

We live in a relatively poor rural area and have a wide range (economically speaking) of friends and acquaintances - from Level 1 to Level 6. We feel very rich though we check most of the boxes (barely) at Level 5. We don't have a personal chef, but we do have a young man who mows our lawn, monthly help with extensive gardens, and a housecleaner once every two weeks. We eat out when we want to, approximately once a week, but not at high end restaurants. We usually take one expensive trip a year and multiple smaller ones - by car, or to stay with friends and or family. Though I had a well paid job, I didn't need to dress in expensive clothing and have no need for it now at all. Yet I still have more than I need and should pare down.

And I have 4 bicycles - a custom built titanium Serotta (I am barely 5' tall), 2 hybrids both Trek (one is for guests), and a Gazelle Ultimate C8 e-bike. I mostly ride the hybrid on a rail trail and the e-bike on dirt roads these days. I mostly rode the Serotta from age 55 - 65.

 

[Bryan Barnfellow]

I'll have my butler take a look at the video in the morning

Rather than wait, I had my night butler take a look. He will leave his report with the day staff.

 

[Winemaker]

Rather than wait, I had my night butler take a look. He will leave his report with the day staff.

Which day staff?

 

[Rianne]

We are at level 5 but don't have or need any of the luxury.
We never owned a business, a rental, RV, or a boat and will never do it.
We always owned 2 vehicles, one house, and all the money is invested in the markets.
We made our money by saving monthly and making excellent decisions.
Our friends are mostly in level 3, and they don't have an idea how much we have.
We can find cheap and great clothes, restaurants, hotels, vehicles, and houses.
Examples:
Our phones are refurbished Pixels that we paid $180. We don't need $1000 Apple.
We have bought new Hondas, Toyotas, and, lately, a Kia. We don't care about luxury vehicles. IMO, they are worth an extra 20%, never 2-3 times more.
Flights: always in the main cabin.
Restaurants: I have eaten in expensive restaurants and they were not better than much cheap great restaurants.
Wine: We have a snob friend who thinks she can distinguish between cheap wine and a much better wine. Years ago, I bought 3 wines: one under $10, one under $20 from Aldi and one at $50. I put them in glasses and let her taste. She told me the $7.99 from Aldi is the best.

Conclusions: at some point, more expensive isn't always better, or it is better but costs a lot more than its worth. A $80K car isn't worth twice as much as a $40K car. The manufacturer and dealer know you have money, so they raise the price beyond its worth to let you feel special...and you spend it.
Sure, it's your money, and you can spend it how you like, but don't claim it's worth it.


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Flight

Agree!!! I don't agree with most of his category assumptions.
Degrees, the following do not have them. And many more successful people I know don't either.
Richard Branson, Larry Ellison, Mark Zuckerberg, Bill Gates, Steve Jobs, and Michael Dell.
Housing: look at Warren Buffet's house, and read the millionaire next door. Many millionaires live in average houses.
Clothing: It's considered "cool" to shop at discount stores and places like Good Will. My Orthopedic MD wears faded old t shirts to work!
Concierge medical care? Who gets that? I waited 7 hours in the ED one night.

And yes about the wine. That's been proven over and over again.

 

[Amethyst]

Seems like the author of the video thinks everyone progresses steadily up the hedonic treadmill as their income/assets increase.

But those of us here understand not doing that is what lets one retire early.

And then choose to spend on what we value.

Which is probably not going to be private chefs or designer clothing.

This was my thought. I am pretty sure I have less dough than anybody in my neighborhood, in many cases a lot less. But I can live in this enclave because I have always done for myself and avoided following the crowd in terms of consumption. Sooner or later I will become like the others and hire someone to do everything, but not until I'm forced to.

 

[Gumby]

...
Degrees, the following do not have them. And many more successful people I know don't either.
Richard Branson, Larry Ellison, Mark Zuckerberg, Bill Gates, Steve Jobs, and Michael Dell.
.....

Except for Branson, all of them went to college and dropped out. Regardless of whether one obtains a degree, attending college at all is a class signifier, especially if it was Harvard like Zuckerberg and Gates. Kids who go to college, especially when these guys did, are more likely to have upper middle class parents, with all the associated advantages that brings to children.

 

[pjigar]

We are not retired but FI. We are and will be (upon RE) at level 5. We check off 4 boxes from level 5.

 

[pjigar]

My rich friends in level 6 checks off about 6 boxes.

 

[YB88]

Just someone's personal idea of what a given level of wealth "should" look like, or is there actual and meaningful data behind this? I didn't watch the video --- I rarely do --- just asked an AI for a one-page summary.

Personal chefs indeed. Agreed with the person that said they don't like labels on clothing --- I'd pay something for reasonable quality clothes that last, but definitely don't want to be a walking billboard of various brand markers/names on me. As an aside, it's surprisingly difficult to find something like a baseball type hat that doesn't have some sort of glyph or name on it. Bleh.

The assumptions about income vs. net worth, of education type and levels, of sources of income --- I suspect that with perfect knowledge that you would find a pretty small percentage of people that fit the networth & income criteria for a level and also match all of the other assumed attributes.

 

[Markola]

Meh, I just finished the excellent book, “Fortune’s Children,” about the world’s richest family of the Gilded Age, the Vanderbilts, written by a Vanderbilt from a never-moneyed branch of the family. Classic wealth story: The founder was rags to riches, his son worked hard to double the fortune, and then everyone else afterward proceeded to blow it, vapidly, on mansions, ever-sillier parties, yachts, and intermarriage with titled, failing, Europeans. Only 100 years ago, Vanderbilt mansions literally lined 5th Avenue, yet today not a single one stands. All demolished. Many unreal summer mansions still stand in Newport, but not one was occupied beyond the generation that built it.

The major takeaway for me is, what, really, is the point of building a fortune? It takes hard work, focus and financial acumen to make and keep money, otherwise it floats away, like a gas.

 

[Winemaker]

There is a lot of expensive wine that is horrible. Price doesn't necessarily mean quality grapes or quality wine. One hot afternoon sitting on a loading dock or locked car can turn a Screaming Eagle Cab into a grape compote.

 

[Diogenes]

Meh, I just finished the excellent book, “Fortune’s Children,” about the world’s richest family of the Gilded Age, the Vanderbilts, written by a Vanderbilt from a never-moneyed branch of the family. Classic wealth story: The founder was rags to riches, his son worked hard to double the fortune, and then everyone else afterward proceeded to blow it, vapidly, on mansions, silly parties, and yachts. Only 100 years ago, Vanderbilt mansions literally lined 5th Avenue, yet today not a single one stands. All demolished. Many unreal summer mansions still stand in Newport, but not one was occupied beyond the generation that built it.

The major takeaway for me is, what is the point of building a fortune? It takes hard work, focus and financial acumen to make and keep money, otherwise it floats away, like a gas.

Interesting points. Much of our wealth-cycle involves children, grandchildren and so on. Transfers between generations is the major topic in "wealth management" circles. But what of wealthy people who had no heirs? The Vanderbilts not only illustrate the "classic wealth story", but each generation was large; large families, with many members on one generation, themselves having lots of kids. Even if shepherded sedulously, the fortune divides. Compare instead for example Carnegie, who had only one child, and left to her only a small portion, putting the rest of his money towards... other projects.

As for impressive real estate, one is reminded of numerous stories of how mansions were lost, not from rampant profligacy or fights between heirs, but because rising property tax and maintenance costs rendered ownership impractical. We often think of real estate as an investment and as diversifier, but it would probably have been better to invest in a 19th century version of the Boglehead 3-fund, than to have "invested" in Biltmore.

 

[Markola]

^^^ 100%. Biltmore is the perfect example. Frederick Vanderbilt started running out of money during the construction of this baronage in rural North Carolina, and rooms started being bricked off instead of finished. He died in his 50s in 1914 and no Vanderbilt lived there again.

There are over 800 descendants of Cornelius Vanderbilt. No fortune can survive that kind of dissipation, unless it’s somehow concentrated.

Interestingly, my career brought me in contact with one of the Carnegie fortune’s descendants, though of his also-wealthy brother, Thomas. Nice person. She made her own jewelry and enjoyed tennis.

Philanthropy ends up being the only productive choice, I believe, and the only chance at modest longevity seems to be creating a “permanent” endowment benefiting institutions that seem to have some staying power themselves.

Otherwise, in just a few decades at most, POOF!

 

[TheWizard]

^^^ 100%. Biltmore is the perfect example. Frederick Vanderbilt started running out of money during the construction of this baronage in rural North Carolina, and rooms started being bricked off instead of finished. He died in his 50s in 1914 and no Vanderbilt lived there again.

There are over 800 descendants of Cornelius Vanderbilt. No fortune can survive that kind of dissipation unless it’s concentrated.

Interestingly, my career brought me in contact with one of the Carnegie fortune’s descendants, though of his brother Thomas. Nice person. She enjoyed tennis.

Philanthropy ends up being the only productive choice, I believe, and the only chance at modest longevity seems to be creating a “permanent” endowment benefiting institutions that seem to have some staying power themselves.

Otherwise, in just a few decades at most, POOF!

Well yes, if descendants of a billionaire set their minds on simply living to the max off their inheritance without adding value, then POOF sounds about right.
But I wonder how many wealthy families have gone opposite to that trend and have increased their composite wealth over a few generations?
The Rockefellers maybe?
The du Ponts?

 

[Markola]

Yes, and maybe the Ford family. I’m not taking a hard line judgment, because wealthy family descendants certainly are productive members of society. I just marvel at how easy it is, even likely, for fortunes to evaporate through mushrooming of heirs, divorces, taxes, substance abuse, poor investments, etc., etc, etc. Philanthropy seems to me the most likely choice for continued impact, vs. unpredictable descendants or estate taxes. Taxes are a way to invest in society, and I’ve seen some wealthy deceased be fine with it.

I agree with Diogenes that show-place real estate is about the worst thing to put money into, if longevity of a fortune is a goal.

 

[Winemaker]

The same goes for here in our local town. Huge Victorian style homes with fancy brick elaborate woodwork and trim, all from th4 early gas and oil families from the late 1880s and into 1910s. Present day owners cannot keep up with all the maintenance costs. Slate roofs, copper gutters, stained glass, wrap around porches aren't cheap.