Yahoo (via TheStreet.com) has an article that lists ten reasons why you’re not rich.
The list is bullshit, plain and simple. The article bothered me so much that I actually had to close my laptop, walk away from the computer, and come back to the computer several hours later.
The author, Jeffrey Strain, blames the reader for being stupid, spending too much money, and driving a fancy car. Here’s an excerpt.
[You're not rich because...]
You feel entitlement: If you believe you deserve to live a certain lifestyle, have certain things and spend a certain amount before you have earned to live that way, you will have to borrow money. That large chunk of debt will keep you from building wealth.
You don’t understand value: You buy things for any number of reasons besides the value that the purchase brings to you. This is not limited to those who feel the need to buy the most expensive items, but can also apply to those who always purchase the cheapest goods. Rarely are either the best value, and it’s only when you learn to purchase good value that you have money left over to invest for your future.
Mr. Stain clearly states the obvious: you cannot get rich by spending money. Rich people know this, which is why they spend less than they earn. They also have savings accounts & mutual funds & financial schemes & tax shelters & advisers & friends & stock tips & hedge funds & advanced knowledge of stock market crashes.
*
The punk rock truth is that we are not rich because a higher percentage of our personal wealth — which comes from our salaries — is being spent on the basic goods & services needed to survive in America. Many of us are losing money because we spend more than we earn on food, medical expenses, daycare, and transportation.
*
Money doesn’t trickle down in Amerca — it pools in the personal bank accounts of wealthy people and corporations. When the economy goes sour, basic things happen: rich people stop spending money, corporations tighten their belts and hire fewer people, prices rise, credit dries up, and liquidity in the marketplace disappears.
When the economy goes sour, the dollar in your pocket doesn’t go very far. In fact, you might not have a dollar. You might only have 50 cents in your pocket because your company only gave you a 3% increase, this year, and your daycare provider just raised her rates 10% because her personal expenses just went up.
It’s a vicious cycle. But really, it’s your fault.
*
Back to Jeffrey Strain. He’s right: you might not be rich because you drive that super-fancy 2005 Mazda 6 Wagon with 45,000 miles on it and worn tires; however, I suspect that you aren’t rich because you can barely keep your head above water.
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This year has been a total game changer in terms of things like wealth creation… we still need to take personal responsibility, but let’s state the obvious: inflation, when you factor in food, energy, and healthcare, is outpacing salary adjustments, and not by a little bit.
sump’in’s gotta give.
I don
I must be in a different demographic than who the writer of “10 (More) Reasons You’re Not Rich” is targeting. I have a bigger house than I need and I love how my car looks. Point being, we can afford this crap. I’m not “rich” by his standards I’m guessing. But judging by my personal dreams and goals, I find success all around me. My home, my work, my family. I bet the audience he’s trying to target doesn’t read “finance” articles on Yahoo!
4 Reasons I Know I am Rich:
1. My dog loves me (or at least doesn’t hate me, well I guess he really just tolerates me picking up his dooty, but that makes me feel good)
2. I own Breakin’ 2 Electric Boogalo (beat that Mr. Strain)and I watch it often
3. My job provides unlimited free ice cream.
4. 7 words: Totaly Mint Condition Star Wars Toy Collection (sorry, that also crosses over onto my 10 reasons I know I’m a nerd list)
That is pretty obnoxious. I feel rich right now because:
* We have two cars that get good gas mileage and they’re both paid off.
* I haven’t had to raid my savings account to pay bills in several months.
* We stay so busy that we don’t have to go to movies anymore because the TiVo is always full of stuff to watch.
* I know how to make an $8 chicken stretch for three dinners (/end shameless promotion of today’s blog post).
@Jason You are so brill.
@Ryan I was listening to talk radio on my drive from North Carolina to Michigan and I heard some dude say that consumer goods — when compared to 20 yrs ago — are cheaper and more accessible in our society. The American economy is built around cheap imported goods, but our income is still disproportionately spent on other areas like energy, fuel, health care, and food. (Although it seems like we’re all binge shopping and buying big screen TVs and GPS units.)
@Lee You must be one of those east coast elitists.
@Jimmy You are so awesome.
@Average_Jane You should do a theme post and ask people to comment on why they feel personally RICH (even if they’re not financially rich). There you go. Comments will go up on your site.
If I didn’t have to pay for health insurance I’d be rich. Time to get rid of those pesky things like retirement plans, health insurance, etc.
Laurie, what ever your taking tonight, I’ll take two!
Seriously its tough out their-East coast, West, and everywhere in between…I have employees that 2 months ago were struggling to pay gas for their car to come to work,and are trying to figure out how they are going to help pay for their kids college tuition.
Your right about $ not trickling down too…with Wall street stumbling some of the rich aren’t so rich any more either…regardless of where you are in the financial pecking order these are tough times…If you are paying your bills, have your health and have a little happyness consider yourself fortunate…time to focus on whats really important your family, friends and almost forgot your pets!!!
I disagree with you. I read the article, and while it is a bit oversimplified there is a great deal of truth in it. There are a lot of personal flaws people have (self included) that prevent us from building wealth in line with our potential. Whether it stops us from being “rich” can’t be determined because that word has a wide range of meanings depending on who you ask and what their values are.
I agree with comments above that Corporate America is bunch of stingy bastards. But there are still people who get ahead in that environment. They’ve either learned how to play the game or they’ve continued to build their skill sets so they can tell the boss that a 3% increase isn’t going to cut it and end up getting more. Either one goes back to point #5 “You don’t like to learn”.
@RachL 401ks are overrated.
@Mark Your priorities are right, especially the focus on pets.
@Steve Dude, of course you can’t become rich when you’re spending money on flatscreen televisions. I’m just saying that it’s a myth that Americans are floating excessive debt due to out-of-control & unnecessary spending. Ninety-five percent of all bankruptcies in America are due to excessive medical bills. Now you can say, “Well maybe you shouldn’t have a mortgage and a phone and a car if you have cancer.” (Not that you would say that.)
We tell our citizens to spend in order to stimulate the economy, we depress wages, we support a fucked up health care system, and we castigate our citizens and send them to Suze Orman when they can’t make ends meet.
It’s a mess.
We have a health care system? Did that just happen after I left?
I don’t think you can reasonably argue that the overwhelming majority of US debt/bankruptcies/foreclosures are due to health care costs, although I would expect them to make up a good chunk. Certainly coupling health care to employment sets people up for a double-whammy. And people who have been saving are better prepared to weather a crisis, whether it be health problems or something else equally unexpected. A lot of people really are dumb about money (in ways pointed out by the article) and those people are at higher risk of being financially wiped out by any unexpected turn of events (or even expected ones – like a change in their ARM).
What I am getting at in all of this is that it’s a better article than you gave it credit for. Perhaps point #11 should have been “You don’t take care of your health and safety”.
hmmm, I don’t think I’ve ever written an article that elicited quite such a reaction. My experience with helping people to save money over the last 10+ years is that they tend to spend into whatever they are earning – don’t get me wrong, there are certainly people that are barely getting by even doing all the right things, but most people I have come in contact with have quite a bit of fat they can trim — they simply don’t realize they are spending unwisely. Believe me, I’m far from believing the trickle down theory that you accuse me of supporting, but just because things are not the best for workers these days, that doesn’t mean that you still can’t save and build a nice nest egg for yourself. Yes, it’s going to take a bit more work, but it’s far from impossible.
My argument is that most people make some basic financial mistakes that keep them from saving money for their future. A big part of it is getting sucked into the entire consumerism system which is easy to do since it’s all around and blasting 24/7.
I’ll tell you what. You give me your budget and where your money is going and I’ll give you some otptions so that you can save that 10% of your take home pay for the future – they may not be easy or simple, but I’m sure that I can get you there if you are willing to put in a bit of effort.
The American mentality (in my lifetime, anyway) has always been bigger, better, to hell with the cost – and now everybody’s surprised by the result? My husband and I bought a little, tiny ranch-style house in 2006 that we are determined to hold on to. I drive a 1995 car, and his is a 1998 – both long since paid off and still running reasonably well. We don’t have a single credit card – only a debit card. If we don’t have the money for it, it doesn’t get purchased. Yet, if you listen to this article, we should be rolling in money by now, and that couldn’t be further from the truth. I got a pay increase of $600 at the beginning of this year – a fraction of a percent. I would have loved a 3% raise! According to this article, hubby and I are doing things right, but the fact is that money just isn’t worth as much as it used to be. I used to be able to go food shopping for under $100 – now it’s easily $125 or more – and that’s just one example. It’s like taking a pay cut, in a way, because it just doesn’t make ends meet any more, and it’s hardly due to some excessive lifestyle.
I agree with both Laurie and Mr. Strains, here: the TWO reasons we aren’t rich is that (1) our paychecks truly are shrinking (in real dollars), AND (2) because we don’t maximize what we’ve got.
I think I’ll have to write a post about this… will link. Stay tuned!
xx00
Elizabeth
You’re right about why the rich stay rich and the rest of us barely get by. Most of us earn pay that don’t equal the cost of living. The rich have financial people that help them keep their money.
What gets me more than anything is these people who give financial advice. Do they have any financial problems? All I can compare it to is a priest giving marital advice!