What does "rich" mean?

[xiphias]

It is a truism that almost nobody considers themselves rich. Mitt Romney doesn't think he's rich. Warren Buffet does know that he's rich, but he's an exception -- an unusually self-aware person who has pointed out that he's rich because he's very good at what he does -- but also because he had the unearned good fortune to be born in a time and place that financially VALUES the thing that he's very good at, under circumstances that allowed him to benefit from his skill.

But one practical definition of "rich", or at least, "rich enough", might be something like, "not worried about one's basic needs or security, AND having the wherewithal to deal with the unexpected without significant suffering."

Lis and me? We're in that category. Our car needs repairs. The money for those repairs is already in the bank. We had some annoyances on a recent trip that required money to fix. That money was easily available.

We have no kids, so our expenses are far lower than a lot of yours. Our house has two rentable apartments -- which reminds me, the downstairs is empty right now, so if you know anybody who wants to live in a two-room apartment in Melrose, MA, let us know -- which significantly defrays our mortgage expenses. Our net worth trends upward over time, mostly -- not EVERY month, but MOSTLY.

By MY definitions, we're rich. Or at least, rich enough. More money would let us do more stuff, true. We could go on vacations, go on cruises, things like that. We could give more to charity. We could buy cooler electronics -- upgrade Lis's laptop every year, for instance. Get a second car -- actually, we probably COULD get a second car if we really WANTED to. Buy a new bed, since our current one is about fifteen years old -- I got it after college -- and Lis isn't really that happy with it. Maybe get rid of the vinyl siding on our house and replace it with something nicer; build a wrought iron spiral staircase in the back to replace the current ugly fire escape; re-work how stuff is vented in the house to add enough width in our chimney stack to make the first floor fireplace actually usable; or, my REAL dream -- cover the car park in back with a big deck, maybe even one that was strong enough to turn into an above-ground LAWN -- THAT would be cool.

But we've got an appointment tomorrow to talk to someone about replacing our gutters, and our front yard is coming together, and I've got a raised-bed garden in which I can grow vegetables.

We don't NEED any of that extra stuff. We actually can pay for all the stuff we need, including unexpected emergencies. And THAT, to me, counts as "rich". Or, at least, "rich enough".

Comments

[zachkessin.livejournal.com]

We are still working on the home ownership thing (I hate renting but in Israel I don't see much choice) but we are about $1000 from being out of debt and a year from now we should have a big emergency fund which will make life a lot calmer.

Its amazing how much easier life is when spouses are on the same page with money!

[chanaleh.livejournal.com]

hear, hear!

[phaedra-lari.livejournal.com]

I would modify your definition to include being highly confident that the "rich enough" state can continue to exist post-retirement. Many people have some rainy day savings but if you look at the trajectory of their retirement savings, it doesn't add up to security long-term. Also, there's dealing with more major unexpecteds than your example suggests to my mind... like a huge medical bill/disability or significant chunk of time unemployed. As you mention in your next post, strong community support/safety nets can change this dynamic a lot.

[bradhicks.livejournal.com]

I'm working on a bit of economics blogging for somewhere down the road, and I'm not even going to use the words "rich" or "poor," and I'm going to point out how useless the contradictory definitions of "middle class" are. In describing relative levels of wealth, here's the terms I intend to use:

• Desperation: Routinely has to do without the necessities of daily life; must decide, from day to day, whether to afford food or health care or sleeping indoors somewhere safe.
  
  
• Occasional Lack: Few if any luxuries, but during good times can reliably afford the necessities of life; subject to having to go without one of them, for brief periods of time, on uncommon occasions when things go wrong.
  
  
• Comfortable: Can reliably count on consistent access to the necessities of daily life, and can afford an occasional luxury item, every couple of years or so, if they budget careful.
  
  
• Luxurious: Can reliably count on upgrading some, but not all, of the necessities of daily life to luxury versions, and can frequently afford luxury purchases.
  
  
• Beyond Wealthy: Can afford anything they want any time they want it without ever having to consider the price.

Are you familiar with Robert Frank's analysis of Richistan? He divides the people most of us would call "rich" into three sub-categories: Lower Richistanis, Middle Richistanis, and Upper Richistanis, where most of the Lower Richistanis are people most of us would think of as rich, but who really are just upper middle class professionals who know that they're living beyond their means if they're trying to survive in Richistani neighborhoods.

[dancing-kiralee.livejournal.com]

Either what you mean by 'Occaisional Lack' is badly described, or you need a category between 'Occaisonal Lack' and 'Desperation'

That category is where (usually) my parents and I lived growing up... for example, basic necessities (food, shelter, etc.) were taken care of but we were unable to furnish our unfurnished apartment for two years, and slept on the floor in sleeping bags... or, at a later point in time, again, basic necessities (food, shelter, etc.) were taken care of, but we did not heat our apartment in the winter (something possible to do in Seattle, where it gets seriously below freezing one or two weeks in the year, at least most years - in fact we weren't the only family I knew who did it - but doing it was a risk - you tended to end up with condensation which encouraged mold, among other things - so only people with severely limited means would do it).

This is a distinctly different experience from 'Desperation' which I experienced after becoming an adult... for that matter, there were times my family experienced it as well, though fortunately they were infrequent. Choosing between food and shelter on a daily basis really is a different thing from choosing between buying furniture or cloths or gas.

Kiralee

[dancing-kiralee.livejournal.com]

I think what I'm talking about would be called 'Consistent Lack:'

'Consistent Lack:' Can generally afford the basic necessities of life (food, shelter, etc.) but frequently have to go without things 'comfortable' people in our society take for granted (furniture, heat and / or air conditioning, new clothes, a car); in bad times, may occaisonally become 'Desperate', in good times can afford *all* the necessities (even furniture), and possibly even a rare luxery.

hmmm... I think I need a word for things that are important, like furniture, but not necessities.

Kiralee

[bradhicks.livejournal.com]

I will also point out that interviews with the richest of the rich challenge the notion that there is such a thing as "enough" to anybody living in Upper Richistan, because, having gone far beyond any circumstance where they have to care how much money they spend, money is, for them, now all about keeping score. If they feel smarter than, better than, or harder working than even one other person, and that person has or makes more money than them, then by definition they don't have enough.

[dancing-kiralee.livejournal.com]

Yes, rich people and accountants think about money differently; not quite the way your description above works, but... money is for the making... if it's not out there making more, it's not doing it's job.

I'm an accountant, and therefore doomed, no matter how small the slush fund I have to play with.

(and yes, I'm also the same person complaining about your categorization of poverty above... is there any rule that says I can't be more than one thing?).

Kiralee

[sethg]

My wife and I recently started watching Dollhouse on DVD, and one thing that strains my suspension of disbelief there is the economics: hiring help from the Dollhouse must be far more expensive than hiring a typical mook (because you’re paying for the doll’s upkeep, her handler, the whole technological infrastructure that programs/wipes her, the hotel in an undisclosed location, and the black-ops team), but since the whole program is illegal and sooper seekrit, the expense is not conspicuous consumption.

[rymrytr.livejournal.com]

It is, as you indicate, a relative position.

As compared to Bill, the grandson of Fast Water Gates (of Microsoft), we are all "poor". But, if one is able to feel safe and have a confidence in the future, then one is rich.

For me, in my retirement and my senior years, I have enough to eat everyday; a 12-year-old car to drive that is in basically. good condition; the necessary money every month to pay my bills and be frivolous with as much as $100.

If however an event such as a huge medical bill/disability (as mentioned above) happens, or I can no longer make the $825 a month mortgage payment that I inherited when my Mom died in December, then I would be at the mercy of charity and/or homeless.

As for another definition of "rich", I have two sisters and several nieces, nephews, and friends that would help me if and when they were able.


Having worked in and lived in serious situations that sometimes teach us the difference between a petty life and a life lived within the knowledge of those things that are truly important, I have learned to live without 90% of the that fear of poverty, that a lot of people have hiding in the back of their minds.

For those that believe in creationism, there is (or should be) a trust in the loving concern of a being greater than ourselves.

For those that believe in evolution, (again and without fear), one should strive to do one's best and live with the outcome.

Either way, this might include the terminologies such as karma, fate, destiny, fortune, kismet, lot in life, chance, happenstance, dumb luck, predestination, etc. We should follow the words of the 1950s song by Doris Day; "Que Sera, Sera - (Whatever Will Be, Will Be)". Generally speaking, that goes along with

I apologize for waxing the floor – waxing the car – waxing the surfboard... and waxing philosophical! :o)

[metahacker.livejournal.com]

It sounds like you're what GURPS terms "Comfortable". A ten-point advantage. Rich, or rather, Wealthy, implies that you have those things without having to go to work every day to make them happen. (And it goes up from there, of course--but as you say, these are all positives, advantages.)

Glad to hear it's going well so far. I am also starting to relax a tiny bit and admit that, perhaps, I might be cresting into Comfortable as well...

[530nm330hz.livejournal.com]

איזהו עשיר? השמח בחלקו

(Who is rich? The one who is happy with what he has.) - Mishnah, Avot, 4:1