It’s very interesting to talk with my coworkers about wealth. I frequently complain at work about how poor I am, and most of my coworkers think I am an idiot. They know my salary ($70,000 + travel bonuses) is high and that I am single, and to them that equates to wealth. However, they are thinking of monthly income and not net worth.
In terms of net worth my value is currently about -17,500$, about to be -18,000$ when my rent check clears. That’s almost 28,000$ of debt and around 10,000$ in cash/assets (some of which are frozen in retirement accounts). I don’t know about you, but being in the hole almost 20 g’s is not my idea of wealthy. If you’re thinking about people in debt several hundred thousand dollars for a house and cringing, I’m right there with you, but at the very least if worse comes to worse they can sell their house (although if they’re underwater that would really blow) whereas I cannot sell my college education (in the same sense as I can sell a house, technically by working I am selling my college education in a way).
However, net worth is not my definition of wealth. I’m going to have to go with Robert Kiyosaki in his book Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!
My takeaways here are:
- it doesn’t matter how much money you make, if you spend a penny more than you make per month you will forever be in debt.
- if your net worth is negative and you have no income streams to pay it off when you lose your job, you’re screwed.
- having no debt and a wealthy family or a strong community means you can live (frugally) pretty much forever, sans medical events.
So, what’s your definition of wealth?
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