How Rich People Handle Money

Check out this great story from a reader, Drake, on how his rich father handles money.  Sometimes we like to think all rich people are driving around in brand new BMW’s and Mercedes… when in fact, most of those new cars are driven by people who can’t even afford them!  Here’s the story:

I’m not personally wealthy, but my dad is moderately affluent and I’ve learned the power of frugality and living below one’s means from him over the years. He’s been driving Japanese econoboxes and minivans for as long as I can remember. He’s driven 3 cars in his lifetime (all of which he wrote a check for in full at the time of purchase except for his very first car which he financed) – an ’84 Toyota Camry, a ’95 Nisan Quest, and an ’06 Honda Pilot. That’s it. He write checks for cars in full and drives them until they break down.
Currently he’s 55 and will pull in, oh I don’t know, anywhere from $550k to $700k per year (AGI – federal income tax takes a hefty $150k-$200k of that each year. I’ve seen the checks to the U.S. Treasury!) or so and yet he spends maybe $6k-$7k per month on total living expenses in a relatively low cost of living area (Texas). As a result his overall net worth is between $5M and $10M and yet he doesn’t harbor any notions of ever driving a luxury car. In fact, he doesn’t even consider himself to be wealthy. If someone were to ask him what social class he’d consider himself to be in he’d probably say “middle class” and then begrudgingly add “upper middle” as a qualifier if pressed.

Hello, Master

After ten months of unpaid leave from my company while we traveled the world, I knew it would be somewhat difficult to go back to my regular job.  We rode elephants in Laos, pet tigers in Thailand, feared for our life in Jordan, and watched the mesmerizing Northern Lights in Iceland.  We pushed ourselves beyond our previous limits when we hiked a mountain in Malaysia and visited 4 tiny villages in the remote mountains of Nepal as we trekked for 65 kilometers over four days.  We saw each other every day, and almost every minute – with the number of times we were apart for more than an hour easily countable on two hands.  We put every ounce of trust and faith in each other’s hands as we set out as a team to explore the world.

Our days were no longer defined by fighting through the week just to have two days to do what we wanted on the weekends – which are usually filled with doing chores we don’t want to do anyway!  Instead, we did whatever we wanted, whenever we wanted, and we were more active than we’d ever been before.  Our time wasn’t filled with lazy days on the beach, but instead of near constant motion of traveling to new cities, finding our home for the next few days, exploring the major sites, and at the same time planning our next destinations.

Are You a Debt Enabler?

We’re really good at enabling each other to get into debt because we rarely find happiness in telling our friends and family they’re making a bad decision!  Buying a new car you can’t afford – go for it, you deserve it!  Want to take that trip to Vegas – no worries, you’ll pay your credit card off someday!

Of course you could take the sinister angle and say we like watching our friends and family get in debt so they can’t get ahead of us.  Hopefully that’s not the case, but as Charles Kindleberger said, “There is nothing so disturbing to one’s well-being and judgment as to see a friend get rich.”

Really though, I don’t think that’s the case, I think we just like to see others do well in life.  So, the real question is this:  Are you a debt enabler?  To find out your level of debt enabling, take the quiz below and add up your final score. 

Chasing Our Dreams (from Revealing World)

I just had to share Jocelyn’s latest post with you; I may be biased but I think it’s really beautiful art.  If you have 10-15 minutes, it’s well worth a read.
The Psalm of Life by Henry Wadsworth Longfellow
Tell me not, in mournful numbers,
  Life is but an empty dream!-
For the soul is dead that slumbers,
  And things are not what they seem. 
Life is real!  Life is earnest!
  And the grave is not its goal;
Dust thou art, to dust returneth,
  Was not spoken of the soul.
(…poem continues)
I found this poem lying discarded upon a table inside a small home just off the railroad tracks running through a quaint but often overlooked small town in Oklahoma. That home once belonged to my grandmother. It’s where I spent lazy summer days and marveled at my grandmother’s ability to cook, and subsequently burn, every Southern dish to perfection. Now, it’s an empty shell of what it once was, but its serves as “home” for Dan and I as we clumsily and hesitantly decide how to proceed with our lives. The open poetry book, with is cover missing and pages ragged and torn, may not have been simply discarded, but instead perfectly placed.