By: Revanche

How do you know you’re rich?

September 21, 2021

Every so often, a PF blogger tweets: do you think you’re rich?

For myself, I like Done By Forty’s approach to the question. I like reflecting on our good fortune and where we’ve done well, where we’ve made mistakes, how we can better appreciate all that we have.

The conversation on Twitter took a somewhat irritating to me turn. In the land of at least semi-self-delusional personal finance, you apparently can’t be rich if you don’t have at least $10M in spending money, or if you don’t make at least $100k more per year than whatever tax bracket or income level is being scrutinized for tax purposes. It turns out the latest furor is something along the lines of $400k annual income “isn’t that much”.

O RLY.

This latest meltdown was linked to the proposed changes to the treatment of the backdoor Roth. People can really fix their mouths to say that four freaking hundred THOUSAND dollars a year in income doesn’t equal being wealthy or rich or whatever equivalent to NOT POOR that is. Look. I don’t make that kind of money. Together with PiC we still don’t make that kind of money. But we also aren’t playing the kind of nonsense that is PF bloggers crying poor. That’s just ridiculous. Tennis coach ridiculous.

In any case, with that sort of conclusion, the phrasing seems silly. You can think anything you want. That doesn’t make your thinking right or true. Case in point: One blogger who regularly tweets about their $4.4M net worth replied that he doesn’t think they’re rich. Okaaaaayyyy. If they can snow themselves into thinking they’re not rich, I wonder what other lies they tell themselves. Then I walk away because I don’t like hanging out with liars.

We may not FEEL rich when compared to our neighbors and coworkers but we are. Here are a few ways that we know.

Can you afford to make mistakes?

In 2003, I couldn’t afford a single financial slip. I juggled expenses like hot potatoes and any single tiny mistake reverberated for months. I still remember the domino effect that was set off because my dad cashed a $50 check several months after I had written it. It had been so long that I forgot to keep carrying that deduction down the check register, and it overdrew my account. I had pit of my stomach anxiety and heartburn for WEEKS after.

Last week, PiC picked up an extra large can of tomatoes at the produce shop, and when he checked out, he forgot to put it on the conveyor belt so before they left, he paid for it separately. Then when he got home, he realized that the cashier hadn’t bothered to tell him that she had already charged him that $2.59 at the top of the receipt. Her dishonesty REALLY annoyed me, but we aren’t hurt by it.

Can you afford the basics?

In 2002, I struggled to pay for college, rent, food, AND gas. I skipped food A LOT. I ate one meal a day during college while working three jobs plus overtime. I allotted myself $75 a month for gas, groceries, everything. 

Now, my children have never missed a meal, a snack, elevenses, fifth snack. Whatever you call it, no one ever goes hungry. We put gas in the car whenever we need to without checking the bank account first. We can go to the grocery store without a list if we’re feeling wild. PiC going off the rails at the grocery store is just cause for amusement, not worry, fear, and rage that we won’t be able to afford the bill or that paying this bill means the electric bill will be paid late. I don’t do those mental Tetris exercises, anymore, trying to figure out where I’m going to slot which portion of the paycheck at what time to hold off which late notice. I just pay the bills and move on. This is still a deeply satisfying exercise for me. Knowing I can pay our bills and we have the money to cover them.

Can you afford some extras?

I used to daydream about “when I’m rich”: I would buy books and  comics, I would save so much money, I would buy more books and comics. But until then, no extras of any kind. I was exceptionally strict about discretionary spending because I was desperate to get out of that poverty cycle.

Nowadays, I still think it to death but I CAN buy the things we need and some things we want. And I even do sometimes!

Can you save regularly?

For several years, I would trickle a tiny crumble of cash into savings, scraping up a few dollars and cents every month to hide it away.  I had to get really creative, relying on credit card rewards to pay for certain necessities to free up that tiny bit of cash to save. It took years to save $5000 for an emergency fund.

Today, we save first, then we pay our bills. It’s so freeing to be able to pay ourselves first, and still have anything left after paying bills.

If we can do all these things…

I am pretty sure we’re rich. There are a lot of other ways our not-poorness works in our lives but these are my biggest indicators.

Sure our net worth and income doesn’t keep pace with some of the more obnoxious, and maybe not coincidentally, assuredly wealthy members of the PF community but we also don’t need to pretend that we aren’t incredibly fortunate and well off just because some people are ahead of us. In absolute terms, we are rich in so many aspects of life including money. We’re not retire early rich, or generational wealth rich, but we are self sufficient, can handle our own emergencies, can help folks out, and enjoy life more than stress rich. That’s pretty awesome.

With this wealth, we have a responsibility to properly grow our wealth and teach our kids to handle whatever we might give them. We need to teach them to have giving hearts and minds and HONEST minds about what they have. I tell JB frequently that we work hard AND we are very lucky too.

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