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.

34 Responses to “How do you know you’re rich?”

  1. Hiya, friend. First, thank you very much for the link. Like you, I didn’t want to give the inspiration for the post the satisfaction of mentioning him by name. But I’m glad to know that nonsense brought out some similar feelings in you.

    I think a thread that runs through our posts is the theme of honesty. That it seems disingenuous, at best, to proclaim you’re not rich while you have millions in the bank. Pointing at your 2006 vehicle as proof really takes the cake: that seems like an intent to deceive, at least to me.

    Like the cashier in the grocery store: trying to pull one over on other people really boils me.
    Done by Forty recently posted…Wealth Quartiles, and Who Is Rich, Anyway?My Profile

    • Revanche says:

      You’re welcome for the link!

      Yes, I both didn’t want to give the satisfaction but also this nonsense pops up seasonally so it doesn’t matter who said it this time.

      Yes, totally disingenuous! My car is also 16 years old, that still doesn’t make me not rich.

      • Land Shark says:

        I don’t know if my comments will be welcome here or not, but since I’m the one referenced with the $4.4 million net worth and the 2006 vehicle, I thought I’d at least try to explain my thinking.

        The original question was “Do you consider yourself rich?” Not, “Are you rich?” Or, “Do you think others would consider yourself rich?”

        By objective standards, we’re very wealthy, comfortable, fortunate, and yes, rich. I do consider myself wealthy, comfortable, and extremely fortunate. But I don’t consider myself “rich” — although I do believe I live a “rich life.”

        To me, there is a difference in what “rich” means to different people. Rich connotes the ability to live a life of extravagance… Lifestyles of the Rich and Famous kind of rich. The generic Millionaire Next Door however, would probably not consider him/herself as rich.

        At any rate, I’m sorry that how I view or consider my family finances was a point of contention with others.
        Land Shark recently posted…The Critical Importance of Tracking Your Net WorthMy Profile

        • Revanche says:

          @Land Shark: You specifically aren’t a point of contention, that’s why I didn’t name you. You’re just one current example data point among rich PF bloggers who seem to have this view.

          “By objective standards, we’re very wealthy, comfortable, fortunate, and yes, rich.”

          If your statement is correct, and I think it is, I just wonder: what’s the difference between *considering* yourself rich/wealthy and *knowing* you’re rich/wealthy? And what’s the benefit of telling yourself that you aren’t when you know you are?

  2. SP says:

    Reading people who are rich talk about how they are not REALLY rich is one of my favorite hate reads, but I really should stay away because it is not good for me, and I’ll never convince them… There is this level of superwealthy/ultrarich that is indeed sickening. The fact that billionaires exist and have the power that they do is wrong. But that doesn’t mean that I’m not rich in my own right, that I don’t have more than most, that $400k income is a mere dream to most people (including us!).

    Also, the backdoor Roth is a clear tax loop hole, and anyone who argues otherwise is an idiot. There are rules for I what incomes can use a Roth, there are rules about how much you can put in… and then there is this other little trick to go around the rules if you know about it (and if you don’t get tripped up by pro-rata). It would be one thing to argue that perhaps the Roth income limit should be increased a bit, but to say that this weird loophole should stay open makes no sense. I’m happy to use a loop hole when it exists, I’m sad it may go away, but I also support progressive tax policy, and weird loop holes are not progressive.

    • What SP said. I can afford to not get tax cuts for the retirement savings I do above and beyond the 403(b) and we don’t make 400k. Heck, if we don’t decide to drop everything and retire very soon, we could probably afford to not get tax cuts for any retirement savings, though I would likely have made different choices. And I will use the advantages while they exist because you better believe evil rich people are benefiting from them and giving their monetary savings to evil causes.

      It’s crazy to me how people are so upset about welfare to the poor but don’t realize all the different ways the rich are advantaged by the tax code.

      Like Revanche said–The biggest thing about being rich is that you just don’t have to WORRY. Even if I can’t buy a yacht (not that I would want one) or completely retire to a fancy city without a job lined up, a lengthy unemployment spell isn’t a big deal. I don’t have to nickel and dime things. I don’t have to worry about parking tickets or buying the wrong product accidentally or anything. Things on that level just don’t matter anymore. It is so relaxing and freeing.
      nicoleandmaggie recently posted…RBOCMy Profile

      • Revanche says:

        @nicoleandmaggie: Yep it’s absolutely foolish to not use the advantages that evil rich people will use to then go and fund evil things. We have to play the same game, legally, to keep up.

        There’s such a sick perception that rich people deserve their tax advantages while poor people don’t deserve to live.

        I have more thoughts on this that I’ll get into later. 🙂

    • Revanche says:

      @SP: I don’t go looking for the hate reads but when I see it, it’s really something else. There’s such a vast difference between our version of rich and the ultra rich and it blows my mind that people can’t see the gulf between us and billionaires.

      1000% agree with your take on the backdoor Roth. Yes, it’s a loophole and yes it’s fine to use it while it’s legal but whining because you feel entitled to it … nope. No I can’t understand that.

  3. bethh says:

    I think I’m about 10 years older than you; I remember when I was a couple years out of college and things were so so so tight. I had a friend who worked at the bank where my checking account was, and I called him once to ask him to put 17 cents into my account so a check wouldn’t bounce (he graciously gave me a quarter!). The notion of tracking so finely is totally out of my head now. Granted, for the most part now I use a card and pay it later, rather than write a check.

    I feel rich and I don’t have anything like what those people have. Here’s how I feel rich: I don’t lose sleep over money, it wouldn’t be catastrophic if I didn’t get paid for a while, and I can pretty much do what I want to do on a daily basis.

    All of that is within reason – and maybe that’s where a person could argue I’m not rich – but maybe we need better language around money and stability and levels of security.

    • Revanche says:

      I can relate to that memory so much! If I was even off by a PENNY, I was in trouble.

      I agree that the idea of being rich having to be equal to billionairism to be legitimately rich is very wrong because having happiness and contentment is a kind of richness no one can buy.

  4. Caro says:

    ‘Then I walk away because I don’t like hanging out with liars.’ << I laughed so hard at this.

    At this point I am definitely rich. Anyone in the two comma club is, unless they live somewhere like Indonesia that counts currency in the thousands. I used to have to set up a cash flow spreadsheet at the beginning of every year and update it every few days with the anticipated expenses to make sure that my bank balance would never dip into extreme bank fee territory. I haven't set it up for 2021 yet, I'm just continuing to jot down expenses at the end of the 2020 spreadsheet without adding it up so that when I finally get around to it I will know what the bank entries were. Not having to care about it, that's rich.

    • Revanche says:

      🙂

      I still keep a cash flow spreadsheet now! I love it but it was also born from the same need to make sure that I never go below 0. It’s a good planning tool.

      And not having to care IS rich.

  5. Wow. Just, that’s like Samurai-level of out-of-touchness. (Note to self: avoid PF Twitter)

    We don’t make whatever the heck amount people are talking about and we d-e-f-i-n-i-t-e-l-y feel rich. Not like yacht-rich or buy-an-island rich, but still making an amount of money that often feels obscene.

    I’m tired of people who have it so good paint themselves as the wronged party for having to make small sacrifices for the greater good. I don’t know if this is just something that’s always been there or what, but lbetween high earners raising a ruckus over not getting to keep their tax loophole, folks not getting vaccinated, local NIMBY’s preventing any new housing development in our HCOL area, all the “government regulation is evil” talk in crypto spaces, it’s hard for me to tell if we’ve always been so bad at cooperating with each other or if this short-sighted selfishness is just in overdrive. /rant
    Yet Another PF Blog recently posted…Financial Update – August 2021My Profile

    • Revanche says:

      In fact, that was my Tennis Coach reference 😉

      *My* PF Twitter is great, I follow lots of great people who actually think, but wealthy (and often white cishet male) PF twitter, not so much. I don’t have most of those in my TL.

      You know, like you, I actually can’t tell if we’ve always been this awful or if it’s worse now than ever. Or maybe it’s just more obvious because the internet makes access to that more possible.

  6. There is difference between the statistics saying that you are rich or wealthy and feeling that way. $4.4M is more than most people have but I guess it depends on their circumstances.
    Dividend Power recently posted…10 Bagger – Can You Find One? – Week In ReviewMy Profile

  7. Love the blog Revanche! You really worked hard to provide for your loved ones, and I admire that. I appreciate your positive outlook you have on life. We are all rich at heart. Keep up the great work!
    FreshLifeAdvice recently posted…Happy One Year Blog Anniversary Fresh Life AdviceMy Profile

  8. NZ Muse says:

    Tennis coach ridiculous.

    BAHAHAHAHA.

    I no longer look at my grocery receipts. I mean, occasionally I do glance at them, and tbh I have noticed things being charged a higher rate than what the shelf said… but I CBF. Especially if I have a toddler with me. That feels like a luxury I’ve gotten used to.
    NZ Muse recently posted…What are you feeding your mind? Hacking your brain like it’s the Facebook algorithmMy Profile

  9. FOGA says:

    Thanks for writing this. I did one similar when people were saying that 250K wasn’t a lot of money. *facepalm*

    I am definitely rich be ever metric at this point and I am well below 4.4 million net worth. Is it comfortable for me? Absolutely not, but it’s the truth.
    FOGA recently posted…It’s Okay to Not Be OkayMy Profile

    • Revanche says:

      I remember! It’s jarring to see how people fail to see how much that kind of money really is. And that’s even less than the kind of money we’re talking about today!

  10. anonymous says:

    I sometimes think that “feeling rich” is a shorthand for something different: either for feeling fully financially secure or for choosing live a particularly expensive lifestyle.

    We’re rich enough that we’re still ok despite the pandemic childcare hits and the cuts to working hours/income in our house. I’m really grateful to my younger obsessively-saving self, though. We’re losing ground, but at least we had the ground to lose. It could be so much worse and is, for so many people.

    • Revanche says:

      Survey seems to say that you’re right, and it looks like it’s mostly about the second one.

      I feel much the same as you – we had to work really hard and save obsessively when I was younger to be comfortable enough now to weather the pandemic and all the extra expenses. We’re so aware of how fortunate we are and we act accordingly.

  11. Liz says:

    I recently transitioned between jobs, and as I did have way too much PTO accrued, took 2 weeks off in between. Even without the PTO money (it paid out after I started the new job), I was fine for the 2 weeks, in terms of finances. I would’ve been okay for a few more if something delayed the first new paycheck (except that I managed to overlap health insurance by 1 day!).
    I know I am fortunate that I’ve been able to save that meant it was a stress-free break.
    As you mentioned the splurges at the grocery store, (yes I can afford a red onion for a few cents more!) & filling up the tank of gas. I’d consider myself if not rich, comfortable.

    • Revanche says:

      That’s pretty huge. So many people couldn’t live without that pay even for that two weeks or four. I remember a time when I was starting out that I would have struggled significantly to make it through any period without pay or stress.

      Cheers!

  12. Steveark says:

    I get where you are coming from. I have a little less than the terrestrial carnivore fish, but still feel rich, wealthy and incredibly lucky because I have more than I need. I quit working because earning additional money seems kind of pointless although I will still do occasional paid projects for friends if they are in a bind. Now I mostly volunteer for free. If you can buy anything you want, give generously to help others in need and leave an inheritance to your children some day, how is that not rich? But I didn’t take offense at his post, you aren’t really responsible for how you feel, that’s just emotion. And it does bother me when people say you need crazy amounts of money to be safely financially independent because $10 Million is simply out of reach for most people (in today’s dollars).
    Steveark recently posted…Pizza and PickleballMy Profile

    • Revanche says:

      “If you can buy anything you want, give generously to help others in need and leave an inheritance to your children some day, how is that not rich?”

      Yup.

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  15. Nicole (FKA RainyDaySaver & Penny Frugalista) says:

    Glad I’ve finally remembered to come back to visit your site and glad you’re still at it. All this PF talk makes me want to start another blog! But I have to admit that the tennis coach soured me on blogging…

    • Revanche says:

      So glad to see you here! I’d love to see you writing again! The tennis coach is just one bad flavor in the ‘sphere, there are still lots of us out here who don’t stink 🦨

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