keeping "down" with the jones'

[aussierogue]

Hi

No one said anything about 'all' luxury purchase are bad.

Also cloudy day doesnt read poeple posts properly. I havent said that I was a millionaire because I have earnt 200k over 5 years. It was to merely show that I do have money. It was part of the reason. he even called me ausprop...and he assumed i was poor....wrong wrong wrong.

If anyone is making genralisations its him and its fits his own paradigms. Tell us about yourself cloudyday. we want to know more..

If someone can give me an example of black and white thinking in previous posts then please do...

Surely there is room for people to undertand that most acts of consumption are not based on any real need. Thats ok we are a rich society. There is so much literature about the west being a consumer driven society that its not funny. Nothing new here...

Even the 'millionaire next door' link on wikipedia spends 3 paragraphs explaining that the west if full of people who buy expensive cars are mostly posers who cannot afford it...geez...

Why does this make people uncomfortable?

 

[rugrat]

Ozperp - I must give you kudos too often, I never seem to able to when i want too.

 

[aussierogue]

http://en.wikipedia.org/wiki/The_Millionaire_Next_Door

Here is the link

qte
Most of the millionaire households that they profiled did not have the extravagant lifestyles that most people would assume. This finding is backed up by surveys indicating how little these millionaire households have spent on such things as cars, watches, suits, and other luxury products/services. Most importantly, the book gives a list of reasons for why these people managed to accumulate so much wealth (the top one being that "They live below their means"). The authors make a distinction between the 'Balance Sheet Affluent' (those with actual wealth, or high net-worth) and the 'Income Affluent' (those with a high income, but little actual wealth, or low net-worth).

unqte

Feel free to apologize anytime soon - hehe

Im expecting silence though..

 

[lizzie]

So where did John Ilhan get his millions to buy his Lambo and his multimillion dollar houses? I guess he was a faker as Ausprop would say since he was young and driving Lambos around.

Mark Bouris offloaded Wizard for $500 million, not $14mill. Where did you get that figure from?

what i was getting at is that you said that only people on 1/2mil income can be considered truly wealthy ... and i am pointing out that john and mark and jan did not start out on 1/2mil income, but made their way up from the bottom. i imagine they were living frugally at the beginning of their journery ... and most people here are at the beginning of their journey.

you will find very few on the forum who can spend $10k on a present at a whim, because those people have other things to do with their time.

hence - those of us that are on here are who we are. on our journey towards that $10k present status.

i agree that not all lambo drivers are drug dealers - and whatever else you've stated - but do not mock those who have started from nothing and are proud of their achievements.

to own more than on ip puts many of us in the top 1% of australian investors - that's something to be proud of. they are getting off their backsides and working towards being financially independent. i have no problems with someone reaching the stage and being able to say "yay, i have a million in equity outside of their ppor." i say "good on them. they are doing something with their lives instead of expecting a government handout at 65."

and they can also genuinely call themselves a millionaire - regardless of whether that irks you or not. if that makes them proud and happy and determined to turn that $1mil into $10mil - then great. that first million doesn't mean they are a multimillionaire or billionaire - but it is still a major milestone - even more special if they are on $60k income a year.

if someone is earning $1/2mil a year and cannot have the equity of a millionaire (in nonppor assets) within 3 years purely by saving, not even investing, then they are pretty poor, imo.

so - put your head in for bagging those who are proud of their achievements.

 

[skater]

Ditto.

Unfortunately I can not give you Kudos, Lizzie, but the thought is there.

 

[JIT]

Rich rich. CEOs, high paying jobs. This is your $500k/year salary MINIMIAL earners. They have a couple of properties and......Lambos......

So do you consider this typical person you describe on $500k/year with say 1 X PPOR, 1 X holiday home and say a Lambo... to be ''wealthy''?

Their net worth is strictly ZERO (excluding PPOR's, vacant holiday homes/holiday letting types and non-income generating assets).

They would be paying $202k/year in TAX.

If they lost their JOB, they could be in a lot of strife.

For someone on such an income they are in a way ''underperforming''.

They would need $10 million net assets returning a net of 5% pa to achieve a net passive income of $500k/year (to replace their JOB income)...

THAT would be wealthy.

BUT, no different to someone on $50k/year, with $1 million net assets returning a net of 5% pa to achieve a net passive income of $50k/year.

Whilst I agree with some of your sentiments, eg. there is a lot to be said for becoming a high income earner, the general gist of what you are saying smacks of ignorance and inexperience.

As a matter of curiousity, do you have ANY investments of your OWN?

And if so, what sort?

 

[cloudyday]

As for me, I have an aunty and uncle who are Extremely well off. They would (in my estimation) be worth $millions after debts and expenses. They are a mixture of frugal and ostentatious.

...Nor would you know that they gave each of their children a house each when they marrie

Hey some people like to flash and show off their hard work with a brand new car, for others it's spending even more cash buying things for their friends/family. The only difference in this situation is that uncle derives more pleasure from giving than from driving around in a flashy car, however the fact he could spend $400k (estimating here) on EACH of his children without much "stress" indicates he is a true millionaire and not a frugal struggling upperclass family.

So do you consider this typical person you describe on 500k/year with say 1 X PPOR, 1 X holiday home and say a Lambo... to be ''wealthy''?

Not sure if you read what I said but it was "a couple of properties". E.g. 4/5x $800k homes.

 

[aussierogue]

Im not sure why people are excluding ppor from wealth calculations.

You can access equity, reverse mortgage, get a line of credit or you can sell and rent.

I would cosnider someone with a 3 million dollar house full paid off with no other assets as rich. Why because they could sell it, invest it all at 7 percent, rent a similar house and live wealthliy for the term of their natural lives....

Even living of the interest of 1.5 million will put you in the highest 10 percent income bracket in the world.

Cheers
Aussie

Note - i do not own a PPOR.

 

[Perp]

If someone can give me an example of black and white thinking in previous posts then please do...

BTW - Whenever I see a man under the age of 40 driving a Porche, Lambo, Merc etc rather than being envious my initial thought is a no money drug dealling 'gangster'! (or a realestate agent with the car on lease)

I havent said that I was a millionaire because I have earnt 200k over 5 years.

You will be happy to know that recently i officialy became a millionaire. For the last 5 years i have had a salary over 200k not including bonus's.

You may not have meant to link them, but you can see how the misunderstanding came about, surely? (And presumably your "bonus's" aren't for spelling and grammar. )

Ozperp - I must give you kudos too often, I never seem to able to when i want too.

Aw shucks, thanks rugrat.

 

[cloudyday]

what i was getting at is that you said that only people on 1/2mil income can be considered truly wealthy ... and i am pointing out that john and mark and jan did not start out on 1/2mil income, but made their way up from the bottom. i imagine they were living frugally at the beginning of their journery ... and most people here are at the beginning of their journey..

When they started out they were poor. It was ONLY when they started earning a big salary did they start acquiring assets. This is the period when I would classify them as rich, but I don't understand what you're trying to get at?

Would you consider some guy working at McDonalds to be wealthy? He might have what it takes to one day "be rich", but until he actually starts making money, he is still poor.

Also cloudy day doesnt read poeple posts properly. I havent said that I was a millionaire because I have earnt 200k over 5 years. It was to merely show that I do have money.

hrmm in one post you said you were a millionaire and then in another you said you weren't. Sorry, didn't know which post to relate to. :-/

This cartoon depiction sums up how society thinks of each other.
http://www.fortunewatch.com/career-path-wow-how-true/

 

[JIT]

Not sure if you read what I said but it was "a couple of properties". E.g. 4/5x $800k homes.

No way, did you really say that, you can't be serious?!

Your ''rich rich'' person has 5 X IP's?!!!!!!

Weren't you just slagging off 5 X IP owners??

This is just another case of ''mines bigger than yours''.

Your credibility is waning...

Simple question, do you have ANY investments of your OWN? If so, what types?

Or are you just another spoilt Gen Y ''rich rich"?

 

[JIT]

It was ONLY when they started earning a big salary did they start acquiring assets. This is the period when I would classify them as rich

Oh boy.

Read this sentence a few times over and over and tell me if it makes any sense.

I suggest you need to read something like "The Richest Man in Babylon'', as your financial literacy seems very poor...

Don't be embarrassed mate, we all ''put our foots in it'' from time to time.

 

[JIT]

Why does this make people uncomfortable?

'Cos when you really dig deep and be totally honest with yourself it's probably true for most of us.

 

[Player]

Some reading

Required reading for Millionaire 101:

The Millionaire Next Door by Stanley and Danko

The Millionaire Mind by Thomas Stanley

Everyone's values (and the hierarchy of such) is different.

As has been mentioned adequately throughout this thread, income is only part of the story. It is what one does with what they have that will exponentialise over time to compound into real wealth

An income of 500 K pa or even into seven figures does not guarantee that a person will have any left over to realise as net worth if they spend more than they earn and then need a loan or go into overdraft to pay their taxes

Whoever wants a million dollars (or mutli-millions) had best become a millionaire (with their thoughts and actions) in their mind first. Even if one does stumble upon riche$, unless they have the investment mind-set covered, that money is unlikely to reside with them for very long.

There are plenty of examples of famous sports people and other celebrities who over-consume on high status artefacts who have squandered hundreds of millions and are left in debt. Similar strories with a large percentage of big-ticket lotto winners. There are exceptions of course, however all the wealthy people I know, got a plan in their head (or on paper) and executed the plan bit by bit by taking action to achieve their goals. They did not start by becoming slaves to brands.

Wishing all and sundry here (multi) millions

 

[lizzie]

When they started out they were poor. It was ONLY when they started earning a big salary did they start acquiring assets.

ummm - i think it might be the other way around.

the assets they aquired (businesses they built, investments along the way etc) are what made them rich. the assets that made them rich came first - the assets that "prove" their rich (lambo, holiday house etc) are what came after.

don't confuse the two.

p.s. apologise for getting mark bouris' figure wrong - for some reason the lessor figure just stuck in the head.

 

[skater]

Lizzie beat me to it.

To be honest, your posts show that you are very naive, but instead of admitting that you have been caught out, you continually take the words you have been given and then quote only half of the message and try again to prove, once again, how you are right and we (as a whole) are wrong.

As others have said, read The Millionaire Mind and other books to get a look inside the mind of many people that are wealthy. I am not talking about those on the high salaries that throw money around. In many instances, as soon as the job is lost, so is the lifestyle. They are not truely wealthy. I am talking about the self made wealthy. Those that can support their chosen lifestyle long after the job has gone.

For instance, I could go out and buy an expensive car tomorrow. I have the funds just sitting there. I choose not to. I don't want a new car. A car, to me is just transport from point A to point B. So long as my car is comfortable to drive, has airconditioning and a radio, I am happy. I would rather use the funds elsewhere.

Similar, I could sell down a few properties and buy mulit million dollar property to live in. Again, I choose not to. Where I am is comfortable. I have family & friends reasonably close. I have ducted airconditioning and a pool. I would rather have my IP's sitting there churning out an income.

 

[Toon]

ummm - i think it might be the other way around.

the assets they aquired (businesses they built, investments along the way etc) are what made them rich. the assets that made them rich came first - the assets that "prove" their rich (lambo, holiday house etc) are what came after.

don't confuse the two.

Very well put Lizzie.

 

[aussierogue]

Guys - I am a millionaire - its just that the fact that I have earnt 200k plus over 5 years isnt what made me a millionaire - its also been through investments etc etc

Geez - are you guys drunk?

(I have actually earnt much more due to bonus payments, investments and business interests.)

Oz perp - you have a marvelous way of skirting around the issues. And you go quiet when you are proven to be wrong. (and yes I am a bad speller). How about a proper reaction to my arguements.

Cloudy day - i challenge you to a duel!

BTW - I am just back from eating at a 3 hat 120 buck per head eatery. So if your poor bad luck!

Why cant someone (please anyone) give me kudos?

 

[Francesco]

I agree, I think it's the new 'cool to be frugal' and I actually think about bloody time. Doesn't kill anyone to hang out their own washing, cut down on power use, grow a few veggies. It's not just about saving a few bucks but it just makes sense to use less energy (except kilojoules of course)

Yes, I agree. Why don't we take only what we really need from the earth and environment and not waste?

 

[aussierogue]

Jit - Your level of self awareness is commendable!