Do your neighbors seem to have more money than you?

A recent blog post raises an issue that you may be wondering about:

“You look out the window of your home each night after dinner, staring across the street at your neighbors. You long for the cars they drive, their weekly manicured lawns, and even the vacations they seem to take several times a year. … I often look out my window, too, staring at the gorgeous homes and cars wondering how they manage to pay for them. After all, we live in the same neighborhood, our kids go to the same schools, and their salaries aren’t that much more than ours. “

So what makes them seem more prosperous?

  • They may not be more prosperous.  They could be living paycheck to paycheck or even deeply in debt while you are saving for retirement or paying tuition bills for your college age children.
  • Some of the things you see maybe perks of the job: a company car for example.
  • They may be older than you, have a paid-up mortgage and have quite a few more years to save.
  • The may be great shopper who know how to find a “deal.”
  • They may have inherited money from older relatives.

However, the most common difference between the people with flashy cars, manicured lawns and marble counter-tops in the kitchen, assuming roughly the same age, is the first point.  The conspicuous consumers are often people who have little in the way of savings or assets.  The “Millionaire Next Door” by Tom Stanley tells us that the people who have real financial wealth are those that live below their means, live in smaller houses, drive older cars, are still married to their first wives and  take cheap, infrequent vacations.


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