I had lunch with my accountant the other day. Sabino is more than a financial advisor to me — foremost, he's a close friend. I told him about my current circumstances, about how I'm now making more as a writer than I did when I worked at the box factory, about how I've been saving money, about how Kris and I are beginning to contemplate paying more on our mortgage.
“How does it feel to be rich?” he asked me. “Has it changed you?”
“What do you mean?” I said. “I'm not rich.”
But then I paused and thought about it. “Oh,” I said. “Maybe I am.”
I've repaid my consumer debt. I've saved $10,000 for emergencies. I'm setting aside money for retirement. I live in an 1800 square foot home on half an acre of land. My wife and I are paying more than the required amount on our mortgage. Though my income is variable (and has dropped significantly in the past month), I make enough to support myself while doing something I love. Kris has a stable job that she loves. We own a lot of Stuff — so much Stuff, in fact, that I sometimes feel oppressed by it. By any objective measure, I am rich.
“Well,” I said. “I guess being rich doesn't feel much different than being poor. I still worry about having enough to pay my bills. Despite the fact that I have a huge cushion in savings, Kris and I strive to be frugal. We're always looking for new ways to save money.”
I thought for a moment. “What about you?” I asked. “Do you feel rich?”
Sabino smiled. “You know how I'm always joking about being a ‘poor migrant worker'? There's some truth to that. When I imagine myself, I'm still the boy who came here from Mexico, still the boy who worked in the fields. I'm not the man who owns an accounting firm. When I think of myself, I think of how poor I was, even though I'm not poor any more.”
I was fascinated. When I considered it, I realized I agreed with him. I, too, was raised in poverty, and now that my economic class has risen, I still have that mindset. On some level, I know I'm wealthy, yet I still think of myself as poor all of the time.
The truth is, I live in a nicer home than my parents ever owned. I've saved more money than they ever saved. I earn more money than most people earn. I have more Stuff than I'll ever need. I am rich.
Later, I told Kris about my conversation with Sabino. “Do you really feel poor all of the time?” she asked.
“I do,” I said. “I know it's irrational. I know I have more than 99% of the world's population, but I still feel poor. It makes me wonder: What does it mean to be rich?”
“Exactly,” Kris said, and she told me about a conversation she had with her friend Rhonda today. Kris had mentioned in an offhand way that she and Rhonda were rich.
“I'm not rich,” Rhonda said. “I still have to come to work every day.”
When pressed, Rhonda elaborated, “I have this concept of what it means to be rich. Rich people keep buying Stuff. They don't think about what it means to consume in the way they're consuming. When I think of rich people, there's a negative connotation. That's part of why I don't want to be called rich. Rich people are selfish. The rich don't care about other people.”
Kris and Rhonda tried to decide: Does being rich mean having a large income? Does it mean having a certain net worth? Are the rich selfish? Is being rich only a state of mind? Or is it something else entirely?
Are two people with equal $100,000/year incomes rich? What if one has $100,000 in credit card debt? Is he still rich? What if one has higher expenses because she has four children? Is she still rich?
I think most of us would agree that a person with a $20,000 income and three kids is poor. But what if somebody earns $20,000 a year, lives a frugal lifestyle, and is able to save $5,000 each year in a Roth IRA? If you have a small income but you're a good saver, does that make you rich? Is this a bad thing?
“All this makes me think that money isn't the answer,” I said after Kris told me her story. “It makes me think that being ‘rich' doesn't have anything to do with how much money you have. But what then does it mean to be rich?”
Ostensibly, the aim of this blog is to get rich slowly. My goal is to build wealth. But what is wealth? What does it mean to be rich? If becoming rich is a goal, what does that mean to me, and to the people around me? Is it all about money? Or is there something more to the equation, some sort of social capital?
Although I don't write about them often, I ask myself questions like these all the time.