Wednesday, December 3, 2008

What Does It Mean to Be 'Rich'?

I should have realized that declaring yourself the descendant of "rich" parents would cause a lot of unrest amongst my readers. I think maybe most of you pictured me growing up so poor I had to share a bowl of slop with my ten brothers and sisters in a one room house. Not so true. But was I rich as I so famously declared in this post? Or, more importantly, are my meddling yet charitable parents rich? I'll let you decide that in a bit.

But first, what if you decided my parents were filthy, old money, Bart Bass on Gossip Girls, rich? What would that mean for me? I have about $100 in my bank account right now to last me until next Wednesday. Hardly enough money to buy a drink at The Plaza. And sure I get a couple of handouts once in a while, but if you are interested in trading a father who gives you a hundred dollars a month versus one who lets you make your own relationship decisions, then give me your address and I'll gladly trade with you.

Yet, I live in a low cost of living area so my salary of $43,600 is well above the median household income for my city - $33,000. But I never feel rich because I am paying off so much debt. If and when I move in officially with Boyfriend, our household income will be over $130,000 and we will be statistically speaking quite rich. We probably won't feel rich then either because we will both be saving and paying off debt.

MSN Money did an article today on how to tell if you are rich. Because of the reaction to my post I tried to see if my parents could officially be categorized as "rich." The closest city listed on the chart was New York City, where the average household income is $240,000. My parents live in a suburb of New York City and I don't know how much their income is. My Dad is self-employed and therefore his income varies greatly from year to year. My Mom's salary is public information, as is mine, and it is about $100,000. They also pay about $25,000 a year in property tax. Rental income brings in about $20,000-$30,000. Hypothetically, let's say they make a combined $350,000 a year. This would only make them "rich" in NYC if they had no kids. Yet they have two living at home.

In short, my parents are well off but not crazy OMG rich. You may think differently if you spend time with them. They like nice things and were delighted to throw my sister a 200 person wedding. They belong to a private club and have hired help clean the house, landscape and do home improvement tasks. Growing up I had nannies, yes nannies, but in my Mother's defense, she was getting her Master's Degree at the time.

Yet I worry about my parent's finances. They have taken a huge hit in their retirement accounts with only five years to go before retirement. My little sister is expected to start college in a year and a half and we never qualify for financial aid. Most of my parents' wealth is tied up in real estate that is declining in value and they have expressed no desire to ever leave our mammoth house behind.

Bottom line, no matter how much money my parents have, I'm just as poor as a church mouse and though my Dad is paying $303 a month now towards one of my student loans, there's no chance I will get a $50,000 windfall like Her over at Make Love Not Debt towards paying back my loans. But stick with me and I will pay back my student loans (largely) by myself. Probably then I'll have to start a new blog about how "rich" I am.

What about you guys? Anyone else rich on paper but not in reality?


Sunflowers said...

Why would you have to defend your mom's decision to hire nannies? I would hire one in a heartbeat if I had kids and the money. ;)

I honestly don't understand what it means to have a parent who doesn't "let" you make your own relationship decisions. Especially at your age. I'm sorry to harp on it again, but really... how can they control your decisions? Financially? Your dad only gives you a couple hundred a month. What are they going to do - disown you?

Anyway in response to your question - my parents are definitely not rich (in reality or on paper), but I always had a nice house, good food, and fun trips as a child... so it was all good. :)

Sallie's Niece said...

Yeah I know, it's totally screwed up and I should have just told them to butt out. However I signed the friggen lease agreement so I'm sorta stuck for a few more months. I want to break it but that requires having some money saved up for when he inevitably tries to charge me for smoke damage.

Sallie's Niece said...

Oh and the nannies were wonderful! I remember all of them fondly. I think it was a great decision on my mom's part - she did have 4 kids after all. But every time I tell other people about it they think I'm a spoiled brat! Go figure, right?

Sunflowers said...

Wow, 4 kids would be tough... even with a nanny!

People are stupid. ;) I agree, I think it was a great decision.

Shtinkykat said...

When you commented your parents were rich, I suspected that they were upper-upper middle class and not necessarily uber-rich like the Trumps. And yes, I would agree that your parents are "rich".

(I should write about my parents. My parents are definitely not rich and it's a sad story, actually.)

Most people don't realize how onerous student loans repayments are, especially in the amounts you and I owe. I make a doggone excellent salary but I'm only able to make small dents in my debt. Based on my salary, I'm a rich spinster. But I think my net worth chart speaks for itself.

DogAteMyFinances said...

This is a really great post. Really got me thinking.

I would think money (even if not Gossip Girl money) makes a big difference later in life. I worry about my parents running out of money. I've tried to talk them into nursing home insurance, but they won't even listen to me.

Anonymous said...

My situation is quite similar to yours. Although I come from an affluent family, it didn't make the slightest bit of difference towards my money-sense, because if money is never as issue when you're growing up, you have no opportunity to learn about it. And my parents never discussed money, that is still a no-go topic in that house.

I think that when you come from that type of background, you aren't really better off than anyone else once you leave the nest. Sure, there are perks when you're visiting home, but other than that I think everyone's on a pretty equal footing in the real world.

Interesting post. :)

Anonymous said...

great post! i actually looked at that MSN article, too, and noticed that, in my area, my husband-elect and i are firmly middle class. if, however, all of our student loans were paid off, i honestly think we'd FEEL like we were rich, or at least, more affluent than necessary. i often think about what my salary feels like now, and what it will feel like in a year or two once i have managed to pay off some debts that are currently large monthly payments. the take home pay will be the same, but the removal of those debts will make me FEEL wealthy. interesting how relative it is, and how much stock people place on salary numbers without knowing the rest of the story, which can either enhance what seems on paper like "good pay" or reduce that salary number to a scraping by existence.

asgreen said...

It is interesting how in different areas of the country people have different viewpoints of what "rich" is. My parents fall in that millionaire next door type, but they also started out pretty poor. My mom started teaching when the salaries were so low that she could have a full time job and still qualify for welfare!

asgreen said...

Also, I don't think it is wrong to let your parents help you out. Just as long as you are aware that they are helping you and thankful. I would never have been able to buy an apartment if it wasn't for them, and we all benefited since it is in all of our names. My mom has offered to pay for braces for me (I may be frugal but at 28 I'm going for the invisalign). A part of me feels guilty about saying yes, but another part of me knows I'm lucky and I should take advantage. Yes I'm privileged, but I also know it.

Great post!

Serendipity said...

My parents had money until I was about 12. Money for our little small town was about 45,000 a year when the average was about 20,000. I had a maid and remember my mom not letting me attend outreach programs like Boys and Girls Clubs because I wasn't poor. Then my mom got terminally ill and it all went down the tube. Now, my father nets about 60,000 a year but has high child support payments and the FAFSA thinks he is suppose to pay for my college education? I mean, if I need help he'll help me but I try not to because then I got the whole " if you werent ready to live on your own yet" speech. I have to go on student loans, at least to pay for my classes and books because according the FAFSA, I don't have a kid, I'm not married, and I'm not over 24 so I have to go based on my fathers income. People don't realize how these things work and how frustrating it is to us! I'm sorry but those nay sayers got me heated!

Anonymous said...

Okay, I am flippin' jealous of your parents and Make Love Not Debt! ;)

And I take it your parents did not share their financial knowledge with you while growing up? I'll stick with you and watch you pay your student loan debt down, down, down.

Daizy said...

Very interesting. I always thought that rich people had cable TV, a pool, and a horse. Or maybe that's just what I want :)

Anonymous said...

I grew up middle class. My friends were wealthy think CEO's of Fortune 500 companies. When I graduated college I worked for a major company and made really good money but then I had children. My older son had a nanny for 4 years. But I don't think we were rich.

My husband's parents have quite a bit of money but they don't spend any. They would give us anything if we ever asked but we never have. They make more off of the pine trees on their land than we do in a year.

I know plenty of people who would be "rich" compared to me if you looked at their paycheck but I am sure that we have the much better financial picture.

Also, $350,000 in our small town would be like a multimillionaire in NY.

Anonymous said...

While yes, we did received a generous windfall to pay off a large chunk of student loan debt, that doesn't mean that we go out an blow all our money on kittens. The windfall was a very unexpected gesture by a family friend. Before that, we definitely were not going to receive any help from anyone. We just got lucky.

It took us 4 years since we got out of school, but our incomes will be about the same as your boyfriend and yours. We'll still be putting the same amount of money each month towards the remainder of our student loans. We're still watching TV on a set from 1984. Debt does have a bad habit of making one not feel so rich.

FB @ said...

I like this post because it shows a perspective from many different angles. Nothing is what it seems.

I do agree with you that when I earned $65,000 and I paid down debt, I felt poor-ish.. but I knew I made good money so it made me feel a bit guilty as well... hard to say.

Am linking to you now!!!!

Sallie's Niece said...

Thanks everyone, glad you liked the post!


undercover vixen said...

i liked it too. I wish some of the more negative people on the last one had posted their thoughts too though. I am with you on the parents too. I am 23 almost 24 and they still have some hold on me even though i am independent.