We live in a condo association, mostly occupied by immigrant workers or retirees. The town we live in has one of the highest per-capita income in the country. Even a two bedroom condo costs around $150,000. We are renting here but, mostly the families own their condos. We have neighbors sporting Audi, Mercedes and BMWs. Whenever we go for a walk inside the complex we feel that everyone is probably richer than us.
Do you always look at your neighbor and wonder why he always drives the latest and best model cars? He also has a lot of time and money to spend in holidays abroad every summer. Recently, you also noted that his child also goes to one of the best schools.
No matter how rich you are, chances are very high that someone in your neighborhood is richer than you. I raised this question to the general public that why they think the neighbor is richer. There is a forum called “HARO” (Help A Reporter Out). Basically, news reporters can raise the questions for subscribers to answer. This kind of feature is very useful for writing research based topics.
Known bloggers always are subscribers to the HARO emails to reply to reporters’ questions hoping to get their name out in bigger forums like Yahoo, CNN, Times, etc.
I took a different approach and posted a question “Why you think your neighbor is richer than you”.
The answers varied between each other. I classified the responses into 5 major categories, as below.
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i) His job has better perks
The type of life a person lives is a reflection of the nature of employment he is in. People with better-paying jobs will tend to accumulate wealth and get rich faster than those at the lower paying jobs. For example, a multinational company CEO will be paid higher than an elementary school teacher.
You will establish that better-paying jobs will allow your neighbor to change cars frequently or own several, take kids to better schools and even go for holidays every summer.
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ii) They are more educated
The level of education is directly related to the income that one gets. You will, therefore, note that your more educated neighbor will have a flashy lifestyle because he advanced in education and, therefore, occupies a higher level in the job market.
A highly educated, MBA or Ph.D. person will always be regarded and relied upon by an organization to make key decisions. Because of wide knowledge, he is believed to drive growth and his organizations to the next levels. His income will, therefore, be higher because many organizations want to have him aboard.
For example, you will find that a director at a local multinational also sits in the government advisory board. This neighbor will, therefore, be richer than you. Make a step of advancing and reaching his levels.
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iii) Has a smaller family
A well-planned family is easier to manage even with fewer resources. If your neighbor has a small well-planned family, it will be less expensive and will have more resources to spend on luxury. The neighbor can also afford to make more savings to take children to better schools.
This is different for a person with larger family which requires more to feed, cloth and even larger shelter. It important to plan a family based on the level of income.
iv) They have additional income generating enterprises
Income that people receive from their payments might not be the best way to assess their richness. During the recent recession, even high-earning professionals found themselves on a downward decline.
However, it is personal income that has been cited by many people to give them richer lifestyles. By establishing additional sources of income, even those with lower perks are able to live better lives. This could be the key reason that your neighbor remains richer than you.
You neighbor’s investment is diversified, thus generating higher returns at lower risk compared to yours. They have investment in stocks, bonds and metals. Sometimes trading helps us to accumulate wealth, you may learn to how to trade gold.
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v) They are better at budgeting
Being rich can be a factor of great budgeting. You neighbor could be great at budgeting, either because he/she learnt the skills in school or has gained them at the work place. A great budget will be able to plan resources such that only important ones are given preferences.
Others that can wait are either pushed to the next payment or abandoned altogether. This enables your neighbor to make more savings to buy a better car, take children to better schools and even stock his business.
(Related – Why do personal budgets often fail)
These are the key reasons why your neighbor is richer than you. Consider advancing your career, learning budgeting skills, and establishing newer income generating activities to become rich like your neighbor.
But, there is an opposite view which is more appealing to me. I would like to feel that we are the richest. May be the rich neighbor is actually living with borrowed money. They may had been bankrupt before. They may be using items on lease to show off, you never know the actual fact unless you are very close.
Why should we worry about it then?
Where as we are living debt free forever. We can afford to buy home without taking in mortgage. Most of the times, neighbor’s richness is just an illusion. What is more important is to be self-sufficient, happy and fulfilled. How to be happy in Life is an old post I’d like my readers to read today.
It is important that you consider all the above points in your quest to become richer. At the same time don’t let this complex feeling, which can only make us more subdued, set in your mind.