To understand the definition of rich, we will use two people as an example, a man who works as a Neurosurgeon, and a woman who is a small time business owner/investor. Both these people make the exact same annual salary, which is $492,000. If you asked most people if both these individuals are “rich,” most people you ask would say yes, since their salary is much, much higher than the norm. However, by looking under the surface, you will find that one person is truly rich, while the other is not. Can you guess which person it is?
The Neurosurgeon had to spend years of intense training in order to be proficient enough to operate on patients, and this required many sleepless nights. The woman, on the other hand, who is a business owner, had to spend very little time in school. She managed her money well, has lots of raw common sense, and has made some wise investments which allowed her to increase her income. The Neurosurgeon works at one hospital where he earns his $492,000 salary. The business owner, on the other hand, earns her money from a combination of apartment complexes, duplexes, a laundromat, and a convenience store.
The woman doesn't have to get up and go to work every day. Apartment managers deal with the apartments and duplexes, she has managers running the day-to-day activities of the laundromat, and she also has managers and employees working at the convenience store. While she visits these places every now and then to make sure everything is running smoothly, she rarely does any actual work herself.
Instead, she relaxes at home with her family, doing the things she loves, while collecting over $40,000 per month. In addition to all this, the woman is very frugal. While she spends good money on her businesses, the acquisition of assets, and legal advice, she wears modest clothes, lives in a modest home, and drives a modest car. Because she lives in a Middle Class neighborhood, few of her neighbors realize just how wealthy she really is.
The Neurosurgeon, on the other hand, must be at work each day, and he rarely has time to spend with his family. While he was in school, he accumulated an enormous amount of debt, and much of the money he earns from his job must go towards the repayment of his debts. However, since he left school, his debt has only continued to grow, since he believes in living a “status” lifestyle. He has two luxury imported European cars, he spends thousands of dollars on vintage wines, and he also purchased a yacht, though he rarely has time to actually use it.
The Neurosurgeon eats out regularly; he rarely has time to eat at home with the family. Fast food restaurants are out of the question for this man, he only dines out a five star establishments. While he earns a good salary, lives in a status neighborhood, and enjoys many luxuries, the strain of his job is starting to get to him. As a Neurosurgeon, he has to be perfect; one mistake with a patient could lead to a malpractice lawsuit that could end his career. He wants to get out of debt, but his desire to live a status lifestyle makes this goal elusive. To make matters worse, his relationship with his wife is starting to crumble, and if they divorce, he may have to pay a huge settlement.
This doctor is in his mid forties, and he hasn't put away as much for his retirement as he should. While he conveys the facade of wealth and extravagance, the truth of the matter is that, behind closed doors, he is becoming frightened and concerned about his future.