Lifestyles of the Rich and In Debt
After reading an article in the New York Times I thought we should revisit our discussion of millionaires. Now, none of the clients I’ve worked with have done any of what you’ll find in the New York Times piece, but it does remind me of a trip I took to New York a few years back.
I was working for one of the larger banks at that time. About a year prior, we had completed a merge and switched over to the other banks computer systems because they were significantly more advanced. The company had decided that the New York branches were going to stay on the old systems for a year - no one really knows why. At any rate, my trip to New York was to help some of the branches become familiar with the new systems. I spent about a week down there and worked specifically with the bankers, teaching them how to upload loans and so forth.
The very first Monday I was there, a woman came into the bank and haughtily asked to speak to her banker. When her banker came up front, she was all smiles with him - they did the kiss on each cheek thing. Anyway, they went into an office and he motioned for me to follow him. He explained to her that I was helping him with the new system. I smiled politely and offered to shake her hand. She looked at me for a moment and then turned back to him. She told him that she would like to speak to him in private. Then she looked back at me and gave me a hard stare.
Taking the hint I told the banker I’d be back in a little while. He sat in there with her for 25 minutes before he poked his head out of the office looking for me. When I went back in, she was dabbing her eyes - careful not to smear her makeup. We proceeded to put in a loan application for her. I walked him through the steps and then left the room before she could tell me to get lost. What I found out later was that she was having financial trouble. Her husband was some big tycoon on Wall Street and apparently a lot of their personal assets had been tied into several funds that had lost money. It dropped their net income from about $15 million to about $4 million. But, their lifestyle was a $15 million lifestyle and they couldn’t afford to drop to $4 million.
None of that was her primary concern though. Apparently she was very concerned with what her friends would think of her. Like the NY Times article talks about, being snubbed in a public restaurant is the ultimate disgrace for these socialites. She even asked about liquidating some of their remaining assets over a period of time to make up the difference because she couldn’t sell her car or her jewelry - her friends would notice.
It’s almost disgusting to those of us struggling to make mortgage payments and meet our regular bills to read stories of the really wealthy stressed out because their income dropped from a 9-figure to an 8-figure. But, to their credit when they’ve lived a certain lifestyle so long, it’s hard to imagine living any differently. We laugh at shows like the Simple Life because it’s a bunch of spoiled heiresses joining the real world, but a lot of these socialites who’ve inherited their wealth and never had to earn it have no clue what it’s like to be without money. So when the economy takes a turn for the worst, they feel the pinch just like everyone else.
For me, the difference is in how they accumulated their wealth. Heirs and heiresses who’ve never had to work a day in their life don’t really appreciate the value of hard work or a dollar, for that matter. For them, money has always been there for the taking. In our last discussion of millionaires, we focused on stories of people who worked their way up to millionaire status; it wasn’t just handed to them. To that end, those people know how to be frugal with their money so even in an economic downturn their lifestyles don’t change.
Do you feel sorry for the rich people who find themselves in these situations? Or do you think they need the reality check?
They need a reality check. There was no call for that woman to be rude to you and to treat you like hired help - it was really odd the way she gave you a hard stare and almost wanted you to get lost…. that’s weird to me.
They’ve lost all perspective on reality, and don’t realize that life could be a lot worse. Just like how I acknowledge that I could be working at minimum wage, struggling to make ends meet, relying on credit cards, lost and alone.
I complain sometimes but I never lose sight of the fact that it could ALWAYS be worse. Alternatively, it could also always be better.
And besides, the woman is all into keeping up appearances with her car and jewellery, but the problem is that her “friends” are probably worried about the same things and being in the same boat …. but they can’t talk about it because they’re all not really friends up there, just desperately unhappy, uber rich individuals.
At this point, I’d rather be where I am and ridiculously happy with the simplest things in life, than to have everything and not know what it’s like to really be happy because I’ve never been sad.
I really fail to understand that attitude. I’ve known several people who went from being wealthy to either broke or close to broke. All of them adjusted their lifestyle downwards (although often with some angst and bitterness). The only ones who borrowed money (that I know of) did so for either a business or for investments.
If you’re in a hole stop digging is the only sensible approach - no matter how rich you are if you spend more than you earn or make some dud investments then sooner or later you will run out of money. Borrowing to keep the lifestyle going is financial suicide.
Oh, come on people. I can understand why they feel like that. Cut them some slack. Yes, the lady’s behaviour was uncalled for, but what would you do if you were in the same situation?
I know that 15million is not the same as 15000, but imagine if your net worth plummeted like that?
The people who make that much money should have better budgeting practices. It’s the same as a movie star going bankrupt. They live too far outside their means, always thinking the money will be there when eventually it’s gone. I have no sympathy for the wealthy just because their networth has dropped from $15 million to $4 million. Yes, that’s a large drop, but I guarantee they’re still eating. And if they weren’t so concerned with appearances, they wouldn’t have to worry about it in the first place. There’s no need to go into debt when you make $4 million a year. Cut back your spending and stop worrying about what your friends think - they probably aren’t even real friends anyway. Sorry Tarah, but I don’t think cutting them some slack is the right approach. I’m not even talking about her behavior towards me, but as someone who educates people in the ways of their finances and teaches them to budget, living the extravagant lifestyle that you can’t afford doesn’t fly by me. They need to learn to be more conservative with their money and this won’t be a problem in the future.
I think most people need a reality check (even the middle class).