Author Topic: Relatives or friends who are extremely wealthy  (Read 12705 times)

jeromedawg

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Relatives or friends who are extremely wealthy
« on: January 23, 2016, 02:27:46 AM »
Hey guys,

Sort of another piggyback off the "millionaire next door thread" but wanted to get feedback from those on both sides of the fence.

For those who have friends or relatives who are wealthier than all get out (especially those who have new-found wealth), does it affect you at all when you guys hang out? Is it sort of awkward? My cousin, an anesthesiologist at a popular LA-area hospital, seems to have gone through a bit of lifestyle inflation. It's relatively minor compared to others who I've heard of getting into new-found wealth. He's probably 2-3 years into a *full-time* anesthesiologist's salary (in the LA area) whereas he was on a resident's salary prior to this. And I'm assuming, very easily, that it's a $300k+ salary. He is moving back to Texas soon and will really be able to maximize on LCOL + crazy salary (perhaps not as crazy but still up there) and a much more flexible schedule. Anyway, I was a bit shocked when he arrived and started backing into our "small garage" with his Porsche Cayenne Turbo. I didn't ask if he bought new or used but at that point I don't think it really matters lol. He apparently upgraded 6 months ago from his Lexus RX-hybrid (I think that's the model he had). And before that was his trusty old 4runner that had 200k miles on it and that he had throughout college and medical school. He does work around Beverly Hills so I guess driving a Porsche fits.... I'm sure it's just one of the 'guilty pleasures' of new-found wealth. But I know another one before this was him buying an Apple Watch (and the highest-end one). And prior to all this, he was the kind of guy who ravaged deal forums and always tried to figure out ways and exploits to get the cheapest price possible on a given item. And going a step further, getting items for free an or flipping items for profit. I don't think he really does much of that stuff anymore, probably figuring that it's not worth his time considering how much money he's making. That, and he seemed pretty busy all the time working his gig here. Maybe he'll have more free time for those things once he heads back to TX on a lighter schedule.

Anyway, it just got me wondering though about the mindset of people who have run into new-found wealth... I wouldn't call his lifestyle super-inflated in comparison to others. But to me it just felt kind of awkward getting together tonight - perhaps there was just less in common to talk about? We don't really get together all that much to begin with but every time we do, it just seems like there's less and less to talk about (e.g. it wouldn't even cross my mind to talk to him about how I swapped the fender and door on my 93 Camry and just got the dead battery exchanged free of charge, as he would probably think that was all a big waste of time...). For him, I think he has really gotten more into maximizing opportunity cost with his time: one big one is Uber, which makes sense. He said he uses Uber for *everything* - he had an Uber driver pick something up for him from somewhere while he was at work and paid the driver only $15 for something that would have taken him a couple hours to do + the stress of driving around in LA. That's actually a pretty good deal, but this is more along the lines of how he thinks these days as far as what constitutes a "good deal" and putting his money to the most efficient use, it seems. He has even said in the past, and I roughly quote, that he has "3-4 times the working efficiency of an average person" - I don't disagree, given that he has a bachelors in electrical engineering and his medical degree... but that just seemed a bit pompous, even if it was half-joking and in passing.

Have you guys found that as your friends or relatives become insanely wealthy over a short period of time (or vice versa where you become insanely wealthy in a short time frame), that your perspectives change about each other or that you start seeking out different circles of friends to associate with? They say money changes people... so I'm just curious.

On a different note - when people are *that* wealthy, I'm assuming it's easy for 'Mustachianism' to not even even occur to them. And it seems quite possible to "fall away" from even the basic tenets of 'Mustachianism' (or perhaps it might have been known as something else like frugalism/simple-living/etc?). Have any of you known someone who was frugal/thrifty/minimalist/Mustachian/etc who came into big wealth and then everything changed?

That leads to the next point and on the flip-side - I'm wondering what the perspective might be from someone who is really well off among their relatives and friends and how their interactions were perhaps when first starting out with much wealth and how those interactions may have changed over the years (or not).
« Last Edit: January 23, 2016, 02:45:38 AM by jplee3 »

2Birds1Stone

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Re: Relatives or friends who are extremely wealthy
« Reply #1 on: January 23, 2016, 03:42:41 AM »
Very interesting topic.

First off, an Anesthesiologist who is 2-3 years into *full time* specialty work has likely spent the last 10-12 years digging themselves into debt. Even with a $300k/yr salary I would bet for most their net worth is negative.

Next, despite what the general population thinks, MD's are terrible accumulators of wealth. This is talked about in detail in the book "Millionaire Next Door". Because of the social pressure to "live the doctor lifestyle" many MD's despite their super high incomes are only a paycheck or two ahead of their bills.

Also for perspective, while $300k/yr IS a high salary. After you factor in the debt from school, the opportunity cost of spending 10 years in professional school it actually takes an MD quite a while to catch up in wealth to someone who say got their BA/BS and maybe a masters in STEM and started working at the age of 23-24.

Don't be envious! You could be making less in real terms, but relative to spending you very well may be the wealthier one.

I know this doesn't really answer your question, but it's definitely something to think about.

Take these #'s with a grain of salt because it is CBS after all....but the point is valid.

http://www.cbsnews.com/news/1-million-mistake-becoming-a-doctor/

happy

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Re: Relatives or friends who are extremely wealthy
« Reply #2 on: January 23, 2016, 04:17:43 AM »
As a physician,  I agree, many doctors are not good accumulators of wealth, although some who are primarily business people are.
I don't socialise much with many of my peers, because I can't relate.  The ones I do socialise with, is because we get on over various ideas and so on, and the fact that they live higher than I is not relevant.  Others just want to talk about their latest purchase/holiday/private school etc etc and socialise with others by a mutual display of wealth. These I avoid, since I rarely find the conversations interesting.

DeltaBond

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Re: Relatives or friends who are extremely wealthy
« Reply #3 on: January 23, 2016, 07:11:26 AM »
Oh, very interesting to hear from a physician about this.  I saw a small study once on whether or not doctors make more than teachers over a lifetime, and teachers came out a wee bit ahead, because you have to calculate in the school debt, and I think they included malpractice insurance.

OP, My husband often reminds me that most people overextend themselves, by a LOT.  And its just human to want to enjoy a newfound paycheck... I'd just watch how your friend handles his spending over the next 10 years  .... IF he doesn't get married to someone who is equally materialistic, that might just perpetuate the spending habits.

Fi(re) on the Farm

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Re: Relatives or friends who are extremely wealthy
« Reply #4 on: January 23, 2016, 07:38:28 AM »
My DIL's mom is extremely wealthy, totally self made. It's something I have a hard time comprehending. While she owns 2 amazing houses and my grandchildren will not have to worry about how to pay for college, she's definitely the millionaire next door type so I never feel uncomfortable.

Think

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Re: Relatives or friends who are extremely wealthy
« Reply #5 on: January 23, 2016, 08:19:53 AM »
As a physician,  I agree, many doctors are not good accumulators of wealth, although some who are primarily business people are.
I don't socialise much with many of my peers, because I can't relate.  The ones I do socialise with, is because we get on over various ideas and so on, and the fact that they live higher than I is not relevant.  Others just want to talk about their latest purchase/holiday/private school etc etc and socialise with others by a mutual display of wealth. These I avoid, since I rarely find the conversations interesting.

One of the main reasons doctors spend so much is that they have pretty much a guaranteed source of income for life.  Have you ever heard of a doctor going out of business?  As long as they can make payments there really isn't any risk they won't be able to continue doing so.  As far as losing their medical license, they would be screwed regardless of how much they are spending. 

On a side note I would worry less about how much relatives are spending.  It is his business if he wants a Porsche

Also isn't his salary way above 300k?

ender

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Re: Relatives or friends who are extremely wealthy
« Reply #6 on: January 23, 2016, 08:31:36 AM »
I have a relative that is also a doctor and recently started working fulltime.

He might make 3x or more what I make, but their lifestyle is going to be awful. Sure they could retire early but considering that their net worth at the age that he started working will likely be $500k or more less than mine will be at that age... and that the hours/lifestyle/stress of being a doctor?

But the lifestyle would never be worth it to me.


Think

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Re: Relatives or friends who are extremely wealthy
« Reply #7 on: January 23, 2016, 08:50:05 AM »
I have a relative that is also a doctor and recently started working fulltime.

He might make 3x or more what I make, but their lifestyle is going to be awful. Sure they could retire early but considering that their net worth at the age that he started working will likely be $500k or more less than mine will be at that age... and that the hours/lifestyle/stress of being a doctor?

But the lifestyle would never be worth it to me.

Most doctors enjoy their jobs.  They probably wouldn't want to retire early.  While you may find their lifestyle awful, they may think it's awful you have such low earning potential. 


jeromedawg

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Re: Relatives or friends who are extremely wealthy
« Reply #8 on: January 23, 2016, 09:13:44 AM »
Very interesting topic.

First off, an Anesthesiologist who is 2-3 years into *full time* specialty work has likely spent the last 10-12 years digging themselves into debt. Even with a $300k/yr salary I would bet for most their net worth is negative.

Next, despite what the general population thinks, MD's are terrible accumulators of wealth. This is talked about in detail in the book "Millionaire Next Door". Because of the social pressure to "live the doctor lifestyle" many MD's despite their super high incomes are only a paycheck or two ahead of their bills.

Also for perspective, while $300k/yr IS a high salary. After you factor in the debt from school, the opportunity cost of spending 10 years in professional school it actually takes an MD quite a while to catch up in wealth to someone who say got their BA/BS and maybe a masters in STEM and started working at the age of 23-24.

Don't be envious! You could be making less in real terms, but relative to spending you very well may be the wealthier one.

I know this doesn't really answer your question, but it's definitely something to think about.

Take these #'s with a grain of salt because it is CBS after all....but the point is valid.

http://www.cbsnews.com/news/1-million-mistake-becoming-a-doctor/


I don't know. He has always been keen on finances (his mom and sister are both accountants/auditors at high profile companies so it's in the family) and I'm pretty sure he was in med school not that long. Considering he was working as an electrical engineer full time straight outta college and living at home, I think his savings rate was really high. And just knowing how he has been with finding deals and getting stuff for free, I would be shocked if he were carrying a ton of debt. He probably financed his way thru med school and residency by using all sorts of money and life hacks. I've always known him to be the type of person who would pick up side hustles to get ahead (and surely to tackle any outstanding sign of debt, but if not it was side hustling for the fun money). When discussing retirement he was of the mindset that he would work as long as he possibly could. Same thing with my other cousins who are in the medical field... They're addicted or enjoy it or something, I guess. Seems once you can get to that level you can pretty much do what you want and go on vacation when you want anyway. I guess he's doing what he loves and is being rewarded for it right? Does that mean that to him, mustachianism is a waste of time?

As far as him buying a Porsche, yes of course it's his business. I was just saying that I was surprised because I thought an rx hybrid was a nice car! When you're making that much and with likely little to no debt, why not splurge on a few toys? The thing I wonder about is different wealthy persons' views on publicly flaunting things vs keeping them more private etc.... I know a few other doctors who likely make near the same amount but the difference too is that they have families. I think the nicest car they might have out of all of them might be a Honda Accord lol... But perhaps things were different when they were single and were into their first few years as a dr and commanding those salaries? I guess as with anything, more money allows you to buy things that would save you time and effort. Why focus on being frugal and what not when you have a salary that 'spares' you not having to worry about those things in general? Then your time and energy can be focused on maximizing your earning potential as a doctor... It's the highest level of return on investment especially if you enjoy it right? I guess that's the ultimate dream - working a job you actually love and getting paid a lot for it.
« Last Edit: January 23, 2016, 09:35:09 AM by jplee3 »

CindyBS

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Re: Relatives or friends who are extremely wealthy
« Reply #9 on: January 23, 2016, 09:14:35 AM »
We have some of this with a neighbor, but in the opposite direction.

She and her husband are renting to own the house next door that was purchased for ridiculously cheap a few years ago b/c it was in terrible condition.  Basically, she and her family are probably the poorest on the street, and compared to her - we are wealthy.

She is a nice person and a great neighbor, but sometimes I have a very hard time relating to her. 

We keep our money situation a complete secret and have outwardly frugal ways like being a 1 car family and not buying a ton of stuff, but things like our frequent weekend trips camping or sending our kids to summer camp for  a week can't be hidden.   I go to events at the school (our kids go to the same public school), but she can't go b/c she watches a ton of other people's kids to make ends meet.  Ditto with us going to the pool, places in the summer, etc.   She is trapped at home to earn every cent she can, while we have freedom to go places and do things. 

I try not to say anything if the conversation veers into how to afford christmas or why a certain repair can't be done or how they are going to be tight this month b/c something didn't refund into their bank account correctly. 

I was happy for them when they took their first real vacation in 12 years last year, but again, hard to relate to since we take a lot of mini vacations all year (mostly camping).

As much as we may think money shouldn't matter, a lot of the times it really does b/c it affects so much about what kind of life you lead and therefore what you have in common with other people. 

I've been thinking about this as we approach FI.  I will be in my late 40's when it happens and while our spending will be similar or less - I wonder how our friends will react and if relationships will be strained.  There are a few people I know will have a problem (and probably aren't REAL friends anyway). 

jeromedawg

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Re: Relatives or friends who are extremely wealthy
« Reply #10 on: January 23, 2016, 09:38:20 AM »
So now I wonder... Do most doctors even aspire to FIRE? Or is their goal just FI?

totoro

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Re: Relatives or friends who are extremely wealthy
« Reply #11 on: January 23, 2016, 10:42:39 AM »
I think it is okay to hang out mostly with people who share your values and have a similar lifestyle.  We have super-rich acquaintances (way wealthier than your cousin) who have a lot of material possessions.  Our close friends aren't in that group and it would not make us happier to hang out with those who spend way more than we do.

Given that this person is part of your family maybe a better way to approach it is focussing on happiness as a measure of success?  Really happy personal relationships and family life are way more important/admirable to me than a fancy car.

For those relying on the study comparing the salaries of teachers to doctors: http://www.bestmedicaldegrees.com/salary-of-doctors/
I think the logic is a little flawed.  Tracking the hours put into a degree and assigning a monetary value to it is a good theoretical approach but in reality you have to work hard to get ahead in anything in my experience and earning capacity and ability to be FI early can be enhanced.

I did work the equivalent of two full-time jobs for a number of years to get where I am at.  I had no problem doing this because now I earn a lot more and I liked being in school.  I would have spent the time doing other things had I not had school, but I valued education as highly as many other things.  I now earn more than a teacher even accounting for the pension which is a significant issue.  I'm pretty sure most doctors don't regret the time investment made in their career choice.  What is more of a regret for me is the time I spent in school not being sure of what I wanted to do.

But I think the point is that happiness is the real measure of success imo.  Do everything you can to attain this and I think you'll be less concerned with the wealth of others.


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Re: Relatives or friends who are extremely wealthy
« Reply #12 on: January 23, 2016, 11:58:18 AM »
It really doesn't bother me when other people aren't frugal. I'm still happy to spend time with them if they're pleasant people. The only thing that's really annoying is when people who spend lavishly complain about financial things or only talk about their material things (in other words, whiny people).


I can't imagine getting upset or liking someone less because they choose to do the conventional 10% savings, spend a lot, and work a long time. It's their life, and I don't know what will make them happy.

dinkhelpneeded

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Re: Relatives or friends who are extremely wealthy
« Reply #13 on: January 23, 2016, 02:08:04 PM »
This definitely exists - but the awkwardness is because of perception, both yours and his. You are acutely aware that this guy is now earning 300K, he is aware that you are not a high earner like him. If he was your best buddy from high school you wouldn't hesitate to call his bullshit or talk about his "new found lifestyle". 

Since he is more of an acquaintance/not so close friend here is my suggestion

  • If you run out of things to talk, its ok, time to move on from the friendship.
  • If its just the honeymoon new and shiny phase of his job, and he remembers his old frugal ways, and starts to talk about accumulating assets and not things, then maybe you could have a relationship.

dinkhelpneeded

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Re: Relatives or friends who are extremely wealthy
« Reply #14 on: January 23, 2016, 02:18:36 PM »
Also my sibling married a person who has a trust fund of about 250M, my own sibling!

I couldn't fathom it and had some mixed feelings (jealousy plus happy for them) but the truth is it put us on such different paths in life that we couldn't relate to each other much.

We still have a loving relationship and fond memories, but we find it hard to talk about everyday things.

Cassie

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Re: Relatives or friends who are extremely wealthy
« Reply #15 on: January 23, 2016, 03:00:37 PM »
When I was young in my 20's I had one friendship like that and it didn't last because we could not really relate to one another. She was a nice person and it was really no ones fault.

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Re: Relatives or friends who are extremely wealthy
« Reply #16 on: January 23, 2016, 03:56:17 PM »
Regarding the OP's friend: as others have noted, this is typical behavior after finishing medical training and is discussed in detail elsewhere. I think the assumptions made about doctors are somewhat overblown (we aren't all idiots with money, just a few, which makes for salacious gossip in some circles). The stability of their jobs does make the pressure to save less than in more variable-income fields.

My wife has finished her training and our salary is now double what it was during our training. I'm still training, and when finished our salary will more than double again. That being said, we'll still be earning less than my parents, and a couple of my other relatives. There are some in the tech industry that are worth >$1 billion and it's gone to the children's heads unfortunately. Frankly, their lack of ambition annoys the rest of the family. We aren't jealous of that part of the family's wealth, because frankly their lives aren't better than ours in any meaningful way. It's just that we don't have much to talk about because they don't work and can't relate to our lives anymore.  I relate a lot better to my less-wealthy friends because our interests were similar and I made a point to not flaunt my family's money. The point is that wealthy people are just normal people that have a lot of money, and they'll spend it as they see fit. If they are worth being friends with, that difference shouldn't get in the way.

sol

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Re: Relatives or friends who are extremely wealthy
« Reply #17 on: January 23, 2016, 04:16:55 PM »
We have the opposite problem, in that we make substantially more money than most of our friends.

We're not billionaires or anything, but we have two working professionals in the household.  While we still save about 60% of our income, we also spend a bunch on things that most of our friends can't, like 40 hours per week of childcare.    We also don't sweat when unexpected expenses crop up.  A while back I had to replace my car's radiator for $800, and all of my friends just went pale at the thought of that sort of expense suddenly falling into their laps.  Not even a hiccup for us.

Most of the time it's fine, because live relatively frugal lives and our spending levels are roughly the same as our friends who make half as much or less (but save almost nothing).  But occasionally it's awkward, like when lift tickets are on sale and I want to go skiing but I know my best skiing friends can't really afford to drop $100 and take a day off of work because they need overtime to make rent.  Do I ask?  Do I offer to pay?  Is that condescending if I do?

When my life gets suddenly complicated because two of my tenants suddenly decided to break their lease over Christmas break, and I have to schedule repair work, list the places online, show the homes, screen tenants, and then get new leases signed, I can't really complain about it to any of my friends who are renters themselves.  They don't want to hear about rich people problems.

When I was really excited about putting $30k worth of solar panels on my roof, I couldn't really talk about it with my friends for whom that's a year's salary.  They're getting food stamps and I'm throwing money away on solar panels?  They don't see or care about the payback period or the environmental benefit, they just see me blowing a year's wages on a toy I can't even play with.

So I imagine that people who are another rung or two up the wealth ladder from me probably face the same sorts of problems.  Instead of fretting over lift tickets, it's a weekend of skiing in Switzerland.  Instead of tenant issues it's Bernie Madoff issues.  Instead of solar panels it's a yacht.  They must feel the same awkwardness that I do.

Wealth separates people, whether we like it or not.   My poorest friends want to talk about Lotto and football and the Kardashians, because those are the most interesting things in their lives, and I don't care about any of it.  I'm sure I've made some of them feel awkward by refusing to discuss such topics, and I'm sure they thought I was being a bratty Uncle Pennybags who thought himself too good for them. 

Tjat

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Re: Relatives or friends who are extremely wealthy
« Reply #18 on: January 23, 2016, 04:28:36 PM »
They must feel the same awkwardness that I do.

Wealth separates people, whether we like it or not.   My poorest friends want to talk about Lotto and football and the Kardashians, because those are the most interesting things in their lives, and I don't care about any of it.  I'm sure I've made some of them feel awkward by refusing to discuss such topics, and I'm sure they thought I was being a bratty Uncle Pennybags who thought himself too good for them. 

I can relate to this. All my friends seem to be really struggling financially - whether unable to pay off student loans despite financing a brand new minivan, going on overseas vacations every other month (likely on credit cards), working their MLM, or not being able to afford childcare (or children)... it is a bit uncomfortable to not be able to participate in many of their their conversations.

jeromedawg

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Re: Relatives or friends who are extremely wealthy
« Reply #19 on: January 23, 2016, 04:48:05 PM »
Interesting replies...thanks everyone! Yea, I've never had "front-row and center seats" to seeing someone about my age go from "middle class" to "upper class" and seeing it expressed in a change in lifestyle and spending. When I think about it, I'm sure I wouldn't be much different and would spend on whatever makes me happy :)

On a side note, he's dating someone whose family is extremely wealthy (owns a multi-billion dollar business) and plans to marry her. What a crazy-awesome opportunity to be set for life and live among the high-rollers! Just hearing about the family and how they own a resort in Hawaii as well as some very nice homes, we're like "geezzzzzzzzz" ... Kinda reminds me of my mother in-law's friend in Korea whose husband is a VP for Hyundai - they live on a lot with two large homes; one home is theirs and the other "guest" home is for their daughter and son-in-law who is a surgeon. They had a private driver who drove us around when she had us come over to visit at her home (this was definitely more of a rub it in your face kind of opportunity/meetup for her rich friend)
« Last Edit: January 23, 2016, 04:54:46 PM by jplee3 »

use2betrix

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Re: Relatives or friends who are extremely wealthy
« Reply #20 on: January 23, 2016, 06:36:36 PM »
Growing up I had a friend who's dad had a 15 million dollar house. My friend, you would never guess he had money, other than the cool house and his cool car. He acted just like the rest of us. He was more the kind of kid to wear worn out clothes and go to punk rock concerts. He was always a very nice and down to earth kid. You couldn't say the same for his older brother.

I think "lifestyle creep" depends on so many factors it's hard to say. A MD who's been scraping to get by while busting their ass, well I understand why they might want a nice car or to spoil themselves a bit. Especially going from maybe 50k to 300k.

My lifestyle changed a decent amount going from 50k to 150k. The last 8-10 months it's gone from about 150k to about 250k. My lifestyle really hasn't changed much and I don't even know if this income will be sustainable.

That being said, I work in the oil field/construction industry. I wear steel toes and blue jeans to work. No one really has high expectations of spending for people in our industry. Of course, I have coworkers who are huge spenders and bad with their money, but the pressure isn't there much. In fact, when walking dead is on my wife and I go watch it at a coworkers house because we don't even have cable lol.

I fully agree that those with advanced degrees like lawyers and doctors feel the pressure a lot. However, smaller business owners and many others that make high incomes don't feel the same pressures and it's much easier to live within a more reasonable means. My spending goals each month right now are the exact same as what they were when I made 100k less/yr.

starguru

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Re: Relatives or friends who are extremely wealthy
« Reply #21 on: January 23, 2016, 07:02:12 PM »
I met a friend in grad school who is a member of a royal family.  One time he visited me and another friend on the final leg of a tour he was on. He had a fanny pack with 40k in it, and offered to give it to us.  We of course refused.  His family owns a condo in DC; he told me one neighbor is a supreme court justice and another a Redskins player.  I have no reason to doubt.  I only see him every few years, but its always fun when we get together.

JLee

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Re: Relatives or friends who are extremely wealthy
« Reply #22 on: January 23, 2016, 07:04:21 PM »
I've dated a couple of people with wealthy parents/families ($1mil+ houses) but that's about it.

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Re: Relatives or friends who are extremely wealthy
« Reply #23 on: January 23, 2016, 07:48:40 PM »
As a physician,  I agree, many doctors are not good accumulators of wealth, although some who are primarily business people are.
I don't socialise much with many of my peers, because I can't relate.  The ones I do socialise with, is because we get on over various ideas and so on, and the fact that they live higher than I is not relevant.  Others just want to talk about their latest purchase/holiday/private school etc etc and socialise with others by a mutual display of wealth. These I avoid, since I rarely find the conversations interesting.

One of the main reasons doctors spend so much is that they have pretty much a guaranteed source of income for life.  Have you ever heard of a doctor going out of business?  As long as they can make payments there really isn't any risk they won't be able to continue doing so.  As far as losing their medical license, they would be screwed regardless of how much they are spending. 

On a side note I would worry less about how much relatives are spending.  It is his business if he wants a Porsche

Also isn't his salary way above 300k?

I don't think you've considered that the risk of losing a medical license can come at a later point in a career. If one saved the income and invested it, living a normal middle class lifestyle instead, they'd be able to retire. So your assertion that it doesn't matter what they spend is not accurate. And they don't have a guaranteed source of income. Not when a medical license, poor health, or a criminal record can end their career.

Also, your other post about most doctors liking their jobs is inaccurate. Most doctors polled, 65% would not become doctors again if they knew what they knew now. My brother, a former medical doctor, is one of those 65%...

James

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Re: Relatives or friends who are extremely wealthy
« Reply #24 on: January 23, 2016, 08:09:00 PM »
As an anesthesiologist he is probably making around double your $300k guess... anesthesia is pretty lucrative right now, and hopefully I will be FI if/before that changes. (I'm a CRNA not an anesthesiologist, but still doing very well compared to other advanced practice nurses or those with similar education level)


I find myself floating in the middle, some people around me make less than 1/4 of what I make that have nicer cars and bigger houses, and some make over double what I make and spend similar or even less than what spend. I know I make more than some doctors in my hospital, it's just hard to wrap your mind around all the complexities of wealth and how it is doled out and dealt with.


As a career, physician and other high education jobs aren't really a great fit if aiming for FIRE. Unless you have family to bank roll education, it's a long road with high debt just to get started. Also, you have spend a lot of time, effort, and dedication getting to where you are, are you really wanting to hang that all up just because you have enough to be FI? I enjoy providing anesthesia, I just want to be FI so I don't feel tied to the job and can cut back and practice where and when I wish. I won't stop working, I enjoy it too much, and it is great to be able to fund medical trips around the world and support things I wish to support. But many in medical careers get tied up in the rat race funding lavish lifestyles, which then imprison them in their jobs rather than the freedom of FI. So rather than convincing them they need FI to retire, they need to realize the freedom WITHIN their career that FI brings. RE is just the cherry on the top of they ever wish for it, but probably not the thing that will motivate them toward FI.

jeromedawg

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Re: Relatives or friends who are extremely wealthy
« Reply #25 on: January 23, 2016, 08:16:26 PM »
As a physician,  I agree, many doctors are not good accumulators of wealth, although some who are primarily business people are.
I don't socialise much with many of my peers, because I can't relate.  The ones I do socialise with, is because we get on over various ideas and so on, and the fact that they live higher than I is not relevant.  Others just want to talk about their latest purchase/holiday/private school etc etc and socialise with others by a mutual display of wealth. These I avoid, since I rarely find the conversations interesting.

One of the main reasons doctors spend so much is that they have pretty much a guaranteed source of income for life.  Have you ever heard of a doctor going out of business?  As long as they can make payments there really isn't any risk they won't be able to continue doing so.  As far as losing their medical license, they would be screwed regardless of how much they are spending. 

On a side note I would worry less about how much relatives are spending.  It is his business if he wants a Porsche

Also isn't his salary way above 300k?

Also, your other post about most doctors liking their jobs is inaccurate. Most doctors polled, 65% would not become doctors again if they knew what they knew now. My brother, a former medical doctor, is one of those 65%...

It is true - one of my previous roommates confessed to me during his residency that if he had to do it all over again, he'd go into IT instead of going to med school... to him, it wasn't worth it. I guess there are those few and far between that actually *love* what they do. But even if a lot of doctors express dissatisfaction, does that necessarily mean they want to retire from it? Or do they get into the mindset that they toiled through med school and are now making a lot of money, so retiring (earlier) would be a waste and since they're making a lot they might as well keep working...?

jeromedawg

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Re: Relatives or friends who are extremely wealthy
« Reply #26 on: January 23, 2016, 08:41:07 PM »
As an anesthesiologist he is probably making around double your $300k guess... anesthesia is pretty lucrative right now, and hopefully I will be FI if/before that changes. (I'm a CRNA not an anesthesiologist, but still doing very well compared to other advanced practice nurses or those with similar education level)


I find myself floating in the middle, some people around me make less than 1/4 of what I make that have nicer cars and bigger houses, and some make over double what I make and spend similar or even less than what spend. I know I make more than some doctors in my hospital, it's just hard to wrap your mind around all the complexities of wealth and how it is doled out and dealt with.


As a career, physician and other high education jobs aren't really a great fit if aiming for FIRE. Unless you have family to bank roll education, it's a long road with high debt just to get started. Also, you have spend a lot of time, effort, and dedication getting to where you are, are you really wanting to hang that all up just because you have enough to be FI? I enjoy providing anesthesia, I just want to be FI so I don't feel tied to the job and can cut back and practice where and when I wish. I won't stop working, I enjoy it too much, and it is great to be able to fund medical trips around the world and support things I wish to support. But many in medical careers get tied up in the rat race funding lavish lifestyles, which then imprison them in their jobs rather than the freedom of FI. So rather than convincing them they need FI to retire, they need to realize the freedom WITHIN their career that FI brings. RE is just the cherry on the top of they ever wish for it, but probably not the thing that will motivate them toward FI.

Wow, $600k? That's just insane... he has always been the type to get into things at the right time. I'm sure it's because he's just smart and generally good at taking calculated risk (his statement about having 3-4 times the working efficiency of the average person is probably correct.... I'm sure most doctors would acknowledge this but perhaps don't outright say it). I really think he was good about investing his money early on and figuring out ways to finance most if not all of his medical school expenses. I don't think he would be splurging like this *unless* that were the case. And I'm sure a *large* part of why he even got into anesthesiology was because he knew it would be this lucrative.
Considering that he's moving out to TX (LCOL) I think he'll be just fine with keeping his overall expenses low; to the point where he can afford a lot of gadgets to show off. He'll definitely be able to afford a nice home + eventually several nice cars. This is sorta how one of my uncles ended up - he's also an anesthesiologist out there and has always lived in the nicer parts of San Antonio and had nice cars. Though my mom would tell you that at the core, he's still a very frugal guy. His wife is a pharmacist and both his kids are now doctors. Previously, one of his kids was in investment banking and got out, and the other was in EE like our other cousin. The crazy thing is that both kids are also married to doctors as well. We have a quite a few doctors (and a couple dentists) in my extended family, so whenever we get together now, the other half of us feel pretty stupid sitting there with blank stares while all the white coats talk about medicine hahaha. I think in general, this side of the family doesn't bask *too much* in flaunting their wealth - they show us bits and pieces that make us envious, sure but it isn't too over-the-top. That said, I still think the differences have caused small rifts between some of the families. When we go visit them though, they usually show us some new gadget or toy they bought that the rest of us common-folk normally wouldn't buy (e.g. new car, expensive sous vide, new house, entertainment/tv system, etc)
« Last Edit: January 23, 2016, 08:51:20 PM by jplee3 »

deborah

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Re: Relatives or friends who are extremely wealthy
« Reply #27 on: January 23, 2016, 08:49:58 PM »
Having relatives who are self made multimillionaires does affect you. I learnt that I never wanted to be one. My siblings learnt completely different lessons. Maybe it is partly because I remember the most wealthy gradually becoming wealthy, and my siblings may not. I don't think it has changed how we relate to them, or how they relate to us. For example, most owners of businesses give relatives stuff from their business at Christmas, and these people did too. However, it was good for me, because some (more interested in wealth) boyfriends were completely overawed by these relatives, and reacted inappropriately, so they soon became exboyfriends.

jeromedawg

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Re: Relatives or friends who are extremely wealthy
« Reply #28 on: January 23, 2016, 09:01:55 PM »
Having relatives who are self made multimillionaires does affect you. I learnt that I never wanted to be one. My siblings learnt completely different lessons. Maybe it is partly because I remember the most wealthy gradually becoming wealthy, and my siblings may not. I don't think it has changed how we relate to them, or how they relate to us. For example, most owners of businesses give relatives stuff from their business at Christmas, and these people did too. However, it was good for me, because some (more interested in wealth) boyfriends were completely overawed by these relatives, and reacted inappropriately, so they soon became exboyfriends.

Interesting, what was it in particular that made you "learn that you never wanted to be one"? Was a lot of it just how those certain relatives changed in their behavior and the way they acted with the new-found wealth?

deborah

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Re: Relatives or friends who are extremely wealthy
« Reply #29 on: January 23, 2016, 09:18:54 PM »
Having relatives who are self made multimillionaires does affect you. I learnt that I never wanted to be one. My siblings learnt completely different lessons. Maybe it is partly because I remember the most wealthy gradually becoming wealthy, and my siblings may not. I don't think it has changed how we relate to them, or how they relate to us. For example, most owners of businesses give relatives stuff from their business at Christmas, and these people did too. However, it was good for me, because some (more interested in wealth) boyfriends were completely overawed by these relatives, and reacted inappropriately, so they soon became exboyfriends.

Interesting, what was it in particular that made you "learn that you never wanted to be one"? Was a lot of it just how those certain relatives changed in their behavior and the way they acted with the new-found wealth?
People who are self made multimillionaires tend to be very conscious of money - they need to have been to get where they are.

tj

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Re: Relatives or friends who are extremely wealthy
« Reply #30 on: January 23, 2016, 09:26:37 PM »
We've had family friends who are very wealthy, it's been a non-issue other than my dad making comments that certain folks seem to be spending a lot on bottles of wine at dinner, and that comes from a man who is not all that frugal.

Growing up, in some of our earlier houses, I believe we tended to be wealthier than most of our neighbors and I get the sense that was awkward and frustrating for my parents. If they took us on a family vacation somewhere, there would be remarks like "Well, that must be nice." I'm glad they didn't have us completely sheltered in gated communities, but we were still pretty solid upper middle class I would guess.

It's a shame that money divides people the way that it does, but the benefit is that a lot of the social opportunities these days with the internet such as MeetUp.com or social sports, or forum meetups, you could have no idea what a person earns, or what neighborhood they live in, and you probably don't care...

I hear a lot of first world problem complaining from folks who earn less than me. I'm not really sure what it would be like to hang out with the mega wealthy. I know a guy who sold a website for mid 6 figures, but he still seems like a pretty normal dude.

PhysicianOnFIRE

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Re: Relatives or friends who are extremely wealthy
« Reply #31 on: January 23, 2016, 10:05:31 PM »
Another anesthesiologist chiming in.  Just before I finished residency in 2006, I bought a lightly used 2006 Chevy HHR.  Nearly 10 years later, I am happy to say I am debt-free, FI, living in a nice middle class neighborhood, and still driving a 2006 Chevy HHR.

I didn't know what FI was until I discovered MMM about a year ago, but apparently I'd been working toward it for quite awhile.  I don't mind spending money, but I've always abhorred wasting money.  In general, I like my job, but I think the paycheck has been a big reason why.  I'll take a day off over a workday any day.  The OP's guesstimate of $300k is closer to the average / truth than the $600k I heard mentioned; although probably 5% of anesthesiologists probably make that or more due to crazy hours, good payor mix, etc...

I think some people are changed by money, others not at all.  I've seen this with friends from medical school and residency.  For some, their personalities haven't changed; others I can't even relate to any more.

I recently put together a thought exercise / blog post comparing 4 physicians each making $300k household income.  I varied their annual spending from $80k to $200k.  The "frugal" physician was FI in about 10 years, the biggest spender probably never.  Nobody talks to you about this stuff during your education / training.  Talking money is taboo, you know.

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Re: Relatives or friends who are extremely wealthy
« Reply #32 on: January 23, 2016, 10:34:35 PM »
There was one person I studied with in college that left senior year to start a tech company. He sold it before the year was out and then moved to Toronto presumably to start another one. Haven't talked to him much since his big win, but I can't be mad at him, dude had guts.

My mother had a friend and her husband made the big time in the music business. She immediately went and joined a Country club, and got new friends.

While I see others who are far wealthier than I, I also have a number of friends who make far less. I am cool with hanging out with anyone as long as they don't pressure me to buy expensive things. And for friends that make less, I similarly don't pressure them to spend at my level either.

jeromedawg

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Re: Relatives or friends who are extremely wealthy
« Reply #33 on: January 24, 2016, 11:05:30 AM »
I don't mind spending money, but I've always abhorred wasting money. 

This. I think this says everything, regardless of income level rich or poor. So many people waste money on crap (I'm sure myself included)

tobitonic

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Re: Relatives or friends who are extremely wealthy
« Reply #34 on: January 24, 2016, 11:18:07 AM »
An interesting thread! We've got some relatives who make a lot but we aren't very close with them (not due to their wealth, but due to geography and family conflicts). All you can do is live in accordance with your values.

Nickels Dimes Quarters

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Re: Relatives or friends who are extremely wealthy
« Reply #35 on: January 24, 2016, 11:26:44 AM »
There's a pretty wide range of incomes in my family but it hasn't been an issue. We are geographically spread out so we don't all get together very often. When we do, because we do have a good number of retired folks on fixed incomes, the financial decisions are made to take them into consideration at every turn, including hotel selection and restaurants, etc.

My close friends with great wealth are so down to earth that you'd never know it -- truly the Millionaires next door.

NDQ

jeromedawg

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Re: Relatives or friends who are extremely wealthy
« Reply #36 on: January 25, 2016, 10:47:27 AM »
There's a pretty wide range of incomes in my family but it hasn't been an issue. We are geographically spread out so we don't all get together very often. When we do, because we do have a good number of retired folks on fixed incomes, the financial decisions are made to take them into consideration at every turn, including hotel selection and restaurants, etc.

My close friends with great wealth are so down to earth that you'd never know it -- truly the Millionaires next door.

NDQ

For the most part, this is how it  always was growing up. Besides the one uncle/aunt who had/has extreme wealth compared to the rest of the siblings, who aren't "poor" by any means, everyone has always tried to be pretty accommodating towards one another. I think most, if not all my cousins are pretty financially savvy, considering all our parents grew up with parents who worked through much hardship to raise them into success (all the aunts/uncles on my mom's side are 2nd generation Chinese-American, born and raised here). That said, I believe all of my uncles and aunts are "well-off" - it's just that there are a handful that are extremely well-off - I don't know if that has caused a *little* jealously and or flaunting on either side but I can definitely get glimpses of it. Nobody really says anything about the uncles/aunts/cousins extravagant purchases but I think there's an unspoken tone of "seriously?" at times...

Although, when one of the cousins (from the wealthier side) got married in Hawaii, I think it caused a bit of a temporary rift between her family and another uncles who had kids all in their teens or younger and who was left behind back in the states because he had to keep an eye on our grandfather (who wasn't doing so well and couldn't travel). My mom was also somewhat upset that they couldn't compromise to have the wedding back closer to where my grandfather was so he could attend. Of course, nobody was complaining when we were in Hawaii hahaha

honeybbq

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Re: Relatives or friends who are extremely wealthy
« Reply #37 on: January 25, 2016, 12:01:13 PM »
I guess I'm relatively wealthy if we are talking about HH incomes above 300k. But that wouldn't make me "extremely weathly" in my book (more on that later). My spouse and I both work in the medical field. I aspire to retire early. I had no debt after graduating from medical/graduate school.

I have always been fairly frugal; but as pointed out previously, I don't like wasting money but I don't mind spending money.

For probably 75% of expenditures, I'm very 'millionaire next door'. I have the Honda. I have a cheap watch, etc. But when there's something I truly want or need, I buy it. Luckily, my needs are pretty low.

Rarely is my income an issue. I don't flaunt it. My house is pretty damn expensive but it is not a McMansion. I also live in a HCOLA where there are tons of millionaires. So I am not alone there.  I send my daughter to an excellent day care/pre k and I have a dog walker (lol) but I clean my own toilets and mow my own lawn.

I would consider myself VASTLY different from someone who inherits or marries into a trust-fund type situation like described above. 250MM is a very, very different lifestyle than having a couple mil NW.  But we have had this debate on here before, what constitutes "wealthy". I am wealthy, but I do not have a lavish lifestyle. One doesn't necessarily inflate the their lives to hog-wild crazy spending. But I certainly have had some inflation in my lifestyle. But I am ok with that. I have the balance I am happy with. I could retire today if I moved to a LCOLA but I like my job, my neighborhood, and making lots of money.

I don't think there are very many friends who could guess at my household income with any accuracy. And those that could, probably don't care.

« Last Edit: January 25, 2016, 12:03:08 PM by honeybbq »

BlueHouse

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Re: Relatives or friends who are extremely wealthy
« Reply #38 on: January 25, 2016, 12:18:08 PM »
I dated someone for ~ 7 years who created and sold 3 different technologies/companies.  2 of the sales were enough to make him Kardashian-style wealthy.  His pattern was to purchase the things he wanted, but to never get rid of them (or just give them away if he didn't want to be bothered with storage for the items).  So each time he moved, he bought a new house and just left behind the old one, contents and all.  He still owned them, and didn't walk away from payments on them.  He just rarely used them anymore.  I'm pretty sure he owned 6 or 7 homes in the US and the UK.  Same with cars, except he bought cars like toys, so he had many more cars and with the majority of those being collector-status, he did pay to store them securely.  Despite all of this, he wasn't irresponsible with his money - he invested very well and will likely never run out of money, and he appeared to live a modest (albeit very wealthy) lifestyle - this seems like an impossible dichotomy, but we lived across the street from an extremely wealthy rock star who did NOT live modestly by any means, so I guess I'm seeing it in relative terms.  And I'm sure the rock star did not have as much money or as sound a financial portfolio as my BF. 
He had a difficult time making (real) friends and socialized mostly with people who worked for him (lawyers, advisors, brokers, a few select employees, etc).  He depended on me quite a bit to introduce new friends into his circle.  The wealth difference was difficult to deal with because he always wanted to eat out at the best restaurants, and understanding that not everyone could afford it as much as he could, he always insisted on paying.  This is where the problems started creeping in. 

The problems I encountered: 
1.  At first, it was foreign to me and I'd try to convince him how ridiculous it was to buy cars that cost more than my house.
2.  After a while, I became used to being the beneficiary of his generosity and started to accumulate possessions and a lifestyle that people with my income at that time had no business owning. 
3.  My friends weren't the type to accept handouts and eventually withdrew as the types of things we did became too expensive for ordinary income-earners.  This led to isolation, etc. 
3.  Finally, it became obvious that I wasn't experiencing just a wealth disparity, but a power disparity.  I started to disappear (metaphorically) and my opinions and thoughts gradually became less important than his.  It became a very unhealthy situation for me.  I noticed this with others in his social circle, and those with any kind of backbone eventually stopped socializing.


I found it difficult to extricate myself from the situation and ended up moving a few hundred miles away, leaving everything "of mine" that he had bought for me behind, and starting a different career.  I never thought I would fall prey to that type of manipulation, control, power differential, whatever you call it.  But I did and now feel so much more powerful for having done it AND started a new, successful career all on my own. 

I can say this with certainty.  It is immensely more satisfying when you earn it yourself.  I'll never have that kind of money, and frankly, I don't want it. 


jeromedawg

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Re: Relatives or friends who are extremely wealthy
« Reply #39 on: January 25, 2016, 12:45:11 PM »
I dated someone for ~ 7 years who created and sold 3 different technologies/companies.  2 of the sales were enough to make him Kardashian-style wealthy.  His pattern was to purchase the things he wanted, but to never get rid of them (or just give them away if he didn't want to be bothered with storage for the items).  So each time he moved, he bought a new house and just left behind the old one, contents and all.  He still owned them, and didn't walk away from payments on them.  He just rarely used them anymore.  I'm pretty sure he owned 6 or 7 homes in the US and the UK.  Same with cars, except he bought cars like toys, so he had many more cars and with the majority of those being collector-status, he did pay to store them securely.  Despite all of this, he wasn't irresponsible with his money - he invested very well and will likely never run out of money, and he appeared to live a modest (albeit very wealthy) lifestyle - this seems like an impossible dichotomy, but we lived across the street from an extremely wealthy rock star who did NOT live modestly by any means, so I guess I'm seeing it in relative terms.  And I'm sure the rock star did not have as much money or as sound a financial portfolio as my BF. 
He had a difficult time making (real) friends and socialized mostly with people who worked for him (lawyers, advisors, brokers, a few select employees, etc).  He depended on me quite a bit to introduce new friends into his circle.  The wealth difference was difficult to deal with because he always wanted to eat out at the best restaurants, and understanding that not everyone could afford it as much as he could, he always insisted on paying.  This is where the problems started creeping in. 

The problems I encountered: 
1.  At first, it was foreign to me and I'd try to convince him how ridiculous it was to buy cars that cost more than my house.
2.  After a while, I became used to being the beneficiary of his generosity and started to accumulate possessions and a lifestyle that people with my income at that time had no business owning. 
3.  My friends weren't the type to accept handouts and eventually withdrew as the types of things we did became too expensive for ordinary income-earners.  This led to isolation, etc. 
3.  Finally, it became obvious that I wasn't experiencing just a wealth disparity, but a power disparity.  I started to disappear (metaphorically) and my opinions and thoughts gradually became less important than his.  It became a very unhealthy situation for me.  I noticed this with others in his social circle, and those with any kind of backbone eventually stopped socializing.


I found it difficult to extricate myself from the situation and ended up moving a few hundred miles away, leaving everything "of mine" that he had bought for me behind, and starting a different career.  I never thought I would fall prey to that type of manipulation, control, power differential, whatever you call it.  But I did and now feel so much more powerful for having done it AND started a new, successful career all on my own. 

I can say this with certainty.  It is immensely more satisfying when you earn it yourself.  I'll never have that kind of money, and frankly, I don't want it.

Wow, thanks for sharing your perspective and thoughts! That sounds like more proper example of what "extreme" wealth looks like. I know of a couple where the wife married into similar wealth... the guy owns an internet provider company and has a daughter. They either rent or own what appears to be a very expensive apartment unit in the LA area. Seems they would go on quite a few shopping splurges and buy super expensive purses, shoes, suits, other clothing, cars, etc and then like to post their purchases up on Facebook. There was one where they went to some popular fashion show in Paris and posted pictures of the invitation and from the event. It started getting too ridiculous, so I just de-friended her because I was tired of seeing all the latest purchases (plus, I wasn't really that good of friends with her before she married into wealth anyway). It's scary hearing what this kind of wealth can do to a person.

jeromedawg

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Re: Relatives or friends who are extremely wealthy
« Reply #40 on: January 29, 2016, 11:26:11 AM »
I just realized, after reading MMM's latest article, that my cousin with the Porsche Cayenne Turbo might be like the guy in the article... it really wouldn't surprise me:

http://www.mrmoneymustache.com/2016/01/28/the-man-who-gets-his-cars-for-free/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MrMoneyMustache+%28Mr.+Money+Mustache%29


Buy a nice car at lower-cost than normal, then when you're tired of it just flip it for a "small" profit. I really wouldn't be surprised if this was his intention the whole time. I also wouldn't be surprised if he reads MMM and is following this very thread (if that's the case, sorry I called you "pompous" but it sorta came out that way when you said it!).

EconDiva

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Re: Relatives or friends who are extremely wealthy
« Reply #41 on: January 29, 2016, 11:52:55 AM »
Also my sibling married a person who has a trust fund of about 250M, my own sibling!

I couldn't fathom it and had some mixed feelings (jealousy plus happy for them) but the truth is it put us on such different paths in life that we couldn't relate to each other much.

We still have a loving relationship and fond memories, but we find it hard to talk about everyday things.

Wow.  It seems sad something like that would separate people but at the same time it's totally understandable. 

That situation in effect is *almost* like winning the lottery IMO.

JLee

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Re: Relatives or friends who are extremely wealthy
« Reply #42 on: January 29, 2016, 01:39:32 PM »
I just realized, after reading MMM's latest article, that my cousin with the Porsche Cayenne Turbo might be like the guy in the article... it really wouldn't surprise me:

http://www.mrmoneymustache.com/2016/01/28/the-man-who-gets-his-cars-for-free/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MrMoneyMustache+%28Mr.+Money+Mustache%29


Buy a nice car at lower-cost than normal, then when you're tired of it just flip it for a "small" profit. I really wouldn't be surprised if this was his intention the whole time. I also wouldn't be surprised if he reads MMM and is following this very thread (if that's the case, sorry I called you "pompous" but it sorta came out that way when you said it!).

I drove a Cadillac CTS-V for a couple of years...then sold it for $1000 more than I paid. It was worthwhile. :)

Catbert

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Re: Relatives or friends who are extremely wealthy
« Reply #43 on: January 29, 2016, 04:06:35 PM »
DH has a cousin he's very close to with a ton of money from a "small" business.  An interesting mix of relatively frugal with totally over the top lifestyle.

He lives by himself in a 9000 sq. ft house on 5 acres (much of it vertical) in a HCOL area.  He bought at the top of the market and at one point paid the most property tax of anyone in his city!  He has 5 vehicles including a race car plus a couple of motorcycles.  Drives ~35 miles to work in one of the most congested metro areas of the country.  At one time he was paying 25K A MONTH in child support payments.  His is a largely cash business and several years ago he had "his own" an IRS agent who spent, according to him, about 6 months on-site (maybe a bit of hyperbole there).   

OTOH if you met him you would never suspect how much money he has.  He wears ordinary dress shirts with Levis or slacks (no designer labels).  No jewelry.  He never travels (afraid to fly and doesn't like to be away from home).  He mostly drives an F-150 - a new one every 2 years.  One of his favorite restaurants is Denny's.

goatmom

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Re: Relatives or friends who are extremely wealthy
« Reply #44 on: January 30, 2016, 07:37:49 AM »
$600,000?  Wow.  Physicians in the Northeast are not raking in those kind of salaries.  Most of the doctors in my geographic area are being hired by large groups that own the hospitals and the pay is not what it used to be.  I know plenty of doctors that lead pretty middle class lifestyles.

As for RE and doctors?  I have no desire to RE.  I love my job and spent many years getting where I am. I will cut down my hours and do more volunteer work but unless the medical environment gets too toxic - I don't see retiring until I am not able to work anymore. 

James

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Re: Relatives or friends who are extremely wealthy
« Reply #45 on: January 30, 2016, 08:59:49 AM »
Another anesthesiologist chiming in.  Just before I finished residency in 2006, I bought a lightly used 2006 Chevy HHR.  Nearly 10 years later, I am happy to say I am debt-free, FI, living in a nice middle class neighborhood, and still driving a 2006 Chevy HHR.

I didn't know what FI was until I discovered MMM about a year ago, but apparently I'd been working toward it for quite awhile.  I don't mind spending money, but I've always abhorred wasting money.  In general, I like my job, but I think the paycheck has been a big reason why.  I'll take a day off over a workday any day.  The OP's guesstimate of $300k is closer to the average / truth than the $600k I heard mentioned; although probably 5% of anesthesiologists probably make that or more due to crazy hours, good payor mix, etc...

I think some people are changed by money, others not at all.  I've seen this with friends from medical school and residency.  For some, their personalities haven't changed; others I can't even relate to any more.

I recently put together a thought exercise / blog post comparing 4 physicians each making $300k household income.  I varied their annual spending from $80k to $200k.  The "frugal" physician was FI in about 10 years, the biggest spender probably never.  Nobody talks to you about this stuff during your education / training.  Talking money is taboo, you know.


I agree, when I got out of anesthesia school I had no idea what to do with all the extra income pouring in. I wanted to save a lot, and all I heard or knew about saving "a lot" was maxing the 401K and having a nice balance in the bank account.


I live in the midwest and a small town, so the anesthesia pay here is quite a bit higher than most of the country. Means a lot of call, but high income and low COL. Usually that works out pretty well financially, if you can go where people (in your income bracket) don't want to go, and do what people don't want to do. And not many people making good money want to live in a small town and take 1:3 call... :)  Our anesthesiologist do quite well, so that was where I got the higher range of $500-$600. But I agree, lower numbers make sense in other areas.

Ducky

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Re: Relatives or friends who are extremely wealthy
« Reply #46 on: January 30, 2016, 09:34:13 AM »
I do have one person in my life  well past the deca millionaire mark. I have seen this person evolve over time from I certainly cant spend this much on xyz  and being very frugal to forgetting most of us cant/wont buy a $2000 handbag as their wealth really exploded. This person tends to think all of us are in their wealth category. I occasional have to give a reminder. Still the same sweet person and still a tighwad in some ways. It always makes me grumble a tiny bit as never ever has this person picked up the dinner check when they visit. Its always one of us that are making $75,000 or less. I guess some habits dont change. Yet on the other hand this person is so generous with charity.  If I didnt love this person so much and see them go from so poor everything was rationed to an exploding success I honestly might have a harder timer time understanding some of their actions. If i hadn't I probably wouldnt be comfortable explaining in detail why I cant take a month of and go bum around Europe with them.Id just avoid it.  I really do think we all assume our peers and family are in the same boat we are to a degree.

FrugalBuff

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Re: Relatives or friends who are extremely wealthy
« Reply #47 on: January 30, 2016, 11:29:42 AM »
I have a family friend that managed a hedge fund for a bit. He also comes from old money and his family certainly has a billion dollars. They even own an NFL team. He lives in a house that's about 5000 square feet, shops for discount meat at the grocery store, gets bread from sandwich shops for free before they throw it out at night and spends most of his free time as a volunteer firefighter. His daughter attends public school and works at the mall.

He also collects rare sports cars and when his oldest daughter didn't get into the college she wanted to go to he donated a few new buildings to them.

Overall he isn't a very nice guy, but you'd never guess he sold a business for $800M and owns part of an NFL team. Hanging out with him and his family isn't any different than hanging around my middle class family.
« Last Edit: January 30, 2016, 11:33:58 AM by FrugalBuff »