A while back, Nelson at (the now defunct) Financial Uproar recently posted about definitions of rich according to a variety of celebrities and polls. I love posts about semantics, and the range of responses to this one shows that “rich” is a complex term.
Chris Rock’s comedy routine about wealthy vs. rich is great. In some versions of it, he says that wealth is forever, while rich is a count down to being poor again. The sad stories about sports stars or celebrities who go from multi-million dollar paychecks to bankruptcy illustrate this difference.
The definition I like best, which 10% of the UBS Investor Watch poll said, is that rich means “not having to work again“. The having part of this is important to me – it doesn’t mean you won’t work again, but it will be your choice and on your terms.
Being at this point while still working at a job is a nice position to be in as well. This is sometimes called “fuck you money”, as best articulated by John Goodman in “The Gambler”:
Apparently, there used to be employees at Electronic Arts, a game development company, that had plaques on their desk that said “DFWMIFV”. This stood for “Don’t Fuck With Me, I’m Fully Vested”. This meant that their stock options had vested: they were independently wealthy and could quit their jobs if they had to.
According To This Definition, I’m Rich
I’m in my late 30’s, and through a combination of reducing my living expenses and growing my savings, I could live a meager existence without working again. My spending is a little above the poverty level in America – $11,770 per year. I don’t feel in any way that this is deprivation.
In the last year my wife and I have:
- eaten out MANY times at a variety of restaurants (with a top bill of about $150 for the two of us)
- traveled to Europe, Turkey and Spain
- owned our own home
- attended Gen Con
- spent loads of time with family and friends
I haven’t:
- owned a car
- spent lavishly on clothes or electronic gadgets
- drank alcohol or smoked
- done recreational drugs
- tried to keep up with the Joneses
I’d like to live as a poor man with lots of money.
Pablo Picasso
Philip Greenspun’s essay on early retirement makes the point “Americans cannot imagine stopping work before they’ve either (1) purchased everything that they could conceivably want, or (2) collapsed from physical exhaustion.”
I get that people are confused by how I’m living my life.
Offense and Defense Of Wealth
In the classic “The Millionaire Next Door“, authors Stanley and Danko write about the offense and defense of wealth. By this, they mean building your income and controlling your spending. Many blogs and gurus focus on one or the other, but from my perspective, the combination is especially powerful.
With A Spouse
Before we got married my wife and I discussed these issues at length. While she still works full time, we’ve run the numbers and she can switch to part-time work whenever she wants. She’d like to eventually do this, but not in the near future.
I’ve offered to work full time and we’d jointly save for her to be able to stop working, but she isn’t interested right now.
We’ve split our living expenses, with me paying everything related to the house – rent/mortgage, utilities, internet, Netflix, repairs, etc. and her paying for groceries, healthcare, her car, and her cat. Usually, when we go out to eat I treat. She is able to save far more money every month than she could when she was single.
When Jacob Fisker of Early Retirement Extreme fame revealed that he was “retired” and his wife still works he got a lot of flak about having his wife support him. Again, living a different life than is typical can be confusing to many people. Bill Cosby once said, “I don’t know the key to success, but the key to failure is trying to please everybody.” (Is it still cool to quote Bill Cosby?)
What To Do With This Freedom?
Not having to go into an office for 40 hours a week gives you a lot more time in your life. I’m exploring a number of projects, checking in with how they develop, and planning to put more time and effort into things that seem to be paying off. Since I “retired” years ago I’ve:
- Started a numberous blogs
- Started (and shut down) a couple of businesses
- Created a boardgame, I’m working towards eventually publishing and selling it
- Returned to the workforce as a professor, then retired again
- Wrote multiple books
In the future, I’m considering:
- Starting a software company, probably focusing on educational technologies
- Starting a property management company
- Teaching sessional positions at a university
- Building and selling an online course
- Starting a blog about making boardgames
I’ve found all of this far more rewarding than trying to get things done in the workplaces I’ve been in.
What is your definition of rich?
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