The Rich are different? How so?

In My Humble Opinion
81

[QUOTE=JoeSki]
In Fessie’s “Know any Hard-Core Criminals?” thread, Little Nemo says:

The rich are different? Well, stands to reason. The rich are rich, and most of us aren’t. You’d think that would entail some differences. Other than the monetary ones, what are they? What is the general mindset of the rich person, and how does it differ from Joe Blow?

I realize they’re are books out there such as “The Millionaire Mind”, and “How the Rich Think”, and I’m thinking about picking one of the two up. But I’m curious about getting some SDMB feedback.

So, are they different? And how so?
[/QUOTE]

Oh it’s simple.

‘The rich are different from me and you’.
‘Yes, they’re better people’.

I never net a rich person I didn’t like. if only they liked me more.

82

[QUOTE=caboken]
This is Sagerat’s father. I don’t know if I’m in the category of “rich”, but I certainly qualify as having had a successful business career. I built a fairly large company that I sold, and now spend most of my time traveling and enjoying life.

[/QUOTE]

May I just add - welcome to the SDMB caboken, and I hope you stick around after this thread! As you may have already noticed, people here don’t mince words and you sound like someone who is worthy of not-mincing words with.
I just wanted ot say that regarding the rich being different - my best friend in high school tragically lost both his parents while we were both going to college together. He inherited a town - yes, an entire town in the midwest; main street, surrounding farms, the local bank - you name it. A 20 year-old-orphan, with millions of dollars in assets.

If you met him then, or if you meet him today, you would never guess the guy has millions of dollars. He has four kids (one adopted) and has been married for 34 years, wears jeans every day, mows his own lawn, does repairs on his house by himself, quietly donates money without being asked, and when he comes with his wife to Las Vegas and visits me, he plays quarter machines and is quite thrilled to win $100 on a slot machine.

One thing I have never told him is, when his mother was alive and I was depressed because I had to go to a junior college instead of a university for financial reasons, she heard her son mention it. One day, she pulled me off to a side room and said, “I hear you want to go to the university instead of the community college.” She pulled out her checkbook and said, “how much do you need?” I declined the offer, but always appreciated the fact that she offered.

The entire family had class - and my friend, despite his wealth, still does - so, are the rich different? Guess it depends on your upbringing.

83

[QUOTE=ParentalAdvisory]
A lot of people think folks making $150,000+ a year is rich. I don’t think so.
[/QUOTE]
You can set the bar wherever you like, but at $150K per year you’re making more than nearly 95% of U.S. *households * (forget individual income). Obviously there’s no scientific definition, but the top 5% of the richest country in the world should be considered, by any reasonable standard, “rich.” Honestly if you find it difficult to maintain your lifestyle pulling down more than $10,000 a month, it’s because you’re living very well indeed – or don’t have the first idea how to manage money.

84

[QUOTE=Crafter_Man]
Let’s say you make a boatload of money one year. What are you going to do with the money?
[/QUOTE]

I might buy a large piece of investment real estate and sit on it for 20 years. How does that stimulate the economy?

Or I might take the money that I earned in the US and buy a house on the Costa del Sol in Spain. How does that stimulate the US economy?

85

[QUOTE=spoke-]
I might buy a large piece of investment real estate and sit on it for 20 years. How does that stimulate the economy?
[/quote]

Unless you’re going to let it fall apart or maintain it yourself, you’re going to have to pay someone to keep it in shape.

It doesn’t, but it involves pumping cash into an economy.

86

[QUOTE=ultrafilter]
Unless you’re going to let it fall apart or maintain it yourself, you’re going to have to pay someone to keep it in shape.
[/QUOTE]

I have owned timber acreage for years with no maintenance costs. Raw acreage requires no maintenance.

87

Very interesting read of a thread. Thanks especially to Evil Captor, Sage Rat, and Dad caboken, for insightful posts. I’ve gained a lot from reading here.

I come from a background of middle class people who took opportunities and worked hard, in moving West. Most are decently well off; my grandfather was astute with investments, had foresight, and became rather wealthy, especially for a man who was a musician by trade. I have benefited a bit by that, raised to think I had some wealth, but don’t now, and am still a working lass. In my life, I’ve met rich people who were wonderful, some who were snobs and less that their forebears that gave them the $, and some dirt poor people who gave me more of a personal education in how to be a decent human being than anyone else ever did.

One approach I think would be key in leveling the playing field for all involved, and certainly in keeping with the goals of a Democracy: financial education as classes in high school. Not just “How to Balance Your Budget”, but a concrete explaination of how the system works, and how to participate in that system, with all tips in how to succeed, that knowledge available to every child in this country, from the Git-go.

That financial savvy is the bedrock of the US, so why not teach it well to all ? More smart educated investors, more money invested, more wealth for all. What am I missing?

88

[QUOTE=elelle]
One approach I think would be key in leveling the playing field for all involved, and certainly in keeping with the goals of a Democracy: financial education as classes in high school. Not just “How to Balance Your Budget”, but a concrete explaination of how the system works, and how to participate in that system, with all tips in how to succeed, that knowledge available to every child in this country, from the Git-go.

That financial savvy is the bedrock of the US, so why not teach it well to all ? More smart educated investors, more money invested, more wealth for all. What am I missing?
[/QUOTE]

You aren’t missing anything. Several of us have suggested the same thing many times. I think it would dispel the myth that you just have to get “lucky” to be rich. That doesn’t help anyone especially the people that hold that belief. Some real-life statistics would be good too although I am not sure if the state will pay for education to teach kids not to buy lottery tickets,

89

I agree with this. It’s amazing to me how many people don’t know how interest works, or why money now is worth more than money later, or even what a stock is. How about simply why you shouldn’t ring up tons of bad debt (credit cards) and should enroll in your companys 401k (because matching = free money).

Well..you are and aren’t right. It depends a lot on where you live. In the New York City area, it’s still a pretty good living, but when houses cost $600,000 and a one-bedroom goes for $2500 a month, it’s not Donald Trump money either. You can live really well for that kind of money, but you still have to be smart about it. Especially if you have kids.

More champagne? More EVERYTHING!

Of course the real business world doesn’t work like that. It’s full of competition. Employees trying to climb the ladder to management. Managers trying to become executives. People developing businesses trying to get rich. Once again your posts display a demonstration of how the wealthy and successful think differently from the regular-folk.

Mosty poor and middle class people generally feel they have little or no control over their lives. They are at the whim of bosses, landlords, government, jerky coworkers, etc. They don’t see themselves as people in competition for management or as potential entrepreneurs. “Management” is some outside antagonist to them. They don’t develop the required relationships and instead prefer to associate with other bitter employees who aren’t going anywhere.

Of course you make a good point that everone isn’t Joe Dynamo. By definition, half of us are below average employees. A winner takes all economy is nothing to aspire to either.

90

I have a friend who owns his own business and is thus self-employed. Many of his clients are themselves rich (lawyers, corporate executive officers, etc.), although some of his business is with much humbler middle-middle class people.

He’s often complained about the difficulties he’s had in getting some of his presumably richest clients to pay for services rendered. Sometimes they [in his words] bitch and moan about the most picayune little things, even things that they’re responsible for maintaining or things that weren’t part of the original contracted work order. Sometimes they try to extract ever more bits of work out of him in promise for payment or partial payment. Sometimes this only happens when their bills become past due and my friend presses them for payment; he sees their tactics as clearly meant to stall on payment, dodge the issue, and deflect blame.

Invariably, these assholes are affluent. McMansion in the hills, three BMWs in the driveway, and so forth. My friend has had this happen to him so many times, he jokes about counting the luxury import cars as a gauge of character; two or more pricey German (or whatever) cars is a sign of possible trouble ahead.

OTOH, he’s never had a problem collecting from his squarely middle-class clients, who typically have to scrimp and save before contracting a [modestly scaled and priced] job from him. My friend has been at pains to explain and understand it: the public schoolteacher-types put off the big splurge until they can afford it, are always pleased with the results, and pay up promptly; but the corporate big wheels stall, ignore his calls, trump up excuses, and try to extort little add-ons before reluctantly making even a partial payment.

It’s his theory that it’s precisely such sociopathic, selfish behavior that has helped make some of these rich people as rich and successful as they are. YMMV, of course.

91

Here’s another thought on the rich, and if they are really different…

Someone once told me that highly successful people fit into one of three categories, and that once you know which category they fit into, you know a lot about them. Over time, I’ve found this to be a fun exercise.

The categories are:

  1. Persons who inherited their money (aka “The Lucky Sperm Club”)
  2. Entrepreneurs who built their companies
  3. MBAs (aka “Hired Guns”)

Persons in the first category are always extremely charming and fun people, but have the least business sense. They often inherit companies, which they sometimes wreck, unless the company is so large that it is tough to ruin. Frequently, they have the same last name as the company they run, and are the second or third generation to run the company. There are certainly exceptions, but generally, these people are not 100% focused on their companies. They are living off a salary from the company, or a trust fund, and spend their time traveling and having fun. Often, there isn’t even a company: they are just enjoying living off the trust fund. These are almost certainly the most fun people to hang out with, but growing their company is usually not priority #1. For instance: I can think someone with the last name Hilton who fits into this category.

I confess that I am a part of category #2. I built a company from the bottom up, ran it for 17 years, including 8 as a public company, before selling it. Entrepreneurs tend to be company-centric, and highly passionate about their companies and the products. They live for their companies and are usually the first ones in and the last ones out. They are also extremely aggressive, and will often venture into new business categories and take risks which sometimes work out, and sometimes don’t. These people make things happen, and are never boring.

The last category is the professional manager, the MBA, or what I sometimes call the “hired gun.” These are the executives, usually from top schools (Harvard, Stanford, etc) who move into large corporations as executives and climb the ranks over time. These are numbers people who are rarely entrepreneurial, but focus instead on inventory turns, average cost to produce a widget, proper communication channels, and spend hours studying the P&L or balance sheet. I think of these people as best in mature companies, which have a well defined product and target market. They are very good at transforming formerly entrepreneurial enterprises into well-oiled machines. They are very bad at reacting to a changing marketplace.

I don’t know if this “thought” is on subject or not. I think the original question being debated was “Are the rich different than the rest of us?” I’m just trying to break-down the word “rich” into some smaller categories. This is important because when most people think of the rich, I think they are focusing on persons in category 1 above, or persons like myself who was once in category 2, but am now somewhat of a deadbeat (nothing but enjoying life, and passing time on things like internet message boards<grin>). Because these people are highly visible, and don’t appear to be doing anything, it is easy to get a negative impression. You see the fun part, without seeing the hard work behind it. Personally, I think capitalism is great, and that persons in category 2 or 3 add immeasurably to the success of all Americans, and no country can succeed economically without them.

CaboKen

92

[QUOTE=caboken]

The last category is the professional manager, the MBA, or what I sometimes call the “hired gun.” These are the executives, usually from top schools (Harvard, Stanford, etc) who move into large corporations as executives and climb the ranks over time. These are numbers people who are rarely entrepreneurial, but focus instead on inventory turns, average cost to produce a widget, proper communication channels, and spend hours studying the P&L or balance sheet. I think of these people as best in mature companies, which have a well defined product and target market. They are very good at transforming formerly entrepreneurial enterprises into well-oiled machines. They are very bad at reacting to a changing marketplace.

[/QUOTE]

Speaking as an MBA, whoever told you this has no idea whatsoever what they are talking about. People rarely graduate from business school (even Harvard) and jump into being an executive unless they were almost at that level to begin with (IOW an executive MBA program) or belong to either group 1 or 2.

The last category is “highly paid elite professionals” which include doctors, investment bankers, traders, stockbroker/financial advisors, real estate professionals, certain attorneys, partners in CPA firms and management consultants. These are individuals who graduate with high marks from top ranked schools and then get onto a certain career track at top firms in their field. They then stick with those firms, busting their ass for 6-12 years until they reach partner or managing director or whatever the top level is called.

This is probably one of the hardest tracks because it
a) requires that you have a particular pedigree that starts as early as high school.
b) there is a very specific track you need to be on:
ie Harvard -> 2 year analyst program at Morgan Stanley -> Wharton MBA (paid for by MS)-> first year Assocate, second year, etc up to Managing Director.
c) jobs that are less pedigree driven (say..sales) might be 100% commission based so you either get rich or broke
and you might want to add a fourth category:
4) smart, successful people who save and invest wisely over their life to retire in relative wealth

93

[QUOTE=msmith537]
and you might want to add a fourth category:
4) smart, successful people who save and invest wisely over their life to retire in relative wealth
[/QUOTE]
This brings up an interesting question to me that I can’t ever quite figure out from reading threads like this one…what do people consider to be “rich?” Seems to be a different answer for everyone. Look at Oprah vs. Paris Hilton. They both have boatloads of money, but you have to figure that there must be some difference between having earned the dough vs. inheriting it all.

And it seems that Oprah kind of rich is not what people really mean when they say rich. If you own a small company that grosses a couple of million a year, and you work hard every single day to keep it running and have a couple of employees to help you out, and you end up taking home maybe three hundred grand for your troubles, are you rich, and how would you be all that different from anyone else who works hard every day?

What about people like me and my husband, who together make a decent income, but both work pretty hard and live much more frugally than we have to, save & invest, so we don’t have to worry about what happens to social security? If we, together, make twice as much as the median income, for instance, does that make us rich?

These four scenarios are very, very different from each other, but I’ll bet a lot of people would consider all 4 to be examples of the “rich.” So, how can we say that the rich are different from everyone else, when the d can be so very different from each other?

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[QUOTE=Sarahfeena]
This brings up an interesting question to me that I can’t ever quite figure out from reading threads like this one…what do people consider to be “rich?” Seems to be a different answer for everyone. Look at Oprah vs. Paris Hilton. They both have boatloads of money, but you have to figure that there must be some difference between having earned the dough vs. inheriting it all.
[/QUOTE]

There are certain differences in how these people have accumulated wealth. But the simple answer as to if they’re rich or not, is that they have it, they’re rich. Both do not have to work for their income. Sure Oprah still “works”, but it’s totally voluntary. If she quit today, her cash and assets can weather her and her family for quite sometime.

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[QUOTE=ParentalAdvisory]
There are certain differences in how these people have accumulated wealth. But the simple answer as to if they’re rich or not, is that they have it, they’re rich. Both do not have to work for their income. Sure Oprah still “works”, but it’s totally voluntary. If she quit today, her cash and assets can weather her and her family for quite sometime.
[/QUOTE]
Sure, she could quit any time she wants, but she still earned it, which has to have some kind of different psychology associated with it. The fact that she earned it in the first place may be a major driver as to why she STILL works, when she clearly doesn’t have to. I don’t think “they have it, so they are rich, and therefore different” really covers it. Assuming, that is, that we are talking about personality and psychology being the “different” in the OP, vs. simply having money vs. not.

96

[QUOTE=msmith537]
Speaking as an MBA, whoever told you this has no idea whatsoever what they are talking about. People rarely graduate from business school (even Harvard) and jump into being an executive unless they were almost at that level to begin with (IOW an executive MBA program) or belong to either group 1 or 2.

[/QUOTE]

Sorry .. you are right.. I didn’t mean to imply that anyone starts at the top. I was referring to those who had already made it, not those who were on the way up. More specifically, I was referring to those who are CEOs of significant companies (as the thread referred to “rich”). Mentally, I drew the line at income over $200,000 per year, although as someone else pointed out - everyone draws the line as to who is rich at a different level.

CaboKen

97

[QUOTE=Sarahfeena]
Assuming, that is, that we are talking about personality and psychology being the “different” in the OP, vs. simply having money vs. not.
[/QUOTE]

I suppose I did divert from the “difference” part of the rich in my reply to you. But you did ask, ‘what do people consider to be “rich?”’. So far this thread has posed both questions, I guess I interpreted your question in the literal sense.

The difference between Oprah and Paris, is that Paris was extremely lucky to have landed her inheritence. Oprah simply is great with interpersonal skills, and became in high demand from the public, and has a entrepreneurial spirit. But to be fair, for some reason, Paris fulfils some kind of void in society and still earns income from appearences, clothing lines and such - in which she doesn’t really have to do either, but can because she was lucky and came into a big windfall. Her luck has enabled her to do all Oprah can do, but skipped the hard work part early on. Both are still “rich” though in monetary value in every sense.

It could be argued that Oprah was lucky as hell too. A lot of people have her skills, she just happened to be the one to get the great offers at the right time. There are likely to be millions of people like her that posseses the same skills, maybe even better. What’s the deal there? Who was it that said good things take a lifetime, but great things happen all at once? I believe in that to a degree, we’re all in that lottery I suppose. Look at Brad and Angelina, could you imagine living in a 3rd world country and getting scooped up by these two? Damn.

98

[QUOTE=ParentalAdvisory]
It could be argued that Oprah was lucky as hell too. A lot of people have her skills, she just happened to be the one to get the great offers at the right time. There are likely to be millions of people like her that posseses the same skills, maybe even better.
[/QUOTE]

I’m certain that luck did play some part into her success. But when you look at Oprah Winfrey, or a better example Madonna, you’ll note that lots of other people started talk shows, womens’ magazines, etc. but Oprah has been the one who lasts decade into decade. Part of that has to do with simply putting on a good show of course, but at the same time she’s always using her current position as leverage to start new businesses, keeping a watch on the overall quality, and probably doing a lot of background work with the studios and TV stations.

At some point, to be certain, she was “chosen” from up on high. But the reason why she has remained is because she has the business and product sense to do so.