Late last year, J took a trip with his dad to visit his cousins. When he got home, he recounted all his adventures and added, “they must be rich because they have a pool.”
A few years ago, I would have agreed with him. His cousins have a very large house, drive fancy cars and take elaborate vacations.
But then I read The Millionaire Next Door. (Here’s the first chapter if you want a preview!)
In it, the author makes the important point that you can’t tell how much people have based on what they buy.
Hearing it now, it makes total sense. But for 30+ years, I can say that that thought never occurred to me.
So we talked about it. I told him that you can’t tell how much people have saved. The pool doesn’t prove that they DO have a lot of money and it also doesn’t prove that they DON’T.
I brought it up again last night. I said, “Do you remember when you said that your cousins must be rich because they have a pool? Does having a pool or a fancy car or big house mean you are rich?” To which he replied no. I asked, “Does it mean that you aren’t rich?” And he also said no. (Woo! He remembered!)
Then I asked, “What does it mean?” Unfortunately, he was hard pressed to explain further.
So I explained again that there was NO WAY to tell how much money someone had saved based on their car or house or vacations. Maybe you can tell how much they spent, but really not even that completely because maybe they got the item at a discount or given to them.