I think the point is that people are too busy “enjoying” their income to ever build any real wealth. Heck, these days you don’t even need an income to live as if you have one thanks to the good people at Visa and Mastercard.
I would submit that a millionaire living next door to you is not living the same life as you. Yes, he may have the same house, car, social circle, etc., but he goes to sleep at night knowing that he’s financially secure and is capable of taking care of himself in the future.
Of course, you can take this to an unhealthy extreme, the desire to accumulate assets. Here’s an example.
My mother had a long-time friend who was a government worker his entire life. He lived modestly, spending the last thirty-plus years of his life in the same apartment in a part of southeast Washington, DC, called Anacostia.
This part of town underwent a major transformation, primarily in the wrong direction, over those thirty-plus years. Major crime was and is a real problem. Open-air drug markets are common. Murder is a daily part of life. Robberies go unreported because the police really don’t have the time.
My mother’s friend was the last white person living in the 400-plus unit apartment complex. Clearly, he didn’t have a racist bone in his body, and he didn’t move to “greener pastures” when others had long since fled.
Towards the end of his life, my mother was making more and more trips to Anacostia, either to bring him food or take him to the doctor or to bring him back to our house for a day to spend time together. For years my mother had asked him, “Would you ever consider perhaps buying a little place closer to us? It would be a good idea for us to be closer to you in case something happens.” (He lived about 30-40 minutes away.)
He would always respond, “How can I buy something? I am on a pension. I can not afford it.” At the time, a little townhouse near us would cost about $75K.
The back-and-forth to Anacostia went on for years until he died. When he passed away, my mother learned that her friend had left half of his money to his church and the other half to her. Her share of the estate would be worth about $250K.
Even though he had lived for about 20 years beyond retirement, and even though he was a moderately paid government employee all his life, he still had a half-million dollars in cash in the bank when he died.
My mother was just about in shock. She had no idea he had that kind of cash, which was fine as it really wasn’t her business. The thing is, while most people would have been happy to walk into a quarter-million dollars, she was actually miffed with him for having been so obsessed with saving his money. She gave up many, many hours of her life during the preceding ten years to help him in his old age, and her life could been made easier has he not wanted to squirrel away every last penny.
Some could argue that the $250K was payment enough for those years, but it’s really not accurate. My mother was not a particularly young woman at the time, either, and all of that driving back and forth took a toll on her, too, not to mention she was not thrilled about being in that part of town so often.
In my opinion, this was a case where working so hard to save money didn’t work in everyone’s best interest. And actually, buying that house would have only increased his net worth, especially compared to wasting it on rent for thirty-plus years.
