I don’t think you can tell without looking into their finances. For some, a big house and a couple of new cars signal wealth, but to me, they’re more likely signs of debt and poor financial judgment.
Personally, I live in a small, 75-year-old house, drive a 17-year-old pickup truck, and walk around in old clothes that were never in fashion to begin with. Yet I know for certain that my financial situation is far better than that of the average person in my country. You’d never be able to gauge my true wealth from my appearance or spending habits.
For some, a big house and a couple of new cars signal wealth, but to me, they’re more likely signs of debt and poor financial judgment.
Thank you! I sometimes look at people whose financial situation is known to me and I think “what the fuck is you are doing”.
May I ask what you spend your money on that nobody notices?
In my experience the mix out of everything gives me a feeling on how much they have. A big indicator usually are vacations. If you have money to burn to go on a expensive vacation you probably don’t have money problems.
Not Op, but I was in a very similar situation (decent pay, old house, old car, not many fancy purchases). While many people here will borrow a lot and pay the minimum on their mortgage, I paid down my mortgage completely. (and otherwise spent money on travel).
Ironically, this is bad financial advice. The last 15-20 years interest have been very low, and house prices have soared. It would make much more financial sense to borrow more and buy a nicer house. But I value the freedom I get from not having a mortgage. And I never borrowed to buy a car, as cars depreciate like rocks
It’s more about what I don’t buy - which is a lot. For most of my adult life, I’ve lived well below my means and invested everything I’ve saved. Most people don’t save at all, let alone invest.
My cousin, for example, goes on expensive vacations like the ones you described several times a year. They also drive a nice new BMW. Yet when I recently quoted them €500 for some renovation work, they asked if they could split the payment over a few months because they couldn’t come up with the money all at once.
Suffice it to say, I don’t see vacations as a sign of wealth.
OP already replied, but the answer was super brief: they invest in their future. I don’t know what that looks like for them, but for us it means funding an emergency fund plus 401ks, IRAs, and college funds for our kids. Even if you’re not able to set aside a ton, the more money you can invest when you’re young the better off you’ll be thanks to the power of compounding.
If you’re lucky enough to advance your career put the extra money into your emergency fund and/or investments - you won’t miss it.
If you’re in debt, try to target one loan to pay off. Once you pay off that single loan keep paying that amount towards your next loan. Repeat until necessary. For example, after we paid off our car we put what used to be our old payment as extra $$ for our mortgage.
It’s hard to tell now days because people are into conspicuous consumption. Like you may drive an Acura and they drive a MBZ right? But you may Max out your retirement and savings and they’re saving nothing. I think until you see where their kids go to college you may not be able to easily tell.
Look at where their kids go to school. The rich never skimp on that.
You’re the same age but they’re retired.
I think they’d be a lot more than slightly more successful than me.
People have different priorities. Someone may have just bought a $500 designer shirt, while I bought a $500 comic book. Hard to tell by looking.
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Well assuming you’re not “financially successful” and talking about wealth classes that make their money from working, then by comparison they don’t do anything differently when their paycheck arrives, or even know what day exactly they get their paycheck. If someone is living above their means or otherwise financially at risk, they’re paying close attention to the numbers in their accounts. More subtly, they might say something like “I just got paid, let’s go out for dinner” or “I’ll buy those tickets on Tuesday” when there’s no reason they shouldn’t just get them now for whatever it is.
This, and not knowing the price of basic things.
This, and if they’re a friend, not pausing to think before a shared activity that would make you consider finances. A weekend/weeklong trip, concert tickets to a costly performer/seats, trying a new more expensive restaurant for lunch, etc. Even if they aren’t interested that time, the explanations say that openly or they address the cost in time, not money.
Is the house paid off?
They seem to be at exactly the same level. But they have more savings. At least, given the average savings most people have, that would be enough.
