Evaluating Someone’s Net Worth

There is definitely a distorted view of wealth in this world. Over the weekend a bunch of us were talking about a mutual friend who owns a 10,000 square foot home and drives a Mercedes. After talking about all of the things that our friend owned a whole bunch of folks commented on his wealth. One friend said, “He must have a ton of money, his house is huge.” In response my husband piped up and said, “If he has so much money than why does he work 60 hours a week.”

Now don’t get me wrong. My husband and I know a couple of people that work a lot despite having a ton of money, but those folks work for themselves or as presidents of small companies. The wealthy individuals we know don’t work 60 hours a week, at a job they don’t particularly enjoy, for someone else.

Later that night my husband asked what I thought of the conversation. I told him I thought it was funny how our friends assumed someone had a lot of money just because they own a big home and a fancy car. Even after all of the financial turmoil in the markets and all of the talk of people losing homes they can’t afford, our friends still think you can judge a person’s wealth by the cars they drive and the homes they occupy.

9 thoughts on “Evaluating Someone’s Net Worth”

  1. Agreed – people make assumptions too quickly, but we consume for those assumptions to be made. I don’t think I’m too superficial, and I hate mass produced brand name products, especially because I would rather have the no-logo purse than have someone ponder if my Prada is a knock-off. Still, I want to buy expensive things and designer brands I DO like when I can afford it. It’s more about satisfying the ego and reminding myself that I made it, even if I’m still working hard for it.

  2. As a society, we’re going to have a hard time breaking that assumption/mentality that possessing lovely expensive things represents wealth. I certainly remember that back in my youth (hehe, ten years ago?), only those who had money were driving the Benzes and living in the big houses. We didn’t so we rented in a modest area, and others rented apartments. To some extent, the stereotype was true; in our smaller town, that if you had really really nice things, you were wealthy.

    Though I now realize that many other people don’t actually possess the wealth they flaunt, it’s much easier for me as a pf blogger to see that there are other sides to the story. For average folks? Probably not so easy, and likely the reason why consumptionism still rules many mentalities.

  3. My name is Justin. Great Blog, but come on! It may be hard to guess ones wealth but if you are living in a 10,000 square foot house the probability is that you do have money. Lenders may have let people borrow above their means but you are not going to see someone making a wage of 100,000, before taxes, buying a million dollar house on their own wage.

  4. @Justin — Thanks for the kind comments about the blog. Unfortunately, your wage numbers are off by at least $100,000. My estimate is closer to $200,000 a year.

  5. Someone once told me, “you can never tell how much someone makes, or has, but you can usually tell how much they spend”.

    Truer words are rarely spoken.

    nice blog.

  6. Great post! I’ve noticed when people put their net worth on blogs, they often include things I’d never personally include like furniture, they bump up another $20K because they have a degree etc. In a recession these things may give you nothing.
    People often assume people are “rich” due to status symbols. The richest people I know live exceptionally simply in small homes, with small cars and certainly don’t work 60 hrs a week!

  7. I think it’s very easy for people make assumptions based on how much someone spends. It’s easy to look at what people have and come to a conclusion about their financial status.

    There are many people who buy expensive items but are living from pay check to pay check.

    And then there are those people who are wealthy, don’t need to worry about retirement, but don’t spend money on expensive, depreciating items.

    It’s interesting that one can draw an inverse relationship between money spent and financial wealth.

  8. Totally all about appearances…

    I`d rather be known as being normal than `wealthy` because then people expect you to act a certain way or pay for more things, etc…


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