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Wealthy people who want to remain wealthy don't spend their money on massive houses though.

They may have high incomes, but if their outgoings are higher, they're still going to have problems.



Eh, not really. If someone has $20m they can easily afford a $5m house, which may not be “massive” in the Bay Area but is basically anywhere else.

It’s not even about income so much as not caring. Put yourself in the position of a very wealthy person, unless you are wealthy enough to have personal staff, what do you care about a $10k bill? It’s not a big deal to you and barely worth thinking about, you could easily just forget about paying it and think if it’s really important to pay in a timely manner someone will hound you and you’ll pay it then. You open the mail, see some bill notice, throw it on the kitchen table and hit the golf course.


How do they get the $20m to start with?

If they're earning $1m/pa but spending $1.1m they may look outwardly wealthy, but aren't really. Contrast that with the person who also earns $1m/pa but only spends $500k. They're the wealthy ones, and also probably the ones with the smaller house, cheaper car, and $20m in the bank.

If you 'just forget' about bills, that suggests to me a personality that is worse with money rather than better, ie the type of person likely to spend on material goods rather than spending wealth.

Book recommendation: The Millionaire Next Door.




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