Am I a Rich Dad or a Poor Dad?

I watched my daughter walk through their house, in awe.

“Daddy, she has TWO rooms! Daddy, this room has a trampoline in it!”

Here’s the trampoline we’re talking about. I don’t think the kid, staring into your soul, comes with it. I would have guessed they were closer to $150, but we just wouldn’t have the space for something like this inside our house.

I avoided eye contact with Dave, a best friend of mine since high school. I had just realized for the first time that:

Some day, Daughter_01 will think that we are poor.

Some day, she’ll think that people like Dave are rich, and maybe she’ll even feel some shame about our “plight.”

For now, she’s 3.5, and she couldn’t care less. Still, what about when she’s older?

Some Context

I hadn’t seen Dave’s new house since he bought it about 9 months ago. We’ve both started families, and free time just isn’t what it used to be. So we thought it’d be fun to get the kids together, cook some home-made pizza, and maybe sneak in some PS4 gaming time while the girls play.

Everything went great. The girls got along nicely, and Dave and I completed a mission on Diablo 3 while catching up about family, careers, life. All-in-all, not a bad (or expensive) way to spend a few hours on a Sunday.

For my gamers, Diablo 3 is on sale for $29.39 if you have a prime membership. I paid a little over $50 for it, used, when I got it at GameStop, which is still a solid deal considering how many hours I’ve put into it.

And, as I’ve discussed before, spending time tends to correlate positively with building meaningful experiences, saving money, and getting more out of life. You can read my post about that here:

Experience Life While Saving Money

Some Numbers

He and his wife are early 30s, both work full-time jobs, and are making pretty decent money for our area.

In 2015, the median household income for South Carolina was $47,238, and he and his wife bring in a total of about $130,000.

They lived in their first home for about 7 years and recently sold it for $100,000. That home was a 1200 sqft, 3bed/2bath house in a quiet, older neighborhood. With property taxes and insurance in our county, a 30yr fixed mortgage at 3.85% interest would mean a monthly payment of $534.64.

The new home (similar one “for sale” shown above) is new construction, a whopping 2700 sqft, 4bed/3bath, and came in right at $200,000.  This would equate to a monthly payment of $1,069.24.

So, people expand their lifestyle, double their home expenses as their income grows. This is not a new concept. Most people live this way, and it looks really good, on the outside. To most people, it even looks rich.

We simply refuse to “look rich.”

Important Disclaimer

I am not bashing Dave’s choice to buy a bigger house, though I wouldn’t have recommended it. He can obviously afford it, and he does try to live within his means. He’s a great husband, dad, and friend. These numbers are just meant to add context to the story.

More Numbers

Our household income weighs in at roughly $155,000. We live in a 1460 sqft, 3bed/2bath home worth an estimated $132,000. Our hood is a cookie-cutter neighborhood which is about 8 years old. We do not have a mortgage, but we do pay taxes and insurance still, which equates to a monthly obligation of $108.66.

We’ve been in this home for six years and have considered moving a few times, but we recently made up our minds once and for all to stay put. You can read about that here:

Why We Chose Not to Move

We’re in a pretty good position, not ready to retire early or anything, but I’d say we’re doing well. Yet, we don’t have a guest bedroom, office, sun room, or a man cave. Daughter_01 has a bedroom, but she will never have a separate playroom.

Though, her rich friends are sure to.

What’s the Rich Dad Concept?

I read the book, Rich Dad Poor Dad, when I was 21 or 22, and I understood the concepts it presented well enough, academically anyway.

Image result for rich dad poor dad

If you haven’t read the book, well you’ve got ZERO excuses. It’s a super quick read, and it’s jam packed with solid insight (and advice) on how the rich get richer and the poor stay poor. I highly recommend the book; it’s what set me off on the path of wanting to take control of my finances in the first place.

 

Click here to pick up a copy of the audio or paperback. I do receive a commission. Thanks, hope you enjoy it!

So I understood the concepts well enough, but I hadn’t considered that one day I might experience one of them for myself as a parent some day.

The particular element to which I’m referring is this: After being told that his dad is financially savvy,  the author’s friend, Mike, is pondering why it doesn’t appear that way on the exterior:

“My dad?” Mike asked again in disbelief. “Then how come we don’t have a nice car and a nice house like the rich kids at school?”

“A nice car and a nice house does not necessarily mean you’re rich or you know how to make money.”

Excerpt from Rich Dad Poor Dad, by Robert Kiyosaki

A Family Shares the Load

I’m 31, and I’ve spent the last 10 years being frugal and completely geeking out about personal finance. I’ve dealt with external pressures and criticism from friends, family, and co-workers alike.

I can’t say that none of it bothered me, because some of it surely did. However, I mostly didn’t give two shits what haters thought, and being the troll that I am, in some cases I enjoyed the conflict. I maintained my position, stuck to my plan, and I’m now 100% debt free with a kick-ass net worth.

But why do my problems have to become my daughter’s? She didn’t ask for any of this, but she’ll have to bear the burden regardless. Kids may ask her about her used threads. Maybe she’ll deal with comments about not having the same cool stuff her friends have.

How will this affect her? Will she think we’re poor? If she thinks we’re poor, will she ask us about it and give us the opportunity to explain?

Sure, I don’t care what the haters think, but I do care what my daughter thinks. Call me sensitive.

Image may contain: 1 person, smiling, sitting, eating, food and indoor

So Where Do We Go From Here?

We’re not changing our strategy up just because it makes our kiddo uncomfortable. At the end of the day, just like us, she’ll have to deal with her own internal conflicts and figure out how to reconcile with our approach to life. Hopefully, we’ll get to help her do that.

This isn’t something I’ve done before, so I can’t speak from experience, but I can tell you how we plan to handle things. We’ll do the best we can to explain that our family values living and creating new and fun experiences rather than accumulating stuff. When the opportunity presents itself, we’ll continually connect our fun experiences back to the careful decisions we make with money.

Ending on a Positive Note

What are the things that Daughter_01 will get to do and experience that will make her life richer than most kids her age?

(Image above: Our recent blueberry picking outing on July 4th!)

Travel and Living

  • Trips to amazing places (local, national/international) with high frequency
  • Mom and Dad will be around more, less work, more play, more experiences together
  • Weekly day trips to the zoo & splash pad, beach, mountains, strawberry/blueberry picking, downtown street market, and more

Financial & Educational Support

  • Assistance with paying for college
  • Personal finance training
  • Start adult life off on the right foot, hopefully no debt
  • She’ll understand the value of money, how to work for it
  • She’ll learn to have fun without spending money

Words of Encouragement

If you’re on a mission to destroy your debt or become financially independent, you will encounter resistance and criticism.

If you are a parent, you may have experienced something similar to what I’ve shared, and my message to you is this:

You may not receive recognition from your children, and you won’t be perceived by outsiders as “rich”. Stick to your plan. Make the decisions that will give your family the best outcome. Doors will continue to open for you, and you’ll only wish you had started sooner.

Get Your Act Together.

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12 Replies to “Am I a Rich Dad or a Poor Dad?”

  1. Man I live in the wrong region of the country….. 200k here would get you a townhouse with , if your lucky, 1800 sq feet.

    In all seriousness, making decisions for finances based on the wants of your children or comparison are both fools errands. There will always be someone with more or something a kid wants that is off the scale more. Things don’t equal loving parents. I’m sure you get that but sometimes I feel like repeating that when some people I know spend fortunes on their kids.

    1. FTF – Yeah, cost of living is definitely lower here. My recommendation if you are in a higher income area is: stay put, make and save your money. Then consider retiring to a lower cost of living area like South Carolina…two hours from everything, beach, mountains…six hours drive north to D.C. or south to Disney World. Reason I’d say not to move here while still working is we tend to rank in the bottom 45-47 in terms of income.

    2. I wish my townhouse costs $200k haha. we just bought a townhouse for $373k, 1200 sqft and that was a deal in OC, CA. I would even call it a fixer upper lol…

      1. Well, our incomes tend to be in the bottom 45-48 of all states, so feel free to come join us! 🙂 Buying a fixer upper is a good call, in my opinion. Force some appreciation on that bad boy!

  2. You’re totally a rich dad.

    Maybe when your daughter is older you can give her the Rich Dad, Poor Dad book to read and she figure it out herself.

    Also, I need to move to where you are, stat. Would die for a mortgage that low.

    1. Haha – come on down, but I don’t think the fashion will be up to par. Very different culture here in the “country”. I sincerely hope my daughter turns out to be like one of you finance savvy chicks.

    1. Hey Araminta! I hope so! We’ll do the best we can to show her our way and to let her make mistakes, while she’s still young and it can’t ruin her. Then at some point, gotta let her spread those wings…

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