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Originally Posted by macallan25
This reminds me of The Millionaire Next Door and the discussion in it about the difference between people with actual wealth and people that just have a high income. The authors make a distinction between Under Accumulators of Wealth (UAWs) and Prodigious Accumulators of Wealth (PAWs). Most of the millionaire households that they profiled did not have the extravagant lifestyles that most people would assume. This finding is backed up by surveys indicating how little these millionaire households have spent on such things as cars, watches, suits, and other luxury products/services. Most importantly, the book gives a list of reasons for why these people managed to accumulate so much wealth (the top one being that "They live below their means"). The authors make a distinction between the 'Balance Sheet Affluent' (those with actual wealth, or high net-worth) and the 'Income Affluent' (those with a high income, but little actual wealth, or low net-worth).
Really an excellent book.
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I had to read that book for an english class my freshman year. The book was so true to my surrounding at the time, I lived and worked in Grosse Pointe, didn't know who really had money or who was just leasing the Porsche. My parents have a millionaire next door, and its just like how the author mentions it. My mom's reaction to them is classic, " they're loaded but they live in poverty".