Myth: The Rich Don’t Care About Money. Fact: You Won’t Believe This …

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A few months ago I landed an assignment with a new business-to-business publication. It wanted me to write an article explaining how landscaping company owners can find new customers.

I interviewed three owners of small mom-and-pop landscape companies. All of them said — among other things — that they offer some type of discount to customers who send word-of-mouth referrals.

That’s straightforward enough, right?

I sent the draft article to my editor, including that detail. She sent it back with the following comment:

“People who hire landscapers are rich and don’t care about a discount.”

Um, what?!

Her statement is so full of errors that I don’t know where to begin.

We’ll set aside the ridiculous comment that “people who hire landscapers are rich.” (Um, perhaps they’re busy juggling kids and a job? Perhaps they’re too elderly or sick to tend their own lawns? Perhaps they’re frequently out-of-town because of work or family?)

Instead, let’s look at the other assumption in her statement — the stereotype that rich people are spend-a-holics.

The Myth That Rich People Are Wasteful With Money

Perhaps television is to blame — The Real Housewives is just entertainment! It’s fiction! — but many people labor under the impression that being wealthy equals being wasteful.

I hear this stereotype constantly — “Oh, they’re rich. They don’t care about money” — and it blows my mind. Why do people believe that once a person’s net worth crosses a certain threshold, their skill at handling money slides into reverse?

I believe the opposite is true. People become rich by being skilled at money management. “The rich” start out as people like you and me: normal people who earn, save and invest.

We do it regularly. Lather, rinse, repeat. $100 grows to $110, then to $121. The interest compounds while add more to the principal. We buy real estate, start businesses, repay debt. We take calculated risks and we’re always looking for ways to earn more.

What about people who inherited their wealth?

The answer is simple: Heirs who steward and shepherd their family wealth will maintain and grow it. Heirs who squander their family wealth will lose it. One group will remain rich; the other group will not.

You Can’t Outsource Your Brain

I often hear the argument: “Rich people pay someone to take care of their money.” That’s about as sensible as saying, “Athletes pay someone to hit the 6-minute mile.”

Sure, the rich hire advisers, accountants and bookkeepers. They don’t do their own data-entry.

But like any company president, they’re responsible for hiring and firing their advisers and accountants. They’re the team leader. The buck stops with them.

You can’t pay someone else to take care of your money, any more than you can pay someone to take care of your health. You can hire nutrition counselors, Pilates instructors and swimming coaches, but you’re ultimately the CEO of your own health. You can hire financial planners and accountants, but you’re ultimately in charge of growing your own net worth.

Which brings me back to my original point — the stereotype that rich people are wasteful with money. That can’t be true. Rich people who are wasteful with money will become poor, just as thin people who eat nothing but deep-fried doughnuts will become fat.

In other words, the rich who — in the words of that editor — “don’t care about a discount” won’t be rich for much longer.

But the owners of the landscaping company who reinvest their earnings into more shovels, more mulch and more advertising will do just fine.


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13 Responses to “Myth: The Rich Don’t Care About Money. Fact: You Won’t Believe This …”

  1. krantcents
    25. Jun, 2012 at 3:10 pm #

    I think you can find rich people in every category including not caring about money. Broad generalized statements are almost always wrong! The rich people I know watch their spending and find better ways to spend their money.

    • Afford Anything
      25. Jun, 2012 at 3:45 pm #

      @krantcents – As I see it, “rich” isn’t a permanent state. Its a daily practice. People who practice rich habits become rich, just as people who practice healthy habits become healthy (barring some massive calamity or misfortune). Conversely, the ones who squander their wealth will no longer be rich.

      Some things are permanent, like being a man/woman or being a certain race. But other things, like net worth, are changeable.

  2. CMonster
    25. Jun, 2012 at 3:22 pm #

    Perhaps you and your editor was talking about two different people, the rich and the wealthy. While they have accumulated money in common, their mindsets are usually different.

    • Afford Anything
      25. Jun, 2012 at 3:47 pm #

      @CMonster – Some people distinguish between rich/wealthy, but I use those terms interchangeably.

      • CMonster
        25. Jun, 2012 at 5:16 pm #

        OK, it may be considered semantics but there is a distention not only between how money is obtained and as your post points out, the perception by those who sees someone as being rich or wealthy. It seems to be based on the superficial with a lot of assumptions as to what lies beneath. I’m guessing that many of the misperceptions are created from media based ideologies.

        • Afford Anything
          26. Jun, 2012 at 3:21 pm #

          @CMonster — Oh, I understand what you mean! You’re absolutely right, the Hollywood image of “rich” is someone who spends extravagantly. One of my friends refers to this as “all flash and no cash.” :-)

  3. Christ
    26. Jun, 2012 at 5:29 pm #

    I believe “The Millionaire Next Door” explained it very well when he talks about under accumulators of wealth (UAW) and prodigious accumulator of wealth (PAW).

    • Afford Anything
      28. Jun, 2012 at 5:31 pm #

      @Chris – I agree, PAW + UAW was a great explanation. One of my favorite “scenes” in that book is when one under-accumulator of wealth sat in the same focus group as a bunch of prodigious accumulators … and all the PAW’s offered the UAW loads of advice.

  4. Buck Inspire
    27. Jun, 2012 at 2:10 am #

    Many folks like to trash rich people because they themselves aren’t there and are perhaps “hating” Hence, rich people waste money and “don’t care about discounts”. Awesome point about we’re ultimately responsible for growing our net worth!

    • Paula @ Afford Anything
      27. Jun, 2012 at 4:46 pm #

      That’s definitely true. Trashing the rich makes people feel okay about not the fact that they’re not rich themselves.

      In reality, people would be best off doing one of two things:

      #1: Either resolving to become rich, and admiring those who succeeded rather than trashing them, OR

      #2: Genuinely decide that wealth isn’t a priority, in which case there’s no bad-mouth the rich, because they don’t need to judge others in order to feel okay about themselves

  5. Evan
    17. Jul, 2012 at 4:30 pm #

    “The Real Housewives is just entertainment! It’s fiction!”

    Didn’t one recently go bankrupt? Its not all fiction their spending might be real but so are the results.

    I bet if you tried to get more info out of your boss, I can almost guarantee she is making a salary she isn’t happy with working at a job she isn’t too pumped about with a lot of class warfare issues

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