Rich People Live Paycheck to Paycheck Too?Kathleen Celmins
It seems ridiculous, but it’s true. Rich people live paycheck to paycheck. This study, done by professors at Princeton and NYU, shows that there are high-income earners who are living paycheck to paycheck. They call them the “wealthy hand-to mouth.”
I imagine it’s pretty easy to do. Think about it. As you start earning more, you start looking around for things to upgrade. Your friends might be earning at the same pace you are. Promotions come with increased desire. Your car starts to look dingy, when it was perfectly acceptable before.
You start to run in fancier circles, where you learn about private schools. You’re invited over to someone’s house for dinner and marvel at the lavishness of their home. Suddenly, your own home looks a little too modest.
Then, before you know it, you’re spending everything you’re bringing home. Each month you see all your money go out the door, and you know one thing for sure: you’re living paycheck to paycheck.
Now, of course it’s not like it was when you were just out of college. Back then, you knew how to make spaghetti last four days. This time it’s different.
And this time, it’s worse.
There’s a term for people like you: HENRYs: High Earners Not Rich Yet. Instead of keeping your lifestyle the same as its always been and saving money, HENRYs accumulate stuff in order to outpace the Joneses.
Are You a HENRY? Look for These Signs
You’ve upgraded your car recently. And not because your old car broke down, because you wanted something newer and better.
You bring home a lot of money. But you still know the exact date of your next paycheck because you’re worried you won’t be able to pay all your bills that are due before payday.
If you lost your job, you would miss a payment. You’re close to the edge, and your high-powered, high salary job is necessary for your survival this month and next.
Your net worth hasn’t risen proportionally to your pay increases. A high salary means nothing if your net worth doesn’t increase.
Don’t be one of the people who earn plenty and still live paycheck to paycheck. Live more modestly, save for tomorrow, and enjoy the simple things that come your way.
You’ll find that the simple things were all that mattered in the first place.
Image by Penywise