If I get a $2K raise and my rich neighbor gets a $10K raise am I worse off?

Question

And should I prefer a situation in which I get no raise and my neighbor LOSES money, simply because I hate him because he's richer than I am?

http://www.nytimes.com/specials/downsize/21cox.html
http://www.bls.gov/opub/mlr/1988/05/art1full.pdf
http://www.frbsf.org/econrsrch/wklyltr/el97-07.html#winners
http://www.dallasfed.org/fed/annual/1999p/ar95.html
http://money.cnn.com/2005/05/25/pf/record_millionaires/index.htm?cnn=yes
http://money.cnn.com/2005/09/28/news/economy/millionaire_survey/index.htm?cnn=yes
http://money.cnn.com/2006/03/28/news/economy/millionaires/?cnn=yes
http://www.heritage.org/Research/Labor/bg1773.cfm
http://www.msnbc.msn.com/id/6214022/site/newsweek/

Gee alphabet soup it turns out my metaphor is right on.

Foxhound I agree that that debt-ridden neighbor way to do it is just the wrong way to do it.

But it's a gross overstatement on the part of these Lefties to suggest that every McMansion built in the 1980s and 1990s was funded with cheap money, with ARMs, and that they're ALL going to go bankrupt.

Even if it got to the point where it was 3-4% of them, that still leaves 96-97% of them who were and are just plain better off than they had been a generation ago or would be if we'd continued the economic policies of a generation ago.

Answer 1

No, your no worse off. Hopefully it is a good sign that upward mobility is possible..............

Answer 2

I liked the answer about not basing your wealth on a neighbor. Its a you thing.

Think of this though. I have a neighbor whose wife and he always have to have the newest car. They always have to be taking the grandest trips. The wife is always shopping, etc. etc. It like where you see people who have to buy a McMansion in order to keep up appearances. But they are mortaged out of the butt, owe everybody, have credit debt and are paying interest on everything.

Back to my neighbor and I. I have a nice house, have nice stuff and take trips and all. But if you stood outside of our houses you would probably assume I make less. I drive a 95 Acura even though I could easily buy pretty much any car I want. Here's the thing.... I make about TWICE what my neighbor makes. My wife alone makes more than this guy. But you wouldn't know it though.

This is because long ago we realized that when you get a $10,000 raise it seems like an excuse to spend more. When it was a $2000 dollar raise it is the same. We have for a long time packed away cash and it has grown. Plus taxes are another thing. We put a high percentage in 401Ks and such.

So you are better off in a way with $2000 in some ways..... if you put it away. Point is often those appear wealthy are often not. What counts is what you have later and then you can have fun..... bigtime.

Answer 3

Assuming that the cost of living and the prices of essential goods and services increase by no more than $2k, your standard of living stays the same. You lose if you can afford to buy less than you had before, regardless of how well your neighbor is doing.

Answer 4

No you are not worse off. You have bettered your income and so has he. You are not in a contest with anyone and should be happy for what YOU have achieved.

I have a very rich neighbor and she is my best friend. I am very happy for her, and do not base my happiness on her family's income. (But truthfully, we are not so far behind them that it is THAT noticeable).

Answer 5

Congratulations on your $2k raise! Keep applying yourself and your possibilities are limitless!

Answer 6

You will always be poorer if you base your wealth on that of your neighbor.

Answer 7

Thou shalt not covet.

Answer 8

Um, not a very snappy metaphor, sorry.