Rich/Poor mindset

help999

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Moderator's note: This is nonsense from a UK website

Hi, i am wondering how some people can drive big top of the range cars and Jeeps mainly bmw Jag Audi etc. Brand new ones. I did some research and found that if you have a business you can offset that big top of the range car against tax on the annual return. Poor people well not so much poor but middle income either take it out ok finance or part payment of cash, where people who i consider to be rich are more financially educated they know how to grow wealth where as poor people lose it or dont build on it.
I have heard of cases where people with multiple houses on the books incorporate them as part of a business and pay less tax. Rich people know how to avoid tax and amass wealth poor people dont. Is being rich a case of being educated?
 
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Steven Barrett

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As someone who talks to people about their money for a living, I can tell you don't believe in everything that you see. Some people spend all their money on possessions and don't have any savings. So people think they are rich when they are not, they just give the otherward projection that they are. Cars are the easiest way to do this as you can get finance for an expensive car pretty easily and get a new one every 3 years on PCP i.e. you are renting your car.

there are plenty of other people who are extremely wealthy but you would never know. Why? Because they don't broadcast their wealth by having expensive possessions. They save their money instead and no one else can see this. But when they come to their late 50's, they have amassed a lot of wealth and can choose to stop working, cut back, help their kids out financially. Whatever they want because they are wealthy.

Meanwhile, the person who spends every penny still hasn't saved anything and has to continue working because they don't have a choice. So while the frugal person is spending 6 months in Asia and Australia as a 60th birthday present, the other person is wondering where they got the money to be able to do that!

We do not know what other people's financial situations are so don't try to guess. Concentrate on your own. Don't take on too much debt. Save for your retirement. Spend less than you earn and invest the rest. Have the correct structures and habits in place and you'll do alright.


Steven
www.bluewaterfp.ie
 

galway_blow_in

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it varies , people from an urban backround are more likely to immerse themselves in displays of wealth ,rural farmers are often quite wealthy but go around dressed what might be viewed as poor , they are also masters at " talking poor " , same farmes might have a few million euro worth of land
 

Brendan Burgess

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Is being rich a case of being educated?

Education is part of it, but being smart and thinking through things is important.

For example, they don't borrow money to put it on deposit at 0%!

 

Introuble83

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I think mindset is certainly an issue . I have relatives who have substantial savings but never spend anything because they have programmed themselves to save so much, there money serves them little value . Like above I have friends who drive 75k cars but have no savings . Each to there own .
 

joe sod

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it varies , people from an urban backround are more likely to immerse themselves in displays of wealth ,rural farmers are often quite wealthy but go around dressed what might be viewed as poor , they are also masters at " talking poor " , same farmes might have a few million euro worth of land
That's more to do with the rural mindset though and the attachment to land. They don't own the land but are slaves to it in many cases, the land owns them.

John B Keane's "The Field " is as relevant today as it was in the 1950s in delving into that whole mindset
 

Steven Barrett

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Then you have the cost of failure. People from medium/ upper class have a safety net that poorer people don't have.

Look at Donald Trump and his businesses. He took big risks on so many ventures that others wouldn't make because of the risks involved. If they went wrong, his dad bailed him out. If they worked, he made massive gains and was called a business genius.

Other people just simply can't take those risks as it would bankrupt them and they wouldn't come back from it.
 

Blackrock1

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it varies , people from an urban backround are more likely to immerse themselves in displays of wealth ,rural farmers are often quite wealthy but go around dressed what might be viewed as poor , they are also masters at " talking poor " , same farmes might have a few million euro worth of land
a few million euro worth of land that you arent prepared to sell to realise that gain may not make your rich, it depends on what you can earn off it, there are more income poor farmers than income rich ones thats for sure.
 

T McGibney

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a few million euro worth of land that you arent prepared to sell to realise that gain may not make your rich, it depends on what you can earn off it, there are more income poor farmers than income rich ones thats for sure.
Selling a few million euro worth of land won't make you rich if it means sacrificing your future livelihood.
 

Paul O Mahoney

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Personal Balance Sheet is the measure of your wealth. There was a book " Habits of a Millionaire ", probably wrong title, but the Author studied people who were by there balance sheets wealthy.

But on visiting them he found that they employed "thrift " to everything but also knew the difference of value and cost and they had low/no debt

Most were still cutting " coupons " from the local newspaper or other publications, obviously a US study.

Book was "Millionaires Mind"
 

T McGibney

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Would a few million euro not be akin to having a over a long period of time ?
Would it? For someone under 55, a €2m sale of land would equate to circa €1.5m-€1.7m after CGT. If average life expectancy at age 52 is say 87, they have 35 years left and their main asset and source of income is gone. €42k-€48k p/a ain't exactly the equivalent of large salary especially when inflation is counted.
 

joe sod

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I think you're ignoring the 'few million euro' bit that the farmer selling will make.
in general though they don't sell it, land on average is only transacted every 400 years in Ireland thats the main reason why it always has a high monetary value. I heard of a case where a farmer's son inherited a huge farm that had been built up over generations, he then sold the farm for a few million euros, the father later shot himself. So its not that simple realizing those paper millions that you may in theory "own". There are loads of stories like that not to mention the recent murder suicide cases over land inheritances in Cork
 

Pinoy adventure

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Would it? For someone under 55, a €2m sale of land would equate to circa €1.5m-€1.7m after CGT. If average life expectancy at age 52 is say 87, they have 35 years left and their main asset and source of income is gone. €42k-€48k p/a ain't exactly the equivalent of large salary especially when inflation is counted.
T - some might just look at the €2m figure and not even think of the small yearly amount of €42-48k p/a until the €2m is gone.then realise they bought or spent a load of nothing.
 
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