I don’t think you can tell without looking into their finances. For some, a big house and a couple of new cars signal wealth, but to me, they’re more likely signs of debt and poor financial judgment.
Personally, I live in a small, 75-year-old house, drive a 17-year-old pickup truck, and walk around in old clothes that were never in fashion to begin with. Yet I know for certain that my financial situation is far better than that of the average person in my country. You’d never be able to gauge my true wealth from my appearance or spending habits.
May I ask what you spend your money on that nobody notices?
In my experience the mix out of everything gives me a feeling on how much they have. A big indicator usually are vacations. If you have money to burn to go on a expensive vacation you probably don’t have money problems.
OP already replied, but the answer was super brief: they invest in their future. I don’t know what that looks like for them, but for us it means funding an emergency fund plus 401ks, IRAs, and college funds for our kids. Even if you’re not able to set aside a ton, the more money you can invest when you’re young the better off you’ll be thanks to the power of compounding.
If you’re lucky enough to advance your career put the extra money into your emergency fund and/or investments - you won’t miss it.
If you’re in debt, try to target one loan to pay off. Once you pay off that single loan keep paying that amount towards your next loan. Repeat until necessary. For example, after we paid off our car we put what used to be our old payment as extra $$ for our mortgage.
I don’t think you can tell without looking into their finances. For some, a big house and a couple of new cars signal wealth, but to me, they’re more likely signs of debt and poor financial judgment.
Personally, I live in a small, 75-year-old house, drive a 17-year-old pickup truck, and walk around in old clothes that were never in fashion to begin with. Yet I know for certain that my financial situation is far better than that of the average person in my country. You’d never be able to gauge my true wealth from my appearance or spending habits.
This is exactly it. If you can avoid the temptation to spend more when your fortunes rise, it makes a big difference in your finances.
May I ask what you spend your money on that nobody notices?
In my experience the mix out of everything gives me a feeling on how much they have. A big indicator usually are vacations. If you have money to burn to go on a expensive vacation you probably don’t have money problems.
OP already replied, but the answer was super brief: they invest in their future. I don’t know what that looks like for them, but for us it means funding an emergency fund plus 401ks, IRAs, and college funds for our kids. Even if you’re not able to set aside a ton, the more money you can invest when you’re young the better off you’ll be thanks to the power of compounding.
If you’re lucky enough to advance your career put the extra money into your emergency fund and/or investments - you won’t miss it.
If you’re in debt, try to target one loan to pay off. Once you pay off that single loan keep paying that amount towards your next loan. Repeat until necessary. For example, after we paid off our car we put what used to be our old payment as extra $$ for our mortgage.