From Poor to Rich

I was on a familiar trip the other day to collect rent from tenants who have been late every month since moving in to one of my apartments. I’m a nice guy and often give them extra time to make their payments even deferring a portion of one month’s rent to the following month once. I’m not a pushover however and have had to charge them a late fee (although I’ve only done this once in two years).

As I was leaving the apartment check in hand, I commented to Mrs. Obscure that it’s sad that we make money by having people with less money give it to us. Then I thought that’s really how most transactions work. Sometimes I’m the one with less money giving it to someone with more. Examples I can think of would include my accountant, my doctor and my lawyer as well as every corporation I buy things from.

I can easily afford all of the things I buy (otherwise I wouldn’t buy them) but some people struggle to afford things, some that are necessities others that are discretionary. I’ve written about this in the past such as this post about what I call expectation inflation. Of course the opposite is true as well. There are plenty of very rich people paying doctors, lawyers, landscapers, etc. all who make less than the super wealthy do and when you think of it that’s the way it should be but most times it’s the other way around.

So if that’s just the way the world works what can we do about it? Well there’s no reason to waste money by giving it to someone who has more than you when other options are available. Do you really need that apartment or are there cheaper alternatives? Ok you want cable TV but do you really need all the pay channels, the on demand movies every night, and the sports package? Or can you get by with only a few of them?

Like everything related to personal finance it really comes down to a simple choice, a question we should always ask ourselves but rarely if ever do; do I really need this or do I just want it?

We can’t escape the truth that the rich often take from the poor (or less rich). Every time you go to a movie you’re giving your money to fabulously wealth actors and actresses. Going to a sporting event puts money in the pockets of overpaid players and bloated owners.

I’m a huge U2 fan and they often thank the audience for giving them such a good life and we certainly have given them a good life. I’ve spent thousands on them over the years but I got something in return. My tenants are the same way. They’ve given me quite a bit of money over the years but they’ve also gotten a nice place to live at a comparatively reasonable price.

I didn’t feel bad after thinking about it for a while. What’s lacking in this world, however, is the fairness that people should bring to these unfair transactions. I could get more rent if I chose but do I really need all that extra money? If baseball tickets were just a bit less money more people would go to more games and the players would still be filthy rich. If Wall Street would lower the commissions and fees maybe their star traders and analysts would only get a 5 million dollar bonus instead of a 10 million dollar bonus but thousands of people would get a much more fair deal. Hey, I’m a dreamer what can I say?