Can Someone and Rich on Paper and Still Struggle Financially?

[SUPERSAIAN]

I have seen situations where someone has a house, a good car and still running a business but yet the person still struggles to sort out everyday expenses.

There are plenty of people who look wealthy but are actually carrying huge amounts of debt and still running businesses. Isn't that what zombie companies are like? They look successful and financially healthy from the outside, but they're practically bankrupt on the inside.

I've known people who had well-established businesses and valuable assets but were still struggling badly to pay off their debts. Sometimes they borrow money just to keep their existing business running, or to expand it. Never forget that nothing lasts forever, not even wealth. Nothing in life is permanent or stable.

[Lucano]

Snip
This make me wonder whether we sometimes have the wrong idea about what being wealthy really means. Do you consider someone rich if they have valuable assets but struggle to meet up with their everyday expenses or do you think financial stability depend on how much money a person can readily access?

Financial stability is the true rich, true rich people will not always look flashy always dress simply and often they rarely talk and listen more, unlike people who are only able without definite financial stability, rich people are very cunning, always observing and they do not want many people to know about what they have. financial stability means that all needs have been met easily, if in an emergency rich people will not have difficulty in disbursing money

[Unknown Op]

~~~

This make me wonder whether we sometimes have the wrong idea about what being wealthy really means. Do you consider someone rich if they have valuable assets but struggle to meet up with their everyday expenses or do you think financial stability depend on how much money a person can readily access?

Being financially stable and being wealthy are two different things. Someone can struggle every day with their expenses despite having expensive properties, luxurious cars and businesses. Reason behind this is that, cash is not always available readily with the value of an asset. There are businesses that are worth the millions of dollar, but they are generating very less amount of profit or the profit that they are generating is quite inconsistent. I do not say that the person is not wealthy; still, these types of assets are contributing to the net worth of that person. The issue is having wealth without having any proper cash flow management system.
I think financial success is measured by how much someone owns and how comfortably they are maintaining their daily lifestyle. Having emergency fund, saving, income all are very much important. Being rich on paper is one thing, but having financial freedom is quite a different thing

[Crypto_Timothy]

This make me wonder whether we sometimes have the wrong idea about what being wealthy really means. Do you consider someone rich if they have valuable assets but struggle to meet up with their everyday expenses or do you think financial stability depend on how much money a person can readily access?

Its possible to have cars and houses and still calling someone to help fuel your car so you can use it for everyday run, i seen it happen often but obviously i think someone made a wrong decision somewhere or its the usual season. Cause i believe there is a season where someone has money and periods where you will be close to dry.
To me, for someone to be rich, it means the person has money and can provide for himself comfortably and for someone to be wealthy, that person must be so rich that even generations to come are already taken care of, thats who i would call a wealthy person.
And yes, thats why alot of person buy cars and fancy houses and wear fancy clothes, its so that people can easily associate wealth with them and thats what everybody wants, for people to see them and acknowledge them for what they have, but like i said personally, for you to be wealthy, you must have so much that even generations to come dont need to work and they are taken care off.

[uneng]

I have seen situations where someone has a house, a good car and still running a business but yet the person still struggles to sort out everyday expenses.

There are plenty of people who look wealthy but are actually carrying huge amounts of debt and still running businesses. Isn't that what zombie companies are like? They look successful and financially healthy from the outside, but they're practically bankrupt on the inside.

I've known people who had well-established businesses and valuable assets but were still struggling badly to pay off their debts. Sometimes they borrow money just to keep their existing business running, or to expand it. Never forget that nothing lasts forever, not even wealth. Nothing in life is permanent or stable.

It's actually a quite common thing. Those individuals look, but they aren't for real... There are empires built over debt and borrowed money. In the end, they may make huge profit, but it doesn't mean anything, since that income is being used to pay huge interest rates which have been accumulated along the years. And in order to pay a debt these entrepreneurs end making even higher debt. It's somehow similar to what governments are doing with countries.

Take USA as an example, a very rich country, but when you see how much debt they have, they aren't that rich for real...

[CryptopreneurBrainboss]

I have seen situations where someone has a house, a good car and still running a business but yet the person still struggles to sort out everyday expenses. From the outside you will probably assume that the person is doing very well financially but in real life the person is completely different.

Yes you can be wealthy so much but you don't have cashflow that generate money for your day to day expenses, some of the wealthy people have this problem of not having cash to spend that's why they go to bamks to borrow money whenever they want to make big purchases. They own assets but don't own cash, as a wealthy individual. you need things that'll give you cashflow so you don't depend on capital gains wherever you want to spend money. Capital gain are money you make when you sell your attest  completely but cashflow are money your assets gives you without you selling them, that's what you need as soon as you start making money and owning assets, know how to distribute your investment so you don't just be rich on paper.

[Bigjoe33]

I think we sometimes judge wealth by what people have without even considering how much money they have available. A person may have millions in properties and businesses but that doesn’t mean that they can easily get access to that money when they need it. Having valuable assets is a good thing but I don’t think it means that someone is financially comfortable. After all you can’t always sell part of your house or business just because you want to cover an unexpected expense.

If I have $1m, and I used it to acquire a building or something, which is not something like an investment and does not put money back into my pocket, does the money come back to me?, do I still have the $1m with me or in my account?, it's a clear No.

Some people appear wealthy physically, but in actual reality, they are not holding the kind of funds they appear to have. Not for deception per day, but they actually used it up and hoping money comes in in other ways soon. So, many times, we judge people wrongly, thinking they have when in real sense, they don't have immediately.

So yea, you could rich, very rich, but may not have it now. It happens sometimes.

[Abdulzuruku01]

Yes possessing only assets is not financial stability because there are some categories of people who struggle to gather valuable assets so that whenever the need for money arises, they will sell some to solve their problems and doing that always makes someone lose money by selling those assets below value, most especially if the buyer knows that you are in urgent need of money. Another negative effect of doing that is that it can cause you to fail to meet some of your urgent needs. But this is an exception for people who do business with valuable things like car dealers and land realtors.

[liasbaa]

You can call those who are unable to meet their daily expenses poor. But I don't understand how a person can't meet their basic needs despite having a house and a car. Maybe that person is stingy or he is running out of funds by paying bills every week. Or suddenly his source of income has stopped.
The rich are those who live a financially comfortable life who have a satisfactory source of income. People who can meet the basic needs of their family and have a house can also be called rich.

There are many examples of a stingy person who has a lot of money but does not spend it on his family, I would say they are not rich. They are even poorer than other real poor people. Just like having available funds does not help a stingy person and even if he has no money, his financial situation is the same because he is still psychologically poor.

[Rockstarguy]

I have seen situations where someone has a house, a good car and still running a business but yet the person still struggles to sort out everyday expenses. From the outside you will probably assume that the person is doing very well financially but in real life the person is completely different.

Having all this doesn't mean you have arrived in life and no longer need money. Owning a house is a good achievement, as you don't need to pay rent anymore, but you still need money to maintain the house.

 The same applies to having a car; you need money to maintain and fuel it. For someone who has acquired all these things, you may even need more money because, in a situation where there is no money, you cannot maintain or enjoy them. The mistake some people make after acquiring properties for themselves is that they reduce the effort they put into hustling for money. However, houses and cars are responsibilities that one needs to take very seriously.

[viljy]

There’s a related topic on the board about boasting about wealth. Well, such people really do exist. For example, there’s an expensive car parked right outside his window, but he’s sitting by the window, eating the cheapest instant noodles with liver sausage (which would make even a stray dog feel sick) and looking at his car through the window. It was bought on credit, straining all his strength and financial capabilities, just to impress others (basically strangers).

Another situation is if a person owns, say, real estate, a house. He can’t sell it because he needs a place to live. He also can’t sell other properties quickly, or at a good price. In other words, a person may experience financial difficulties even if they’re by no means poor. But you can’t call them rich either. A truly wealthy person doesn’t experience financial problems.

[Thewatchman]

-snip-
This make me wonder whether we sometimes have the wrong idea about what being wealthy really means. Do you consider someone rich if they have valuable assets but struggle to meet up with their everyday expenses or do you think financial stability depend on how much money a person can readily access?

How can you be sure they are struggling? The fact is, wealthy people can do whatever they choose, including extremely restricting themselves from unnecessary spending. All they have to do is keep the majority of their portfolio in illiquid assets.

I think the idea that the wealthy struggle to make ends meet is an overly dramatized narrative.

Yes you can be rich and still struggle as a human if you cannot learn how to protect and control your resources. If you find it difficult to access several needs you have to learn the ability to save your money and also make your money works for you in this case you can multiply your source of income which is very primal to how much you can make as a person.
 Being rich is a skill but staying out of the financial struggle you definitely need a system that one can rely on so as to generate daily and also not withstanding the effects it might cause. Generating several sources of income is very good when you are rich because it protects one from unforeseen circumstances that might arise if we fail to control our money or resources.

[Uhwuchukwu53]

Different scenarios is responsible, today many don't believe in stocking or staking money but investment using shares, one can have different shares asset but find it hard to have physical cash, another aspect is investment the money in what brings back return to keep money or cash stable in your hand, there are some investment that the investor hardly hard good return despite people around around may consider him wealthy but the return never match or make him financial stable where such investor is capable of having some cash flow. The other aspects is the management strategies, this is the problem of some though are rich in paper but when it comes to physical management of the cash around them is hard leading to such situations.

[YOSHIE]

I have seen situations where someone has a house, a good car and still running a business but yet the person still struggles to sort out everyday expenses. From the outside you will probably assume that the person is doing very well financially but in real life the person is completely different.

Don't look at someone's economy in terms of their house, car, business, they have all of that, physically you can see that the person is well established in the economic sector, if you look at it from the outside.

But you will be surprised if you enter into their lives.
1. Credit car.
2. Home credit.
3. The business they run capital from banks/credit.
4. Cellphones, laptops that they have on credit.
5. and so on unexpected expenses.

Monthly expenses are almost hundreds of dollars, while income from their business can only cover their home and car loans.
It is very normal and reasonable for such people to experience financial difficulties.

I'm talking about facts, many people like that live in the area where I live, they look luxurious but their brains are all rubbish.

[Shadiq]

Yes, there are many people who have luxurious cars and houses. But in reality, they struggle to meet their daily expenses. There are two types of such people, one type of people are those who run their cars, houses and businesses on loans. Most of the money they earn from the business is used up in paying off the loans and maintenance. They struggle to meet their daily expenses with the remaining money.

There is another type of people who are developing. They have cars and houses, but they are still investing in their development. In this case, a person may face a shortage, it is not a long-term or permanent shortage, but a temporary shortage that can be resolved within a few days.

Having a good source of income, cars, houses, businesses and a luxurious life does not mean that they have a lot of money. Having wealth and having money are not the same thing. From my point of view, the definition of rich is - a rich person is a person who has enough valuable assets, has enough cash to manage real life and has a huge savings fund as a future plan.

[Fortify]

I have seen situations where someone has a house, a good car and still running a business but yet the person still struggles to sort out everyday expenses. From the outside you will probably assume that the person is doing very well financially but in real life the person is completely different.

This make me wonder whether we sometimes have the wrong idea about what being wealthy really means. Do you consider someone rich if they have valuable assets but struggle to meet up with their everyday expenses or do you think financial stability depend on how much money a person can readily access?

I've actually heard this from many people who I'd consider to be in high paying jobs - that they are quite bad at managing money or have not even figured out what you might consider the basics of finance. They may earn a lot but due to poor practices they also leak a lot of unnecessary cash, like keeping a balance on a credit card with a high rate or overspending on their regular month to month. That's ignoring the ones who have picked up a bad habit like gambling or lose money because they swap to a brand new car every couple years. Just because you earn a lot of money does not automatically make you financially savvy and being overconfident that they know more than most is actually a dangerous mentality. Those who inherit money or have it flow to them without earning it are even more vulnerable, because they will spend without understanding how hard it is to accrue.

[Taricoins]

I have seen many examples and incidents where people are financially very strong but do not have cash in hand.I think this is not a big deal because there can be many reasons for this such as having a lot of land but not receiving any cash from it, so despite having a big asset they face financial difficulties.Having a big business but the profit from this business is very low. This can also be a part of financial difficulties.Monthly income is good but due to increasing daily expenses, this income is also feeling low.This means that instead of empty land a house or a big business create assets that give you financial freedom and save you from problems.

Another major reason some people would not want to liquidate their assets is that they don't want to pay the tax that goes with the operation, we see alot of wealthy and rich men buy out a company whilst using their shares as collateral. This phenomenon makes some people blinded that that individual is just showing and doesn't have money but to them, wealth emanates from having assets

[Joeboy]

I have seen situations where someone has a house, a good car and still running a business but yet the person still struggles to sort out everyday expenses. From the outside you will probably assume that the person is doing very well financially but in real life the person is completely different.

I think we sometimes judge wealth by what people have without even considering how much money they have available. A person may have millions in properties and businesses but that doesn’t mean that they can easily get access to that money when they need it. Having valuable assets is a good thing but I don’t think it means that someone is financially comfortable. After all you can’t always sell part of your house or business just because you want to cover an unexpected expense.

This make me wonder whether we sometimes have the wrong idea about what being wealthy really means. Do you consider someone rich if they have valuable assets but struggle to meet up with their everyday expenses or do you think financial stability depend on how much money a person can readily access?

Most celebrities goes through this ordeal...Seeing this very topic reminded me of of like 2 or 3 celebrities who were victims of this which I wouldn't mention their names since most of us especially the Nigeria folks are already aware of these people that I am talking about...Normally we all think that some of this our celebrities are financially okay. Considering the fleet of cars, popularity, connections and whatnot... But unknown to us, so many of them are not financially sound as we imagined them...Coz if they were, they wouldn't have to start soliciting for assistance or help in sorting out there medical bill..Pulling from their bank account or even making a few calls would have brought out the needed funds for that medical bill...This is why I think that we shouldn't always have to judge a person financial capacity by the level of material assets that they have..Better still, their wealth should be judged by the numbers and sizes of investments...Since investment has a way of doubling or even tripping ones existing wealth..

[Hamza2424]

Rich people don't use their money. They use their assets as collateral to take loans to save their money from taxation, and you know, the money they took they can use as they want. So basically, they are using their assets, properties, etc., as collateral.

They know all the ways that we don't because they have expensive accountants who save them millions of dollars that they would be paying to the government anyway.

Having liquid money does not mean a rich person will now be carrying cash around. He will be driving a Mercedes or a Ferrari, but you won't find a single piece of cash on him. But that won't mean he's not rich. Their way of spending money and utilizing it, is way different.