a change I didn’t expect


When you move from New Jersey to Florida, you’d expect a few changes:  better weather, a reduced variety of food choices and a lot less traffic. What I found to my surprise, in my first week, has nothing to do with the geographical change, though.  I could have found the same difference if I had moved from one neighborhood to another almost anywhere, given the right conditions.

I was living in a townhouse community in Jersey. Almost everyone there that I knew worked in finance or IT on Wall Street or some offshoot.  A few people worked in health care (some nurses, some pharmaceutical salesmen), but the overwhelming majority of my neighbors were employees of big multinationals.  The community wasn’t filled with insanely rich people by any means – but it was filled with a lot of well-to-do upper middle class types.

The community I live in now is a bit different. First of all, it’s standalone homes, not townhouses.  It’s an old community and not a new development built by a mega-construction firm.  A golf course runs through it, and it’s a 10-minute bike to the beach.  I’ve been to the beach three times in the last week, equaling my total for the last five years.  The houses are large and expensive.

I attended a neighborhood party and I was struck by something that might not have been obvious to me before I started thinking so much about wealthbuilding:  every family had at least one business owner (i.e. someone who was not an employee) as the apparent “big” breadwinner.  The types of businesses were different – they ranged from blue-collar business owners to high-end luxury service provider business owners – but none of them were employees. Not one.

You can’t draw much of a lesson from a guy who’s making observations about his neighbors in two different locations – it’s not a wide sample – but it’s still an interesting mix. When the crisis hit, my neighborhood in Jersey was hit hard.  Many of my neighbors were laid off, or, like me, saw their lucrative consulting gigs dry up.  Even before the crisis, many of us were over-leveraged and had bought the best house we could have with a northeastern middle manager’s salary.

I’m not trying to say that the business owners aren’t suffering, too. House prices fell, and the business owners’ businesses have suffered.  But they were better off before (I assume that, since they had bigger, nicer houses, etc.)  and – to my brief observation – they certainly seem much better prepared to weather the crisis than the ex-employees do.  I may be way off – everyone may just be in debt up to their ears.  It doesn’t seem like that’s the case, though, and I am impressed, once again, that you can be comfortable as an employee – but it’s unlikely you’ll ever be rich.