Are you rich just because you are debt free?

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Do you want to know how to be famous around people you know? Tell them you are debt free and have no mortgage to pay and you’ve just become the rich person you never knew you were.

I know it’s crazy but it’s the way some minds run because they believe money makes the world go around.

Not everyone thinks that way but I’m afraid there are people who do. They want to know how to be rich like they ‘think’ you are (even though you might not be) so they too can live a stress free life sipping margaritas on the beach in Hawaii.

Life is not that simple though I’m afraid and one of the worst things you can do in my opinion is to go around and tell people you are debt free and have nothing to pay for except for every day bills. We only share that on the blog to show others what we have done in order to motivate others who want to become debt free but we don’t talk about it in our personal life to anyone.

Telling anyone who will listen about your financial history is certainly not going to get you on the rich list in Canada but it could make others want to take advantage of the fact that you have no debt. Pity really, but that’s the way some people think, even if they don’t say it they might make you feel obligated to pay more because they think you can afford it.

They’re rich are two words we hear often when neighbours gossip on our street about who they know in the neighbourhood. Trust no-one lol. I was having a conversation with a co-worker last week and the subject of paying the mortgage and bills came up after we talked about getting our annual raise at work. I didn’t bring up the conversation, I was listening first.

We were chatting about how the prices of everything was going up but our income was certainly not keeping pace. That’s not surprising but for some people it depends on what they own and how much they owe on it.

I agree with him though, because every time we turn around some service is going up and let’s not forget the price of gas and groceries. It’s never-ending but it was what he said to me which was surprising.

He said, “Anyone who can pay off their mortgage early must be rich” and my jaw dropped as I turned my head. Of course I didn’t tell him we had just paid our mortgage off as that would have turned into a conversation I’d rather not have but it was the “must be rich” part. We’re not rich, at least we don’t think so. Far from it.

Just because you don’t have any debt doesn’t mean you stop tracking your finances because the moment you do that you might just find yourself falling off track especially if you set a new financial milestone for yourself.


You must be rich


Another incident was at the garden centre of a popular big box store where after we checked out I noticed a potato vine multi-pack that I wanted for our hanging baskets. I had to get the vehicle to load up with all the annuals, shrubs and bags of mulch we bought and asked my wife if she could pay.

She was already holding her PC Black MasterCard (not sure if that is what warranted the silly comment) but the cashier said don’t worry she’s a millionaire she can afford it. The credit card from what we were told gives you more points and is offered to customers who earn 100k or more annually. Not a big deal really as many credit cards have lots of perks and a credit DOES NOT mean you are rich. In fact it could mean the opposite, drowning in debt.

My wife ignored that comment but jokingly said, “well I haven’t checked our Lotto Max tickets in a few weeks” and she still hasn’t. If you don’t hear from me ever again you know where I am… on the beach far away.

I’m just not sure why she would assume something when she doesn’t know us. It also reminded me about that post I wrote a few months about whether customer service was affected by the clothes you wear. I’m now positive there is more to that story than just clothes.

It’s that mindset or something she saw that made her think that we had money. Sad that people put others on a pedestal like that when they could be putting all that energy into making their world a happier place financially.

Most people seem to be wired to believe that money solves all of life’s problems so if someone has lots of it they must be smart and they must know what they are doing.

Unfortunately that’s not always the case and a bit more to bring you down, just because you have no debt doesn’t mean you can afford to jet off and blow money left, right and centre. Living a rich life in love, peace and with those you cherish is more important than becoming rich in my books.

I don’t even know what rich means. Does rich mean you have over 1 million dollars in cash, net worth or is it less than that. Who knows but everyone depending on where they are financially and how they were raised view being rich different. Someone we know thinks we are rich just because of the house we live in and the neighbourhood.

They couldn’t be more wrong but it’s these assumptions that people have that set them back from achieving what they want to in life. They plague their mind with what they think they know when they might know nothing at all.

Unless you have the financial records of someone in front of you, then you don’t know anything. Even then what rich is to you may not necessarily be rich to the person you are deeming rich.

I’m not even sure being rich is all it’s cracked up to be anyways. Sure you get the perks of doing things that others might not be able to afford but all you do is up your lifestyle up a notch or ten. Many rich people don’t even think they are rich with millions of dollars for this reason.

The being rich mindset is never-ending for many although I’m sure once you hit a billion dollars it’s hard to deny that you are rich. That is provided you aren’t in debt a billion dollars either. Ah, see you never know. Credit can buy you anything and if you get in over your head you could owe more than you care to or owe more than you can ever pay back.


The desire to be rich


If there is one thing I’ve learned it’s that whatever rich means to you learning how to be rich means not to fall for the get rich quick schemes out there. There are none that will make you an overnight success and if there were we’d have more rich people in this world than we could count.

The sad part is that people continue to fall for these get rich schemes and believe that money will fall into their laps. It’s that mindset I spoke about earlier and if someone tells you this is what they did and you can do it to chances are slim to none that you will become rich.

When I wrote the post about us becoming mortgage free in 5 years I said it wasn’t easy because I don’t want my fans to read my post and say they are going to pay their mortgage off just as fast.

It took years of saving, living frugal and making money buying and selling houses from a young age. How you get to reaching your goals is up to you but the point of that post was to say that you can achieve your goals if you have a plan, budget your money and don’t give up even in the face of set-backs.

Whatever time-frame you give yourselves is up to you but don’t try to meet or beat others goals because you will only fail. Setting yourself up for failure means that you may give up on what could be life changing so worry about what you are doing and not others. I often take things with a grain of salt that I read online only because I know it is mainly personal opinions and not professional advice.


How to get rich


Believe in yourself and hard work. There’s no easy way to get rich besides winning the lottery and we all know that’s near impossible to do.

The only way to get rich is to invent something that everyone needs or to save your money, invest money wisely, run a successful business or inherit the money. One other way I can think of is by participate in illegal activities that might get you thrown in jail but make you rich in the process. I don’t recommend that because life is worth so much more than having money and wasting away in a jail cell for stupidity.

Now that we are mortgage free I know that people may think we are good to go for the rest of our lives. Sure we don’t have debt now or a mortgage but there are other areas we haven’t finished yet. We still have no children and our house is in the middle of renovations plus we still have monthly bills to pay.

Let’s not forget that we both have some catching up to do with retirement savings and what was extra money each month from not having a mortgage becomes spent and real fast. Sure not having any debt opens up doors and we are lucky to have worked so hard to make this happen but it certainly doesn’t mean that we are any better than the next couple.

I know that if we were to tell people we have no debt or mortgage that they may think that we can afford to hold lavish backyard BBQ’s in the summer, pay more for group gatherings, donate more money etc. The fact of the matter here is as described above, what one person views as rich doesn’t necessarily mean they are right.

Paying off your mortgage with no debt in your name is not a ticket to blow money. Sure you can splurge a bit you deserve it but that still requires budgeting in our books.

Remember, as fast as you saved the money you can spend it just as fast, if not faster. That’s why you see so many rich and famous people claim bankruptcy. They think they have money to burn and some do but many forget to live in a realistic financial manner which ends in losing everything.

So, young and rich is not what we are, rather we are in love and that’s worth more than its weight in gold.

What does being rich financially mean to you?

Do you assume people have money by the car they drive, house they live in, what they wear or what’s in their wallet?


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  1. Great post Mr. CBB! Well, I am debt-free but I am not “yet” rich. I’m still working on it though. 🙂

  2. I can consider Debt Free as a stress free life. You just need to earn money for your own good without worrying about paying debt money to anyone.

  3. It’s funny how people perceive your situation. In my family, I’m perceived as being rich because I travel a lot. But what they don’t know is that I’m very frugal and don’t spend much so that I CAN travel and splurge on trips! It’s just different priorities. I guess if they knew that I no longer have a mortgage, they’d think I’m a millionnaire! ha!

    1. Oh, I agree Isabelle. People sometimes relate their situation to what they think they know of yours and magically theories come to life lol.

  4. Thank you for the great post! Other than the house which we are aggressively paying off, we have nothing financed (so no money wasted on interest). I was whining to my mom the other day about how things are just getting more and more expensive and the pay isn’t getting better. I was complaining how every month is getting tighter and harder to get ahead… She says “how much do you owe?” I was horrified! When I told her we just had the house it was her turn to be shocked. Her and her husband make good money with excellent benefits and their minimum payments on their cards are enough to make me choke with sheer terror! My husband and I have both felt that there is precious little money and no guarantees, why gamble with future income plus interest? I am thankful we agree about money. If we can’t pay for it now, then we save up. The emergency fund is for EMERGENCIES only – like when the hot water tank burst. And we repay that fund before we put anything in the planned spending fund. Paying ourselves first is vital to our sanity… It’s about the same percentage of our income that my sister (for example) spends on credit card payments. By not spending before we earn it, there is more flexibility. I am self employed so lean months are frugal, and good months boost the savings. By not having debt payments there is no panic about interest accumulating. I am a control freak when it comes to my money… Not rich though, definitely not rich. Perhaps one day.

    1. You both sound like Mrs. CBB and I. If we don’t have the cash, we save it and it’s another reason why we have our projected expenses built into our monthly budget. It helps so much to save money for projects or bills you know you have to pay at some point in time during the year.

  5. I’ve heard far too many horror stories of people paying down a major debt (such as a mortgage) or becoming completely debt free only to forget about all the hard work and progress they made, and find themselves in major debt again within a few years. I can understand why people make the assumption that being debt free means you’re rich, but like you said, there’s a whole lot more to this than meets the eye. It’s somewhat surprising that the cashier made that comment – but you’re wife handled it very well.

    1. Yes, that is true. It’s like someone winning the lottery and blowing every last penny thinking there will be more growing in the back garden on the trees lol.

  6. I’m increasingly finding as I (finally!) “grow up” that those friends of mine who appear “rich” most certainly aren’t. They’re normally leveraged up to the hilt. The friend with 3 cars in his drive and the biggest house of anyone I know is actually close to foreclosing in his property because he can’t keep up with the payments. But if you didn’t know this you’d assume he was very wealthy indeed.

    On the flip side, I know someone who works for not much more than minimum wage, in a very manual job. Most people in his shoes would be living paycheck to check (or worse). He certainly doesn’t flash the cash and is always looking for a bargain. However he recently revealed just how much he had in savings and while I won’t go into figures – let me just say that I was both surprised and impressed!

    1. That’s what I said to my wife… people are mortgaged to the hilt and they are struggling BUT they have the big house and fancy cars to show off until they can’t do it any more and have to sell or lose everything. I’d rather not have anything than have too much when in my heart I know that losing everything didn’t have to happen.

  7. Just like Laurie, people really assumed that we are rich because our house is very noticeable from all the houses in our place. We are living in a big house in a wide lot, but honestly, we don’t have much savings, BUT luckily we are living a debt free life. Right now, we are still building a solid foundation for our emergency and savings fund.

  8. Rich… my experience has been that the truly rich folks of the world don’t look like they are rich to the onlooker. How they stay rich is by quietly continuing to amass their fortune… day after day and $ after $. There are a few that have garnered their fortune via a windfall, but most rich people have worked extremely hard, taught their children well about finances and had several generations adding to the pot of gold. The goal is to leave the family wealth in a better situation with each passing generation. The goal has become to have the first generation’s “New Money” accumulate, grow be added to, not squander or waste and one day down the road it will become “Old Money”. 🙂

    1. How true is that Mary. You are right… the rich people you won’t even know they are rich although some are flashy not all of them are. Good points

  9. “What does being rich financially mean to you?” Getting to the point where your money (investments) makes more for you in a year than you make for yourself (at work) in a year. By that metric we are not rich…even though we’ve paid off our mortgage early.

  10. Mr. CBB, great post. When we lived in suburbia in our fancy house, many people assumed we were rich but we were drowning in debt living paycheck-to-paycheck. Now that we have acreage, even though we have a plain 125 year old house, people think the same. We make less than LOTS of our family members and friends, but we have chosen to give up so many things, like going out to eat, cable TV, etc. and yet some people are jealous and mean that we are getting out of debt, saying how it must be rough to be in a place we where our debt numbers are going down instead of up!!! Then they talk about their excursions at sit-down restaurants and nights out on the town.

    1. Amazing how people assume however again what rich is to one person is different to another. Thanks for dropping by Laurie!! Mr.CBB

    2. You know Laurie some people will never get it and just don’t understand what you are giving up to get ahead. In the end it’s your finances that matter most so keep on doing what you are doing.

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