'Being broke is a mindset': New York man says he's $100,000 in debt, but buys Gucci clothes and books expensive vacations.  Is he wrong or would Dave Ramsey agree with him?

‘Being broke is a mindset’: New York man says he’s $100,000 in debt, but buys Gucci clothes and books expensive vacations. Is he wrong or would Dave Ramsey agree with him?

You may think that your “rich” or “poor” status is based on your bank account. But according to one New York man, those numbers mean nothing.

Big Apple musician Jean-Luc explains how he came to this conclusion in a recent episode of Subway Takes, a one-minute talk show on TikTok that takes place on a New York City subway. Host Kareem Rahma begins each episode by asking his guests the same question: What is his opinion?

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“Being broke is a way of thinking,” says Jean-Luc. “If more people didn’t think they were bankrupt, they wouldn’t be bankrupt.”

Rahma agrees with his opinion. But soon after, Jean-Luc admits that he has $100,000 in credit card debt (plus interest), but plans to visit the Gucci store and eat at the iconic, albeit expensive, Balthazar restaurant that same day. He has also booked a vacation to the Caribbean island of St. Barthelemy.

So, is Jean-Luc right or is he delusional?

Rich mood

You might be surprised to know that personal finance expert and radio host Dave Ramsey similarly believes there’s a difference between being poor and living that way.

“Poverty is a state of mind,” Ramsey said in a 2018 YouTube video. “I’ve been broke, but I’ve never been poor.”

Ramsey believes that a poor person can have a rich mindset and a rich person can have a poor mindset. Think of a trust fund baby who spends all his money or a lottery winner who loses all his winnings.

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But here’s the difference

Where the two men differ is that Jean-Luc wants feel rich, while Ramsey pretends be rich.

Jean-Luc believes that “you don’t even have to be rich to act like this.” He lives this mantra by buying expensive clothes and going on sunny vacations.

But Ramsey believes that a wealthy mindset is one that drives someone to generate wealth. Instead of racking up $100,000 in debt, he would invest the money long-term so he could buy clothes and go on vacation without consequences.

Ramsey would probably accuse Jean-Luc of engaging in “poor people’s stuff” by spending recklessly, something he vehemently disapproves of.

How to act rich

Ramsey explains what the “habits of the rich” are like using lotteries as an example. It cites a Bloomberg article that cites a Bankrate study that says the lowest-income households in the United States at the time spent $412 a year on lottery tickets, nearly four times as much as the highest-income households. For some, winning a jackpot may seem like a path out of poverty.

But Ramsey believes this is the opposite of thinking he’s rich.

“If you put (money) in the lottery, do you know what you will have when you retire? Nothing,” Ramsey said.

Ramsey explains that someone with a rich person’s mentality would take the $412 a year normally spent on lottery tickets and put it in a growth stock mutual fund. Doing so over several decades could generate retirement savings worth hundreds of thousands.

Ramsey admits it wasn’t always like this. When he was young, his business mistakes led him to declare bankruptcy because he owed millions of dollars in short-term debts. He carries the lessons he has learned from his experiences.

“If I kept making those stupid decisions, I’d still be broke,” he said.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

By Sam