Rich Rat, Poor Rat

"Woa look at that BMW! Darn, that rich guy." says Mr Poor Rat.

It is so common to see BMWs and other expensive cars around in Singapore. There is nothing wrong with driving a expensive car, there is nothing wrong with spending thousands of dollars on a handbag.

What is important if a person so chooses to be rich, is to understand a simple concept.

Passive income > Life expenses

If a person has 100K passive income a month, whats wrong with driving a 300k car?
But if a person makes 10k a month and chooses to drive a 300k car, is he really that rich after all?

All im trying to say is this: We can only know if a person is rich or poor, if we know his passive income and life expenses clearly. Not by what he drives or consumes.

For all that we know, that BMW driver could just a Rich Rat, running in a wheel which is the same as the thousands of Poor Rats out there.