How Broke is broke?
 

I was talking with a friend the other day about what people mean when they say they are broke. Our mutual acquaintance was crying poverty and asking for free construction labor since she had already dipped into her 401k and was now down to a mere 420 grand. She is in her late 40s, btw, plenty of work left in her.

I've heard many people complain of being broke then taking three transcontinental flights for week long visits that same year.

So, how broke is broke? Don't include the value of your house, (I think we learned that lesson) just liquid assets.

Do these numbers represent total assets? Savings? The balance in your bank account?

You replied while I clarified that point.

I think it has to do with liquidity.

When my wife and I were younger, we both worked and had no kids or mortgage. The money flowed more freely, but our net worth wasn't really anything. If we wanted a new TV, we'd go out and buy one. Need a new couch, buy one. We ate out all the time. Went on nice vacations.

On paper, we are a lot richer now, but we don't do all that stuff like we used to. The money is tied up in 401ks, 529 college savings, and the house.

We're certainly not broke, but we don't have the lifestyle we had before.

If a person can afford to fly cross country several times a year, they aren't broke. And I wouldn't do free work for anyone if I were you. Barter maybe, but not free labor. Unless I considered it charity or volunteer work.

I am uncomfortable without 3-6 months of burn rate in my liquid assets column.

But then, I am a very risk-adverse person.

I have a hard time drawing a definitive line. As the asset value shrinks, I become more and more uncomfortable and scale back accordingly. To consider ourselves "broke" I think we'd have to be both out of money and unemployed.

Oh yeah, no free lunches given out here. And not to pick nits but they were transatlantic flights.

Yeah, there is the small "b" I'm broke, meaning I don't have any ready cash and the big "B" I'm broke meaning I don't have any assests to tap into.

I'm talking about big B Broke.

And what Clod says is also true, when you see the value of your stocks shrivel up it is worrisome since their shrinkage has nothing to do with your spending habits.

I have $0 in my account.

Rowed with Mum tonight.
No idea what will happen tomorrow (she went to a village pantomime I also had tickets for).

I'm still angry. If I am, she is too.
I learned holding a grudge from her.
Am gonna go to bed with earplugs in and hope either I or her (v bad grammer!) work it out overnight.

Because right now I think she's a fucking bitch that seeks out someone's weak spot in order to dig into it. Then when it bleeds, she displays it as a sign of weakness.

Like getting my brother to call me "Droopy Eye!" when I was younger.
Some peple shouldn't have children.

I am Broke.

I lived a few years being VERY lucky if I wasn't overdrawn: to get the bills paid I took a chance the bank would cover the check (with all the charges therein.)

I don't think you should even use the word broke unless you're like what Sinbad (the comedian) spoke about: "College broke." You find a dollar on the street and the birds start singing. You say to yourself "I think I'll just hang out with my dollar tonight."

Other than that, you don't know broke.

I'm sure many of us have been there, though.

People who cry broke because they can't buy a new luxury car to replace the year old car they have and the like: they make me itchy.

Big B itchy or little b itchy?

No itchy...as in scratchy.

Audibly laughing, I am.

Uh-huh...yuck it up guys. :cool:

'Broke' is a relative thing for me mainly. If I can afford to do the things i need/want to do then I am not broke. If someone invites me to a party that might involve me spending £50 and I only have £70 in the bank, I might say no on the grounds I am broke, or that it would leave me broke.

But if I am not planning on going anywhere and I have food in my kitchen a packet of fags and bus fare for my two days in uni, then I can have a fiver in my purse and nothing in the bank and not feel broke. Depends.

I'm at my comfort level if I have over £150 in the bank with less than 2 weeks til payday. That rarely happens :P Mind you.....actually that never happens, because I am always in overdraft. I am only out of overdraft three times a year when my student finance goes in :P By £150 in the bank, I really mean £150 in available funds.