Megan McArdle has a great post up about how rich we are today:

The average middle class man of 1920 would have regarded all but the most hopelessly drug addled or mentally ill street people as wealthy beyond dreams of avarice.

Yes. But of course, the term rich is highly subjective and I have a suspicion that the average middle class citizen these days is reluctant to consider him or herself rich. Yet, by any measure they should. The problem is that very few have discovered that the road to wealth is not just traveled by making more money, consuming moderately is equally, if not more, important.

Even during the years when I received a generous salary and bonuses I did not hesitate to wait for a bus rather than take a taxi home, indeed the US$3 saved this way (this was in Hong Kong) was enough of an incentive for me to wait a few extra minutes in the sweltering heat. It wasn't a deliberate strategy, it's an almost natural instinct, the same by which I avoid going to Starbucks, something I see a lot of people with less income do on a daily basis. To me Starbucks is a luxury; coffee: you can brew it at home. And it is just not the small things, until recently I drove an old Honda up to the point that it became embarassing when visiting clients.

My point is, these days we can squeeze so much value out of middle-class incomes that most people indeed do not realize how incredibly wealthy they are. Believe me I can splurge on certain items, but I can afford to do so because I have consistently made choices when it came to spending and saving money. Yet cheap credit, soaring real estate values and the Hollywood lifestyles blasted continuously into our living rooms have created a consumerist middle class that will never ever be rich, they want it all and they can now get it all. The price they pay for that is substantial: their independence. And they will never be rich.