What Does “Being Rich” Actually Mean? Teaching Tweens About Net Worth, Income and Lifestyle
For many kids, “rich” can look pretty simple: a big house, designer clothes, luxury vacations, expensive cars or the newest phone.
Social media makes those signals even more visible.
But there is a major problem with judging wealth by what we can see:
We usually have no idea what someone actually owns, owes, earns or saves.
That makes ages 12–16 an important time to teach the difference between income, lifestyle and net worth.
Research supports the importance of this conversation. A 2023 study published in The Journal of Psychology involving 880 adolescents found that upward social comparison on social networking sites was associated with greater materialism, with lower self-esteem helping to explain part of that relationship.
A separate study published in Frontiers in Psychology examined 500 U.S. adolescents and found that adolescents who felt a stronger sense of connection with social media influencers were also more likely to report materialistic attitudes and intentions to buy products promoted by those influencers.
Whatever your opinion on social media, this research supports that kids need some financial context for what they are seeing.
What Kids See Is Usually Lifestyle, Not Wealth
A person can have a high income and still have very little wealth. Someone might earn $250,000 a year but spend almost all of it. Another person might earn $90,000, live fairly simply, save consistently and build investments over time.
Who is richer?
That depends on what we mean by rich.
This is where three simple concepts help.
Income
Income is the money coming in.
For an adult, that might include salary, business income, investment income or other earnings. Income tells us how much someone earns.
It does not tell us how much they keep.
Lifestyle
Lifestyle is what someone spends money on and how their life looks from the outside.
Cars, homes, restaurants, vacations, clothes and technology are all highly visible.
Savings accounts, retirement investments and mortgage balances are not.
That means lifestyle is often the easiest part of someone’s financial life to see, and the least useful for determining how wealthy they actually are.
Net Worth
Net worth is what you own minus what you owe.
For example:
A family owns:
a house worth $700,000
$150,000 in investments
a car worth $30,000
$20,000 in savings
That is $900,000 in assets.
But suppose they also owe:
$500,000 on the mortgage
$20,000 on the car
$10,000 on other debt
That is $530,000 in debt.
Their net worth would be about:
$900,000 − $530,000 = $370,000
This is very different from simply saying, “They have a $700,000 house, so they must be rich.”
Social Media Can Make Wealth Look Easier Than It Is
This is particularly important for tweens and teens.
Influencer content often focuses on things that photograph well: new clothes, vacations, houses, cars, beauty products, restaurants and “haul” videos.
Kids rarely see:
taxes
mortgages
business expenses
credit card balances
savings rates
investment accounts
debt
sponsorship arrangements
gifted products
rental cars or temporary accommodations
So the lifestyle may be real, but the financial picture behind it is usually invisible.
Research involving adolescents has found that influencer relationships can be associated with materialism and purchase intentions. Another study found that social comparison plays a role in materialistic values and buying behaviour among adolescents and young adults.
That makes a simple question useful when kids see lifestyle wealth: “What information are we missing?”
Try This Example With Your Tween
Imagine two individuals:
Person A | Person B | |
Annual income | $200,000 | $95,000 |
Vehicle | Drives a $90,000 vehicle | Drives a seven-year-old car with no car payments |
Vacations | Takes expensive vacations | Takes modest vacations |
Spending habits | Spends heavily on clothes and restaurants | More modest visible spending |
Savings / investments | $15,000 in savings | $150,000 invested |
Consumer debt | $120,000 | $0 |
Ask your child:
Who looks richer?
Probably Person A.
Then ask:
Who might actually be wealthier?
Suddenly the conversation changes...
That is the lesson:
the person who looks richer is not always the person with greater financial wealth.
High Income Is Not the Same as Wealth
This is one of the most useful financial concepts kids can learn before adulthood. A high income can make wealth easier to build. But only if some of that income is kept.
You can explain it this way:
Income is what flows through the door. Wealth is what stays.
Someone earning a lot of money but spending all of it may have a high-income lifestyle without much financial security. Someone earning less but consistently saving and investing can quietly build significant wealth.
Debt Changes the Picture
Tweens also need to understand that seeing something does not tell you whether the person owns it outright.
A $70,000 vehicle might mean:
“I had $70,000 available to buy this.”
Or it might mean:
“I borrowed most of the money and now make a payment every month.”
The same applies to houses, vacations and purchases made with credit. Debt is not bad. Mortgages, education loans and business borrowing can all have legitimate uses. The important lesson is: The price of something does not tell you the financial position of the person using it.
What Should “Rich” Mean Instead?
Rather than telling kids that money does not matter, which they may not find very convincing, we can give them a better definition. Being financially secure might mean:
having savings for emergencies,
being able to pay your bills,
having choices,
not being overwhelmed by debt,
being able to handle unexpected expenses,
investing for your future, and still having room for some things you enjoy.
In other words:
wealth is partly about what you own, but financial freedom is about the choices your money gives you.
A Great Social Media Exercise
The next time your child sees an influencer showing an expensive purchase, ask three questions:
What can we see?
Maybe a designer bag, luxury hotel or expensive car.
What can’t we see?
Income, savings, debt, whether the product was gifted, whether the car is leased, or how much the person spends.
What would we need to know before deciding whether this person is actually wealthy?
That turns social media into a financial literacy lesson instead of simply telling kids not to compare themselves.
Some influencers and creators genuinely are very wealthy. Some people with expensive lifestyles can comfortably afford them. The lesson is not that visible wealth is fake. It is that visible consumption is incomplete information. By the time kids are 12–14, they are old enough to understand that money has a backstage. The expensive purchase is the part everyone sees. Income, debt, savings, investing and net worth are the parts that actually tell the financial story. Learning that distinction early may help kids make better decisions when it is their own money being spent.
© Financial Kid Academy 2026
The information provided by Financial Kid Academy and its associated social media pages is for educational and informational purposes only and does not constitute financial or formal educational advice.
Research Sources
Hu, Y.-T., Liu, Q.-Q., & Ma, Z.-F. (2023). “Does Upward Social Comparison on SNS Inspire Adolescent Materialism? Focusing on the Role of Self-Esteem and Mindfulness.” The Journal of Psychology, 157(1), 32–47. PubMed record
Lou, C., & Kim, H. K. (2019). “Fancying the New Rich and Famous? Explicating the Roles of Influencer Content, Credibility, and Parental Mediation in Adolescents’ Parasocial Relationship, Materialism, and Purchase Intentions.” Frontiers in Psychology, 10. Full article
Islam, T., Sheikh, Z., Hameed, Z., Khan, I. U., & Azam, R. I. (2018). “Social Comparison, Materialism, and Compulsive Buying Based on Stimulus-Response-Model: A Comparative Study Among Adolescents and Young Adults.” Young Consumers, 19(1), 19–37.
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