The right answer is the second: The setting reveals that he is not an excessively wealthy man himself, but he lives surrounded by wealthy people. The novel's narrator, Nick Carraway, lived in a house that he describes as an "eyesore, (although) a small eyesore," an unpretentious cottage that somehow had been ignored and that, for eighty dollars a month, and because of its location, granted him the chance to have relatively nice views and wealthy neighbors, such as Jay Gatsby, who lived next door, in a breathtaking mansion.