Would you rather look rich or be rich? A recent early retiree’s thoughts…
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| I’d rather be rich than to look rich |
Cicero: “Frugality includes all the other virtues.”
Ever since I can remember, I realized there were way too many people pretending to be rich by driving luxury cars, playing golf at expensive resorts, buying too much bling, and going on way too expensive vacations. Just counting the people I knew growing up, that number is staggering.
When once upon a time, people I knew drove average/common folk car brands like Buicks, Chevys, or Fords, all of a sudden, these same people started driving luxury brands like Mercedes Benzes, Lexuses, and Infinites.
Did all these same people suddenly hit the lottery? Nope. They were in same jobs or professions, living in same places, and living the same lives. What explains this sudden shift in consumption?
The answer lies in several major factors that happened around the 1980’s, like the end of the Soviet Union (no more nuclear war threats), more consumption driven economy thanks to advances in technology (computer chips created whole new markets for things like personal computers, video games), and robust economy after 1982 onwards.
The ‘Decade of Excess’ as the 80’s is known, should really be looked at as the beginning of easy money (lowered credit card approval standards, lowered interest rates after 1986) that still has huge repercussions today.
The easy money made buying cars easier, and availability of credit cards for most people made charging things on credit the ‘in’ thing to do. These changes certainly made showing off your latest car or gadget, purchased on borrowed money, that much easier!
This phenomenon to want to show off is not unique to any one particularly group of people. It is common here in the United States as well as most capitalist societies, where money is a status symbol. The more you have, the better. When you have it, you flaunt it. Even when you don’t have it (but can borrow it), you flaunt it!
The problem lies in wanting to show off too much, beyond your means, to impress others including your family, friends, acquaintances, coworkers, churchgoers, etc.
I remember going to church on Sundays as a child, and noticing towards the end of the 80’s that common folk cars like Toyotas, Hondas, Chevys were being replaced by luxury cars. I remember adults proudly showing off their latest purchases to others.
It wasn’t just the cars. It would be latest gadgets back then, like the Sony Walkmans, Atari/Intellivision/Nintendo gaming consoles, video cassette players, Apple computers, etc., that many adults were bragging to each other as well.
For awhile, I thought everyone just had more money. I was too young to understand credit cards or loans at the time, but I soon realized that most of them, were just living way beyond their means.
I read a blog article while back where the author, curious about his family’s finances, asked how they were doing financially and what their retirement plans were like. They answered one of three ways:
- My kids are my retirement plan.
- Lord will take care of me.
- Everyone borrows money.
Some of my closest friends were no different in this regard. One of my friend’s family bought a conversion van which they took on cross country trips to the West Coast and Alaska. Little did I know at the time, but they had borrowed money to finance their west coast trip from people they knew, like my mom.
My mom let me know later on that they were spending other people’s money to finance that trip and the van…Wow…
With the advent of social media, I would argue this is even more prevalent. Everyone who has a social media account is showing off their seemingly ‘perfect’ lives. Everyone in social media is having more fun than you, buying latest stuff, and going on exotic vacations.
This is far from the truth in actuality though…
The importance of living your life and not pretending to be rich is one sure way to get rich! In this post, I’d like to discuss the differences between looking rich vs being rich.
What are some of the characteristics of looking rich/pretending to be rich?
- You buy latest everything: gadgets, clothes, accessories, cars, trips to hot vacation spots
- You want to project an image that your life is perfect and you dress a certain way
- You care what others think about you and you constantly need validation from others
- You don’t have an actual financial plan, but rather an attitude of “It’ll work out at the end…”
- You live the ‘FOMO’ (fear of missing out) lifestyle or ‘YOLO’ (you only live once) lifestyle
- You attend expensive concerts that cost hundreds of dollars and you say “It’s not a big deal”
- You have low savings/no savings and/or low/no retirement savings
- You constantly compare to others trying to one-up each other
- You only buy things when needed, done with careful analysis
- You live within your means, and you budget
- You invest your money in assets that appreciate like real estate, stocks, bonds
- You don’t care what others think or say about you
- You believe in delayed gratification, and can wait out an investment so it can have a chance to appreciate in value over time
- You read constantly, and you learn constantly
- You take care of yourself physically and mentally
- Have defined goals that’s written down
- Take risks for better rewards
Wouldn’t you rather be rich than pretend to be rich?
In conclusion:
The road to becoming rich is not easy. If it was, then everyone would be rich. When we’re young, we all have fantasies about being rich from cartoons like “Richie Rich.” We all thought how cool it would be to have all that money to burn.
As we become older, and get real world jobs, some of us may still think we can get rich by hitting the lottery, creating a new product/service that everyone will buy, or marrying someone rich.
As time goes by, these are recognized as pipe dreams and unrealistic…
Once we understand the need to wake up from these dream scenarios and take responsibility for our own future, can there be real progress.
Stop living like someone else, and stop pretending to be someone you’re not. Stop pretending to be rich.
Do change your behavior and follow the characteristics of an actual rich person!
Thank you all for reading!
Jake
Wandering Money Pig
Please check out our YouTube channel ‘Wandering Money Pig’ showcasing our travels and our Pomeranian dog! https://www.youtube.com/channel/UC3kl9f4W9sfNG5h1l-x6nH
