The Pitfalls of The Aspiring Rich
It’s really interesting to analyze the difference between the wealthy and the perceptibly wealthy. From what I have witnessed in the world around me, wealthy people have the same mindset from very early on that they are going to be savers and live below their means. Usually people who are wealthy drive average priced cars, live in average priced homes, and are afraid of getting in over their heads. This idea of living comfortably, drives them more than the need to impress and show off.
There are then other people who feel the need to match up and stand out regardless if they have the means or not. This is very common for individuals assuming a certain lifestyle while transitioning into a new phase of their life. I notice that it is very common for new college graduates who are in debt and starting in their entry level jobs to go out and assume the lifestyle by purchasing a car they can’t afford. I’ve also seen people who are just transitioning into the real estate world, go out and purchase a new fancy car to assume the image of a wealthy sales person. It’s the trap of doing ‘what I think I’m supposed to be doing’ rather than what is smart and practical. In most of the instances where I have witnessed this, these people were biting off more than they could chew.
Regrettably, this sort of lifestyle keeps people from getting ahead and saving their money because they are pursuing temporary materialism and neglecting a life of financial peace that comes with purchasing assets that produce income. The truth is, wealthy people don’t like the idea of instability and having a great deal of debt. A large debt burden is something that those who live for the here and now tend to embrace.
These type of people that pursue these extravagant consumer purchases usually put themselves in a jam where they feel they need to maintain their status in front of society. They exalt themselves to the point where they let everyone know how great they are with the way they live their life. This puts them in a position where they have to continue making a great deal of money just to keep up with their own image that they created for themselves. Once you’ve started down this path, usually expensive upkeep is required to maintain the image that you’ve portrayed to the world. After you’ve gone out and acted like such a arrogant elitist in front of your family and friends, the back peddling could be quite embarrassing if for whatever reason you ever had to ask these people for help because you failed. It’s just a downward spiral and a life of despair if you ask me.
As I stated earlier, wealthy people have a mindset and are living life for themselves, not for others. The mindset is financial security and having a comfortable lifestyle that is sustainable, not difficultly, under whatever it is that they make.
I personally know people who have made literally millions of dollars and are broke. I’m sure some of you are reading this disgusted thinking how people can squander that kind of money, but it is totally possible when thinking is only done in the short-term.
It’s easy to sit back and criticize everyone and act like I don’t have any natural human tendencies, because I do, but after I started making more money and had purchased my home along with some rental properties and other assets, I felt like it was time to buy a new car. Of course right?! After all, “I deserve it!” Long story short, my wife and I walk into an Infiniti dealer and drive off in a brand new G37. This had been my reasonable dream car for the longest time and I finally had the chance to bring one home. Not that Infiniti is a super elite car company, it still does carry some class that was not present in my previous car.
After having it for a while now, the excitement is over and I realized I could have purchased a car that would have cost half as much and invested the spare money I then would have had. Granted, I made sure that I could afford it and that this decision would not get in the way of any of my long-term goals; it’s just that the frugal urge at the back of my mind tells me that I could have made a different decision with my money. I can’t say that I don’t enjoy the car; I love it. I just do not have it in me to pay for things that are not necessary. So needless to say, I have partial buyers remorse over this purchase which will influence my decision on how to proceed when I need to replace this car.
Is it okay to make mistakes? Sure, we all make mistakes and no one is perfect. Acknowledge the mistake and then move on. The best thing to do is make changes that build your future rather than make it harder down the line. My biggest piece of advise for anyone trying to build a financially peaceful future is to make decisions now that will build your future and not drag it down. This advice mixed in moderation is a recipe for happiness.
The Takeaway From This
You are not the car you drive or the clothes you wear. Wealthy people see the bigger picture and are accumulating their wealth through savings and investments. According to the Spectrum Group, there were 6.7 million U.S. households with a net worth of at least $1 million at the end of 2009. The truth is, very few of them won an NBA championship, a Grammy, or started the next big computer software company down in their basement. Modest thrifty living is still a part of the core philosophy of wealth builders of the nation.
Wealth building is not about flaunting your wealth but about the sense of accomplishment and independence that comes with it.
Editor at CrushTheStreet.com