Money Fail: Spending to Impress
Last weekend, we had some of the neighbors over and we were talking about the way some people act. One of my neighbors, who is a salesman, used to live in the new upscale part of town. He told us he was invited to a barbecue and his neighbor had almost nothing to eat or drink for 20 guests. My other neighbor, who owns a landscaping company, told us he has customers with two or three multi-million dollar houses that have a Camry or an old Mercedes station wagon in the garage. We all agreed most of the truly wealthy people we knew were some of the nicest and least pretentious. Most of the people flaunting their money, complained about being broke whenever they got a bid or had some work done.
This is the fifth post in a series of Money Fails.
Money Fail: Broke on Thursday
Money Fail: Dead End Job
Money Fail: The Payment Mentality
Money Fail: Ignoring Unpaid Bills
Money Fail: Spending to Impress
Money Fail: Never Track Finances
Money Fail: Lenders of Last Resort
All Show and No Dough
- Image by Rob Lee
A couple of years ago, I was sitting in Big O Tires, waiting for them to put some new tires on my wife’s Jeep. A doctor drove in with a new Mercedes and needed some tires. The reason I knew he was a doctor was because he made sure everyone in the waiting room knew he was Doctor so and so. Anyway, he tried to get some tires with their 90-Day Same as Cash, but his credit was declined. Honestly, I felt really bad for the guy. I’m sure he worked very hard and had a high income. He probably has a nice house to go with his new Mercedes, but he couldn’t afford tires. It left quite an impression on me.
Let’s face it; looking wealthy isn’t the same as being wealthy. It’s a lot easier to look successful than it is to actually become successful. To some people, image is everything. But, image doesn’t buy you much in the financial world. The irony is that some people spend themselves so heavily into debt to look successful, that financial security becomes almost impossible. Instead of living the dream life, they are living with the bills for the things they really couldn’t afford to buy.
Security is the Reward
Most of the wealthy people I know are more concerned with financial security than material possessions. Sure, they have nice cars and houses, but it’s knowing they could live for many years without an income that makes them happy. I believe it’s one of the reasons they are so down-to-earth. They don’t have the stress and worry that people on the debt treadmill have. They aren’t worried about losing everything, because it would take a catastrophic event for that to happen. They have a surplus of income and they can enjoy most of the things that make them happy.
That’s my dream for the future. I don’t need to live like a rock-star, in a mansion. But, I do want to live without stress and worry. I want to be able to buy a car or take a vacation, without wondering how long it will take me to pay it off. I want to be able to wake up without an alarm clock and take a day off of work, without filling out a form. I don’t know how long it will take before I can live my dream. But, I do know I am getting closer each and every payday.
The Mountain of Wealth
One thing I have noticed about wealth is that it’s like pushing a heavy rock up over a mountain. It takes a lot of effort to push it up the front side, but then it starts to roll down the back side almost by itself. I still remember how long it took me to save my first $5,000. It took almost 4 years and it was painful saving that $100 every month. But, it seemed to go from $5,000 to $10,000 in the blink of an eye. Not only was I putting more money away, but the money I had already invested started to grow. Now, I save more every month than I used to save in a year. And, the interest I earn doubles that amount in a good year. The hardest part is getting started and having faith your savings will pay off. The easy part is when your principle starts to double a couple of times. That is when you know you are on your way.
The Bottom Line
The bottom line is that every dollar you spend on bling is a dollar you won’t have to power your future. And, every dollar you go into debt, takes a couple of dollars to dig back out. If you really want to impress the world, power up your investments, instead of your loans and credit cards. Buy the bling when you can afford it.
“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”
Will Smith – Actor and Entertainer
Recommended Reading
Watson Inc. – Is Saving More Important than Investing?
Online Investing AI Blog – The One Thing That Buys Happiness
Life and My Finances – 5 Reasons why Immigrants are more Wealthy than You
This post was featured on the Carnival of Personal Finance over at Sustainable Personal Finance. If you aren’t familiar with the Carnival of Personal Finance, you need to check it out. It’s the toughest collection of financial articles west of the Pecos.
Thanks for recommending my post! I’m fascinated by the wealth of some immigrants, especially when I compare their finances to my friends. Immigrants usually kick everyone else’s butt in the wealth department. 🙂
It really is true. Most Americans don’t see the huge opportunity that is right in front of them. But, many of the immigrants take full advantage. I believe the contrast from the conditions they came from encourages them. I also think the successful immigrants are the strong and adventerous types. The weak and timid stay home.
Great post. I do personally feel sorry for many doctors and other professionals in the clinical sciences (that’s my background, so I encounter many) that feel that their self-worth is somehow tied to their possessions while they rob themselves of financial security. Like you suggest, security is a much more laudable goal, and once your savings and investments “get going” well, it is actually a lot easier to grow your wealth. I’m with you on being able to save more in a month than in a year. It’s crazy how that sometimes works out.
Roshawn,
I have been very fortunate for the past three years to have a great job and I got a bump in income. Since my bills haven’t increased, I am saving the difference. Next year, I am going to boost up my savings another 10%.
That’s powerful stuff about the doctor. It really goes to show a high income isn’t everything – it’s how you manage the money that comes in versus the money that comes out.
Paul,
It sure blew me away. I read in The Millionaire Next Door that doctors don’t have it as good as everyone thinks, but I didn’t expect that.
Love the Will Smith Quote, one of my favorites!
Good article and great reminder.
Shaun,
Will Smith is one of the entertainers I really respect financially. He made and spent a fortune when he was a musician, but he managed his money more wisely after he transitioned into an actor.
Fantastic post! Not only am I including it in my weekly round up this Saturday, but I’m your newest subscriber! Found you via the CoPF.
Thanks for stopping by Kaye. It’s an honor to have Mrs. Nespy comment on my blog.