Do You Even Want To Look Wealthier Than You Are?

My friend Sam is the subject of my story. Although we have known each other since high school, but Sam has never learned how to live within his means. Actually, he often exceeds them. Just basic arithmetic skills would demonstrate why this would be a bad idea in the long run.

Like for instance when Sam thought it was necessary to buy his brother-in-law a new truck worth $28,000 because he is a construction worker and needs one.

Can You Guess How Bad It Ended Out?

Then Came The Nightmare

Soon after that, Sam’s brother-in-law got caught drunk driving and was deported back home. As a result, Sam remained with the vehicle having monthly payments of six hundred dollars ($600). He could not even sell it because its value costed lower than the outstanding loan amount (it was under water).

When Sandy saw her husband driving around in a new car she became jealous and decided she also wanted new wheels. So she spent $33,000 on an attractive Chrysler 300.

“However people are always buying new cars so what’s the big deal?” you may ask.

After their house was foreclosed during the last financial crisis, Sam and Sandy have been staying in an apartment ever since then. When they bought their house they had no idea what an ARM mortgage was let alone asked for help explaining whether they should take an ARM loan or fixed-rate mortgage (For those who don’t know, interest only ARMs are mortgages where only interest payments are made over predetermined period without any principle repayment.).

It Started Small And Mushroomed Into A Huge Problem

Years after losing their home Sandy bought a time share property as a good investment to leave for their adopted daughter thinking it will only cost them $2,500 annually for ten years. The possession of such a timeshare made them appear better than their neighbors who lived in same apartment building complex. Therefore they lost their home, took out two more car loans and agreed to an expensive timeshare. It was a mess.

The other day Sam admitted that they were having financial difficulties and were behind on car payment. Furthermore, they also obtained payday loan to cover vacation expenses such as plane tickets, rental car and Disneyland/Universal Studios tickets because they could not afford to miss the holiday after paying for timeshare. The payday loan was for $5,000 at a short term rate of approximately 250%. When it couldn’t be returned upon due date it soared above 400%. They even used their entire refund check plus stimulus money just to pay off that debt.

There’s Some Help Available (If You Want It)

I told Sam about Consumer Credit Counseling Services, and fortunately he listened to me. However, he refused when I suggested selling his vehicle or timeshare. Sam is a good person but would rather not say “enough is enough”.

Sandy is no better either. Maybe instead of appearing rich they could build wealth if only they stopped worrying about appearances altogether. They should stop trying to keep up with Joneses.

Is Our Connection between Money and Personal Worth Still Strong?

Society usually links wealth with personal value. Those who have money seem to be more important or powerful ones. Nevertheless, how do you know who is really rich and who is not? Sadly, material things are still seen as a sign of success. Hence many people try to appear rich by purchasing new cars, bigger houses, expensive holidays and top-of-the-range gadgets.

My friends fell into this trap. Purchases made just for show are costly and often bought simply to impress others with the supposed appearance of luxury.

Keeping Up With the Joneses

People fake it because those who flaunt money look like they possess status and authority; that’s why others are trying to be part of their group until they make it for real. Some don’t become who they were pretending to be in most cases. Constantly buying things you can’t actually afford will probably keep you from ever ensuring your financial future. Instead, you will find yourself under debt burden paying interest to other people.

Who Are You Trying to Impress?

Ask yourself why you want it before making a purchase. More often than not, rather than fulfilling a genuine need you are trying impress someone else instead. In our society, status symbols related to wealth are highly valued so many people want to appear as wealthy as those around them and thereby get involved in large scale borrowing by far too many.

The funny thing about this is that the Joneses may themselves be using credit cards just so they can look richer than others do yet actually their liabilities remain!

That Is Particularly True For Younger Generations

Many millennials fall into this trap according to Credit Karma report which informs that 39% have bought unaffordable items in order to stay at par with peers against 73% that pretends not being in debts (Credit Karma Report). Furthermore 36% among those who do not owe any funds right now do not know if they can stay without debt for another year, following the pace of life of their peers. This shows how important looks are especially to millennials and younger generations since money is still seen as a measure of value.

Do Not Compare Yourself to Others

Evaluate yourself against your own person only. It is okay to use your credit cards for points so long as you pay them off every month. However, purchasing them because your neighbor has them is foolishness. Your neighbor may have put themselves in debt to buy it. Who cares if that happened or not?

Take into account personal priorities and preferences. For example, our neighborhood has at least 60-inch televisions, but we have a 32-inch set that is fifteen years old because television viewing is not important to us. Instead, we spend more money on quality meals. Our neighbors may have different things at heart and that’s okay.

Concentrate On Your Financial Freedom

Rather than trying to impress others, concentrate on financial freedom instead. Spend money on things that actually make you happy. These things are not worth all the money one has ever had laying around – never be a slave to your appearance.

I paid much more money than before on my TV for I did not update it after some years; now I can get a fresh one annually with the proceeds (Bender). Meanwhile several of my fellow residents keep buying newer televisions spending their salaries rather than investing in their retirement (Stephens). Some are still paying off debts from those televisions via credit cards and will probably never retire from work.

The Millionaire Next Door Is It You?

Books like The Millionaire Next Door reveal a completely different group of individuals who are actually millionaires in disguise. They don’t look or behave like typical rich. Instead of trying to appear more affluent than you are, strive to live at, if not beneath, your means. Eventually, it will be worthwhile.

In Conclusion

Though Sam and Sandy seemed to have a nice life together; they were not rich at all. Rather than amassing wealth; they gathered debts. Do not budget for how wealthy you would like to appear but rather upon needs. Look at what really matters to you right now? You may not look rich but eventually you will have true wealth.

What do you think? Are we too concerned about appearing rich?

Sebastian Lee

Associate Writer • Social Media and Cultural Trends Writer

Sebastian creates compelling posts, topics, and reviews of social media and cultural trends to help readers on what’s in and what’s out.