Getting rich is far different than appearing rich.
In The Millionaire Next Door, the authors tell the story about the lessons they learned interviewing high-net-worth individuals in a setting designed by gourmet food designers. They write,
…we wanted to make Mr. Bud feel that we fully understood the food and drink expectations of American’s decamillionaires. So after we introduced ourselves, one of us asked, “Mr. Bud, may I pour you a glass of 1970 Bordeaux?”
Mr. Bud looked at us with a puzzled expression on his face and then said:
“I drink scotch and two kinds of beer—free and BUDWEISER!”1
For the teetotalers among us, this is not an endorsement of Budweiser or drinking alcohol.
Rather, it is an illustration of healthy money habits.
According to the authors, what characterized millionaires was not high tastes and high spending, but frugality.
Let’s be clear, though. As personal finance author Ramit Sethi has pointed out, health money habits is not simply cutting out coffee or trimming a streaming service from your subscription or drinking cheap beer. It is by strategically focusing on more significant financial habits like automatic saving and investing.2 When one develops indispensable practices like that, enjoy your money!
What the anecdote is getting at is the incessant internal desire to impress others that human beings are prone to. It’s a money pit.
Wealth building has an inverse relationship with status seeking and braggadocio.
There is no shortage of cocky rich people flamboyantly displaying their wealth, nor is there a shortage of cocky indebted people flamboyantly displaying their spending.
The takeaway is: don’t aim at status or even “being rich”, for that matter, but aim at wise financial habits.
Status-seeking, or as some like to call it—pride—is not simply a deadly sin but a deadly financial decision.
Pursue the habits of holistic wealth not the status of phony wealth.
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Sources:
- Thomas J. Stanley & William D. Danko, page 28.
- "Self-made millionaire: Don’t deny yourself—you can buy lattes and save money at the same time” (November 28, 2018). Accessed online: https://www.cnbc.com/2018/11/21/ramit-sethi-dont-deny-yourself-you-can-buy-lattes-and-save-money.html