Given a choice, would you rather be rich, or just look rich even if you’re dead broke? Believe it or not, most people would rather look rich than actually be rich.
I’ve been reading The Millionaire Mind, and it reveals the differences between what we say and what we do. The book chronicles the spending patterns of genuinely rich people, and the lifestyles they enjoy. There are two groups of people with serious money: the glittering rich (think Donald Trump or Larry Ellison) and the millionaires next door.
The glittering rich are people with so much money that spending really doesn’t matter. They own multiple cars, multiple homes, and they tend to throw very lavish parties. We all know who they are and they set a remarkable standard for living.
Other rich people are remarkable for differing reasons. As The Millionaire Next Door pointed out, they stand out for their modesty and common sense. These millionaires drive normal cars, live in middle-class neighborhoods, and surround themselves with value-oriented merchandise. We know who these neighbors are too, but we probably don’t realize how financially successful they truly are. They set a different kind of standard.
It’s Better To Look Rich Than Be Rich?
Here’s the paradox. The average person who wants to be a millionaire doesn’t want to live like a real millionaire. Most of our society likes to dwell in a culture of false wealth, where looking rich is more important than being rich. It’s the world of luxury goods sold to high-income buyers. But, sadly, that spending pattern yields no real wealth. These are the people with the million dollar mortgages on their mini-mansions. They lease all their luxury automobiles. They send their kids to private schools, and belong to expensive country clubs. They buy Brooks Brothers suits and shop at exclusive department stores. They are glittering rich wannabes, and they spend most of their income on a prestige lifestyle. There’s nothing left for saving.
If you showed women pictures of men with nice cars and Brooks Brothers suits, along with pictures of their nice houses and the upscale stores where they shop, and then showed pictures of the millionaire next door, the house he lives in, the car he drives, the stores he shops in, etc., and asked the women which man was more desirable as a mate, guess who they would choose?
Society at large has bought into the hype of “looking rich” rather than “acting their wage” as Dave Ramsey would say. A lot of high-income earners have no real concept of what it really means to build wealth. A big house, or a luxury car does not mean that a person is rich.