Only you can define your own success, and only once you have defined it can you establish the long-term and interim goals to get you there. So in that spirit, let me ask you a question:
Do you want to be rich?
Not me. I’d rather be wealthy.
When I make that argument, it’s not just semantics. I firmly believe being rich and being wealthy are synonymous only in the broadest sense of the terms. In fact, trying to become rich can be an obstacle to becoming wealthy. Here’s why, being rich is having the appearance of being wealthy. The price you pay for that appearance can prevent you from ever having actual wealth. In appearing to be rich, you spend money on things that make you appear rich. Since you can only spend that money once, it does not go to building your wealth.
In other words, appearing to be rich takes money out of your pocket. Being wealthy generates income, whether you work for it or not.
Spending money is a drug. It releases endorphins in the brain. Endorphins work like morphine or codeine, and they can be just as addictive. When you buy new clothes, the endorphins create a rush of good feelings. People can come to depend on that rush. But as with other drugs, that relief is fleeting and illusory. Soon, instead of making them feel better, people are shopping to get that rush just so they don’t feel bad.
Buying new clothes or accoutrements is not a problem. Buying them when you can’t afford them, or even when you just don’t need them is. I know people who spend several hundred dollars a month on clothes. If their wealth generates that kind of income, more power to them. If their jobby job creates the income for this spending or worse, if they can’t afford it, it’s a real problem that can prevent them from ever accumulating the wealth that could make such spending sustainable. Looked at another way, a $500 a month clothes habit, amounts to $6,000 a year. Depending on your market, that’s a downpayment on a rental house every one to three years. The rental house could net you as much as $500 a month in ongoing income.
Cars have always been my weakness in this area. For most of my adult life, a Jaguar XJ has always been my dream car. I bought a used one in the 1980s, but I had to sell it when the cost of maintenance became unsustainable. When I finally bought a new one, I thought I’d finally made it. I felt great driving it around. But as Stephen West observes, “…what actually happens is you get the dream car…then it just becomes…your car at a certain point. Then inevitably…there’s something else that you’re desiring every day.” We are “constantly restlessly striving for things in a perpetual state of discontent.”
That is the real trap of things. They don’t make us happier. They just keep us from being independent. We get caught in the webs of excess consumerism and conspicuous consumption. That Jaguar is a perfect example. At the time, I could have bought a rent house for what I paid for it. In Austin, that rent house would be worth about 140% of its purchase price. If I were to sell the Jag, it would bring about 15% of its purchase price. And clothes are worse. Sometimes we can’t even give away old clothes.
Consumerism is the bonfire into which we throw our hard earned money…and our financial independence. Spending money on things may make us feel good at the time—it really does—but it makes someone else wealthy at our expense.
So when you go to the store and find yourself about to spend money, take a second to ask yourself, “What does this purchase help me accomplish?”
Do you need that Lear Jet, or just want one?Hermann says please like and share!