Getting Haters Out of Your Wallet
August 24, 2012 | Posted by Roshawn Watson under Uncategorized |
If you have been in the “way” – the frugal way – for any length of time, you build wealth. Wealth is the product of good stewardship of resources, but building wealth and having the tangible products of wealth are not the same things. You can fare well without having obvious displays of material wealth. For instance, you may be increasing your net worth, investing for retirement, maintaining a fully funded emergency fund, and developing multiple streams of income but lack the resources to support taking a year or 2 off or purchasing a luxury car outright (if that’s your thing) for years to come. It’s all the Law of Process. Unfortunately, the fact that time is required before you get to the “good stuff” is often lost on haters who love to play armchair quarterback of your life. In short, there is a disconnect. Of course, you are not going to abandon all of your hard work for shallow, conspicuous consumption simply to appease an idiot who wouldn’t know a good financial plan from a menu at Ruby Tuesday’s. That said, it can still occasionally hurt to have your efforts and progress minimized, ignored, or even dissed, particularly if the perpetrator is family or a “friend.” Building wealth is typically a long-term marathon rather than a sprint, regardless of how it is portrayed in the media. Here are some key points to remember when people comment on the apparent disconnect between your financial plan and your consumption.
Grasping Hold of the Invisible
Lately, I have been so disillusioned with some of the most common measures of wealth. For example, a coworker was completely stunned by my response to his admiration of another coworker’s BMW. Not only was I unimpressed, I offered my sympathy. It’s been years since I even considered BMW or Mercedes true luxury brands (gasp). Sure, they can be pricey, and millionaires sometimes drive them (not as many as you would think), but so does nearly everyone else (at least it seems that way). 1 They are downright common, and a hallmark of luxury is exclusivity. I mean NO disrespect if you dream of driving one of these cars, but I typically think about the payments that the nonwealthy use to acquire these brands rather than the “joy” or the supposed “status” of owning them. The only time I celebrate someone owning any luxury car is when they purchase them for cash (and typically used so their “asset” (ie, car) doesn’t instantly depreciate by 40%) and have a considerable net worth. For example, when my friend purchased a Maserati after wanting it for 20+ years or when my other friend bought her Rolls Royce, I was ecstatic for them, as they have truly paid the price financially to own those vehicles.
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Obviously, I’m in the minority, or the “luxury” dealership would probably be out of business. Most people do look at external measures to assess financial success. Perhaps, that is one of the reasons most of us are not wealthy. On the other hand, most millionaires perform cost-benefit analyses before making such purchases and similarly scorn conspicuous consumption, at least until it no longer significantly impacts their net worth. For example, wealth researcher, Thomas J. Stanley, found that millionaires typically live in neighborhoods where their wealth exceeds that of their neighbors by over 6-fold. Clearly, these millionaires esteem their financial security above the adulation of their “peers.” Consequently, they have way more money and freedom. The problem isn’t having stuff; the problem is being addicted to the approval of others regarding their finances. Essentially, by choosing neighborhoods where they are not barraged with constant pressure to live at or above their means, they have freed themselves of the emptying impact that living near the Joneses would have on their wallets.
The problem isn’t having stuff; the problem is being addicted to the approval of others regarding your finances.
Chicken or the Egg
Thus, they instead focus on their finances from a long-term perspective. Now, I realize that being able to focus on long-term wealth is a luxury of having surplus, but one of the main reasons millionaires have surplus to begin with is due to their long-term orientation. For instance, consider some popular careers that have high proportions of millionaires, such as physicians, lawyers, dentists, college professors, and scientists. All of these professions take several years in order to build the knowledge base, credibility, and skill sets necessary to perform these jobs satisfactorily. Similarly, many business owners and entrepreneurs persist in business after business until they find a winning formula for them, even though it often means forsaking immediate payoffs; note 9 of 10 businesses are said to fail. Of course, there are usually (hopefully) nonfinancial reasons for pursuing aforementioned career paths as well, but in order to persevere through the rigor and years of sacrifice, a long-term orientation is critical. By focusing on where you want to be in the next 5 to 20 years rather than tomorrow, the quality of your decisions will instantly improve.
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The Longest Night Ever
If all of this happened overnight, it was the longest night ever! Unknown
Success takes time. Recently, we saw remarkable displays of what it took to be world champions by the Olympians. It is simply staggering to consider that so many of them worked 6 days a week for the last 4 years for a few minutes (or even seconds) of glory. They sacrificed physically, financially, relationally, and professionally to make this dream happen. It is laudable and the perfect illustration as to what “overnight” success really means.
In reality, most (successful people) are hailed as leaders in their field(s) long after they commit to their calling(s) or to… particular way(s) of living in the world that hold special meaning to them. The mainstream media stories about successful people – along with wishful thinking about instant gratification or a magic pill for success – make it seem as if they were overnight success, but it rarely happens that way. Builders mostly toil with every ounce of their energy and persistence, with heart and soul, for their whole lives. Jerry Porras
Opinions That Count… Only the Qualified Need Apply
You need quality advice, so none of this discussion is to diminish the value of getting input. It is not prudent that you rob yourself of the valuable insights you can glean from seasoned professionals and experienced mentors. That said, don’t get dismayed when others express dissent about your life choices. After all, the only thing that qualifies one to have an opinion is breathing air. No matter what you do or how well you do it, it will never be enough to please everyone. Fortunately, obtaining everyone’s approval is totally unnecessary. If you have vetted your plan and explored the best options, then sometimes you may have to turn a deaf ear to others’ “preferences” regarding YOUR decisions. Just because they would have tackled something differently doesn’t mean that you’re wrong. That’s the beauty of diversity. More importantly, if you continually live your life for others rather than exploring your own passions, callings, goals, you risk carrying regret to your grave. Studies show that people experience more sadness towards the end of their lives about the things that they DIDN’T do rather than what they did. If your primary financial objective is independence, comfort, abundance, and/or to leave a legacy, then ignore noise to the contrary. Gird yourself with the truth that your goal IS possible. Know that normal people become financial heroes, so you qualify.
The only thing that qualifies one to have an opinion is breathing air.
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Closing Thoughts
To those who are working towards avoiding or paying off debt, purchasing cars and homes for cash, investing for retirement or education, building businesses, and/or leaving a legacy for your heirs and communities, your sacrifices are meaningful, EVEN if they draw the scorn rather than adoration from your peers. It is alright if your life choices don’t always compute to those who observe you. Remember, if you did everything “the right” their way, their approval is fleeting anyway. Make decisions based on your priorities not popular opinion or to appease others. Perhaps the first step to financial independence is to get the opinions of haters out of your wallet.
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1 Yes, I realize that a Mercedes C-Class is different from a S-Class.
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I feel lucky to have seen "behind the curtain" of so many people's financial picture for 16 years. That's probably why I don't value many people's opinions about money; there are far less people doing "well" with their money than you'd expect. …and the people who ARE doing well? They generally aren't the type to be haters.
I probably haven't seen nearly as many case studies as you have seen, but I peaked behind the veil too, given the number of people who ask my help on financial matters. It is all very sobering when you can distinguish between the substance and the fascade. I agree with you 100% about expectations versus reality and that people doing well aren't typically haters.
[…] having the tangible products of wealth are not the same … … Originally posted here: Getting Haters Out of Your Wallet | Watson Inc ← Tasha Smith's Husband, Keith Douglas, Shows How to Create … New Thoughts » […]
The real problem with luxury cars are the maintenance cost. We drove a used BMW Z3 for over 10 years and we loved it, but I hated going to have work done on the vehicle. The purchase cost is quite a bit higher than a regular car now as well. We probably won't purchase another luxury vehicle in the future.
I agree about taking others' advice. You should listen and then make up your own mind. People mean well, but they don't know your whole situation and may not have the same value as you do.
I agree with what you said about maintenance. This is true for luxurious housing as well. That's why it ends up not working well for financial phonies: they can't afford to keep up the fascade indefinitely.
The people I know who are rich, drive mostly ordinary cars. They may be newer, but for the most part have a value of $20-30K. There are a few exceptions, but very few. Their homes and net worth are in the millions, but they are rather frugal with assets that depreciates.
Most millionaires I know drive mostly ordinary cars too although I do know a few who drive very fancy cars. It kind of depends on their deprivation (growing up) and their ultimate net worth. I know some who are relatively frugal with the exception of "XYZ" where XYZ is whatever their "weakness" is. Still, if you look at their lives overall, they are VERY frugal compared to the general public.
Excellent article Shawn. The richest man I ever knew personally lived all his adult life (after getting out of the military and getting married) in the house he and his brothers built with their own hands in the early 50s. He understood frugal living before it was cool. He had money because he understood value. Too many people don't understand anything these days, much less value.
Thanks so much Thad!!!! I agree that looks can be VERY deceiving. This has caused me to be deliberately less judgmental. You never know just how much wisdom someone has or their motivations for living the way that they do. In your friend's case, it appears that he had very deep revelations about how to grow money AND was free of the court of public opinion. He sounds like a powerful influence that we could all benefit from learning from.
Very true. I guess it's about practicing more sense of humility. Even if one's finances could already afford more fancy stuff, it's still wiser to pay for just the basic and reasonably priced. We are not judged based on the price of things that we use but on how generous and financially secure we are for a longer term.
Thanks for the comment Amy. You know, I never once thought about humility in writing this post. I am so against people placing you in a neatly defined box (whatever their comfort zone is) that the thought of being less conspicuous to please others is a little bit discouraging. That said, I know what you say. I think intentions, in this case, matter more than the actual decision (to purchase nice things). For example, if you are buying (or not buying) for the sake of appeasing others, you're still being controlled by others, and that may not be healthy. We have to be secure enough to not to be moved by whether someone approves of our financial choices. It is interesting how being mentally and emotionally mature can go hand-in-hand with becoming financially secure.
I totally agree with your example about luxury brands – in our area, you see more Mercedes and Lexuses parked in the driveways of poor neighborhoods than the truly upper class neighborhoods. What's funnier is that a lot of the really rich folks are still driving Hondas and Toyotas.
Thanks so much Elizabeth! I almost took it out of the post because it is more of a rant/annoyance. I don't really care if people like luxury cars or not, but something about some of these brands doesn't sit well because EVERYONE has them. When their is no scarcity, I fail to see why premium brands are special enough to command the obscene prices. I would much rather NOT fool myself (or anyone else) and drive a regular vehicle (Honda or Toyota) than a faux luxury vehicle anyday… no offense to anyone who enjoys vehicles falling in this classification. Currently, I just don't think they are special enough.
I agree with you that the first step towards financial independence is independence – and this includes breaking away from the opinions of others. Good points, Roshawn.
Thanks Maria!
Yeah, it is amazing what you can accomplish when you are not beholden to the court of public opinion.
I have always driven older American cars, becaue I am cheap and I can maintain them myself. My brother bought a used BMW for his wife and he got a good deal on it. But, one of the electric shocks went out and they wanted over $1,000 just for one shock. He ended up selling the car on principal, instead of paying for the shock. Now, she has a Camry.
Hah! I can totally understand where you are coming from with respect to maintenance. I remember listening to a person who owns a Gulf Stream. Someone asked him how much was gas? He told him, if he had to ask, he had no business wanting a jet.
get the haters out of your life, not just your wallet — life's too short!
That's a great point. I agree. It is definitely important to get them out of your life.
isn't it funny how the majority of our money is just numbers – we never actually see the real-life substance because it's too risky to possess
Money always seems more real to me when its in my hands as oppose to just on a computer screen. Quite a scary thing that.
Thanx for this sharing Nice article.
Good efforts, I greatly look forward to future updates.