It’s not often that I get to sit down and watch TV for any significant length of time. But last night was the exception and I actually got the opportunity to channel surf on our new TV. As we only have basic cable, I assumed that we only had from channels 2 – 24. However, out of curiosity, I kept pressing the “channel up” button to see where it would go. Low and behold, there are a lot more viewable channels that I had assumed!

Most of the “extra” channels weren’t my taste, but there was a channel that made my eyes widen a little. The little gem was CNBC – a money channel. Last night in particular, there was a show on called “Untold Wealth – Rise of the Super Rich“. The show basically explained the lifestyles of the super rich and tried to explain why they have recently become extremely extravagant spenders.

The show basically came down to the conclusion that some super rich people equate their self worth to what they owned and what they could show off to the world. I don’t think that this phenomenon is limited to the super rich as I think it’s the primary reason why there is so much credit card debt in North America today. Some people want to “appear” rich, even if they don’t have the income/savings to support it. Who’s to blame for this mentality? Is it the constant marketing that we receive from advertisements?

There was another segment about “middle class millionaires” that also peaked my interest. The basic premise was that a lot of self created millionaires (low single digits) still feel like they are still in the middle class because they compare themselves to the “super rich”. Preet has a post that confirms that to some, having MORE money than the guy next to you is apparently more important than the actual dollar amount. How sad is that? Shouldn’t wealth be a personal goal for your personal lifestyle?

Have you fallen into the competing with the Jones’ trap? How happy are you with your finances? I guess it’s all relative.


  1. Ray on September 11, 2008 at 8:45 am

    Personally, I feel good when I see people, especially around my age, making it rich. That means that he or she is probably doing something that I haven’t been doing, and I can learn from them.

    So as long as one doesn’t put one’s self-worth on the dollar figure, having other people to compare with is important and even in a way healthy, IMHO. You get feedback on how well you are actually doing. If both of you are having the same goal (say, to become a millionaire), and the other guy becomes a millionaire in 5 years and you’re still living paycheck to paycheck, then I say you should probably learn from what the other guy is doing right and what you are doing wrong.

    I have a friend who used to make fun of my income. Most people would usually be angry and just refuse not to deal with such a person ever again. Instead, I used that as an additional motivation for me to do better. Today, I’m doing a lot better than he. A friend who can mock you into doubling your income like that is definitely a friend worth keeping :-)

  2. Miranda on September 11, 2008 at 9:16 am

    Thanks for this interesting post! I think that the “appearance” of wealth is a serious problem — as you stated. Unfortunately, we live in a society that values “stuff.” Often our self-worth is not so much attached to a dollar figure as it is to the size of our TVs, the new-ness of our computers and what kind of cell phone we have. Once your self-worth is attached to your material possessions, then poor decisions about money are more likely to be made.

  3. Acorn on September 11, 2008 at 9:37 am

    I am wondering if somebody can give me a clear definition of a “wealth” person or a “millionaire”. If I have $100 M in assets, but I have to work to support it 24/7 – am I a wealthy person? If I have $1 M sitting in the bank and I don’t have to work and I don’t really need to buy anything, am I a true millionaire?

  4. moneygardener on September 11, 2008 at 10:15 am

    Interesting points. Phsychologically you’ll never feel like you’ve reached your goals if your keep comparing yourself to someone wealthier than you.

  5. guinness416 on September 11, 2008 at 10:17 am

    I shall now put on my amateur, uh, sociologist hat. Because we can do that on the internets.

    Honestly, I think in many people it’s a combination of sort of low-level dissatisfaction and inertia much of the time. Not really advertising. You’ve got a job you dislike which gives you fifteen miserable days a year to relax and eats up many of your early mornings and evenings; you’re stuck in a house which you may love but constrains you; most of your paycheque disappears before you even see it into mortgage/various utilities/retirement accounts/life insurance/whatever; you never seem to have enough time to put into your hobbies; your days of clubbing and sleeping around are over; and you have a cool relative or acquaintance who is travelling round the world or made crazy money in the XYZ business or something and making you crazy jealous. And there’s 50 more years of it stretching ahead of you! So a bit of going mad and buying pricy baseball tickets or books or a cool looking car and playing rich-kid is a bit of fun and puffs you up for a little while. I think people know that they need to get passionate about something but don’t have the time freedom like the rich guys to really get stuck in.

    Now I’m depressed.

  6. Dividend Growth Investor on September 11, 2008 at 10:36 am

    The problem with the media is that whenever they show the life of the super-rich, be it celebtrities, hedge fund tycoons or CEO’s, they always focus on the spending side. They don’t focus as much on the time it took these people to actually make it to the millionaire and beyond status…
    In other words people nowadays equate spending on flashy lifestyle as success..which in the case for most credit card owners is very far from the truth..

    The positive thing about spending however is that companies are able to increase their revenues and profits and ultimately hite more the economy and the stock markets are beneficiaries..

  7. AndyBuck on September 11, 2008 at 11:28 am

    “The positive thing about spending however is that companies are able to increase their revenues and profits and ultimately hite more the economy and the stock markets are beneficiaries..”

    I think this creates a bubble though, since this spending is not sustainable. This is exactly what is happening in the US right now.

  8. Mr. ToughMoneyLove on September 11, 2008 at 11:50 am

    When people decide that being “wealthy” is one of their financial goals, they set themselves up for disappointment which they treat with deficit spending so that they appear wealthy.

    Wealth should not be a goal. What do you intend to do with that wealth? Acquire more wealth? Have a reason and purpose for acquiring wealth.

    Being financially free – from your job for example – would be a goal. Acquiring wealth is one strategy that you can use to reach that goal. Ditto for a goal of being a philanthropist.

  9. Astin on September 11, 2008 at 12:32 pm

    I’ve never understood the need to keep up with the Joneses. I was raised to see credit cards as a means of delaying payment until the bill comes in so the money can work for you for an extra month, not as a means of buying things you can’t afford.

    As for CNBC – We’ve got it on all day at work, and it’s really going downhill. They’re a bunch of doomsayers on Monday and cheerleaders by Friday. It’s a terrible channel for any long-term investor to watch… pop financial news.

  10. Optionsforstoctocks on September 11, 2008 at 12:46 pm

    Wealth and income are two different concepts. A person may be wealthy (by net worth) but may not be able to generate enough income to support its lifestyle as you mentioned 24/7 work support himself/herself.

    Millionaire is by definition: your net worth has six zeros and above, that is, $1,000,000 +

    Show off is bad but if it becomes you lifestyle then you have to look it from different perspective. Looking at three out of four of the wealthiest persons in the world, this is my observation:

    Warren Buffet still lives in the same house. He is the wealthiest but his income is only 100,000.00 per year (Berkshire does not pay dividend to its shareholders). He has the simplest lifestyle. Most of his wealth is allocated for philanthropy.

    Bill Gates started to show off with his extravagant house that he build but later on mellowed down and does not show off any more.Most of his wealth is allocated for philanthropy now.

    Laxami Mittal loves to own big and expensive homes. Other than that he is pure businessman and does not show off.

  11. on September 11, 2008 at 1:04 pm

    Hey FT – thanks for the link.

    It is worth noting that if you have bad personal finance management skills, it doesn’t matter if you have $1,000 or $1,000,000,000 – if you can’t create a budget and learn the other skills of money management you’re sunk.

    If you look at athletes and entertainers, they are routinely in trouble for spending AT their means, not WITHIN their means. Trump had to bail out Ed McMahon’s house. McMahon made millions upon millions and still had a mortgage? He didn’t insure his income (I’m guessing) because once he broke his neck and couldn’t work he couldn’t pay his mortgage. That’s crazy.

  12. FearLES on September 11, 2008 at 1:50 pm

    I think you want to strike a nice balance of being satisfied and content with your current situation but still wanting, thus giving you some ambition, to improve on your situation.

    Enjoy the moment but still think of the future.

    The definition of wealth that I like comes from the Rich Dad books and that is:
    When you have enough passive income to cover your expenses, so that if you quit your job today you could live your current lifestyle indefinitely without income.

    It would be nice to be “rich” but what I most want is to be wealthy and NOT have to work and to have time to really enjoy life and “work” when and how I want.

    $1,000,000 in assets is a nice number but it is not rich, it is upper-middle class and not necessarily wealthy.

  13. Dividend Growth Investor on September 11, 2008 at 2:10 pm


    I hope that this spending is not creating a bubble. If it is, then the US economy will start going down dragging along with most developing countries like China and India who will suffer huge recessions.

  14. Canadian Dream on September 11, 2008 at 3:44 pm


    Your depressed because you want to be. Your looking at things that way rather than realizing we live in one of the best countries on the planet with lifestyles that are the envy of the rest of the planet!

    Why compare ourselves to those above us (less than 5% of the population) when there are WAY more below us (95%+)? Stop taking your life for granted and realize what we have. Wealth isn’t measured in a stuff or money, but things with no dollar values.

    Stop wanting more and find that enough state. It’s a moment of Zen like time where the world for just a second or two is perfect. Live in those moments and forget about wanting more. Want what you have and you will always be happy.

    Ok, I’m done ranting.


  15. Gates VP on September 11, 2008 at 4:18 pm

    Hey FT, the “comparative wealth syndrome” or “keeping up with the Joneses” is a well-known effect.

    The average person is fundamentally focused on getting ahead which inherently means that we are comparing ourselves to others (you have to be ahead of someone). This is part of a very low-level “me and mine” survival instinct. It’s likely genetically hard-coded.

    By this standard there can never be enough wealth.

    The next “level up” on the survival instinct chain is actually attempting to generate wealth at the community level. Of course, this continues for ever-increasing sizes of community (city, state, country…)

    The question of “enough” now simply becomes a question of scale.

    Tim: Want what you have and you will always be happy

    And this is one of humankind’s great dichotomies. Wanting what you have will make you happy, but it will also stop you from growing. The world is built on the dreams of those who wanted bigger and better things and humans may never really know “enough”.

    The problem may not be “Keeping up with the Joneses”. The problem may be that doing so is stopping you from being happy :)

  16. guinness416 on September 11, 2008 at 4:20 pm

    CD, in case it wasn’t obvious I was being somewhat facetious. I’m not really depressed, and neither do I overspend or live materialistically. (Also, I chose to live in this country rather than came into the world here as accident of birth; my family and my inlaws would be ecstatic for us to choose to live in Ireland or Bangladesh with them if we thought it would improve our happiness quality of life).

    I’m just drawing conclusions from (some of) the attitudes and lifestyles of (some of) those around me who I’ve seen overspend. “It’s advertising” is a wee bit simplistic for me.

  17. Cannon_fodder on September 11, 2008 at 5:37 pm

    I’ve never been about name brands or having more than people around me. Part of that came from my upbringing. Both of my parents had difficult childhoods (my dad was in the UK during WWII and went through the food rationing) while my mom was raised in a foster home. They never put emphasis on buying for appearance.

    Unfortunately, my mom remarried a person who was a slave to appearing rich. The end result is he let his life insurance lapse, died and left my mom in debt.

    My dad remarried, has never done exceedingly well, but better than the average person, but is approaching 70 and according to he and his wife, will always be hampered by a mortgage.

    I told my wife that I would not let that happen to us – we would enjoy life now, but also be responsible and forward thinking with our money. The accumulation of wealth for us is simply about choice – so that financial considerations become less of a concern as we grow older and can determine our fate. I don’t want to be subject to government handouts or charity of others – I want us to be able to control our destiny.

    I take a perverse pride in living and appearing well below our means. Even though we have above average income and net worth, I still use coupons, look for deals, don’t buy unless it is on sale, etc.

    We see so many people, especially young people, pursuing the image without thought of how much more difficult it will be down the road for them to achieve financial independence. And, there is the additional strain it can have on your relationship with family and friends.

    We are fortunate to be able to have a balance. We can enjoy today without sacrificing our dreams of tomorrow. But, I realise that is not the case for many, many people. Hopefully, they achieve happiness through family, friends and health. In the end, that is all that will really matter.

  18. Chris L on September 11, 2008 at 8:26 pm

    I routinely simplify my life. Throw out useless junk and also give stuff away that I either don’t use or will never use (usually gifts). I live well below my means and understand that appearance of wealth actually means you have less money (and are merely supporting the person that sold it to you). I drive a blue dodge van because I got it for free. It’s ugly as shit, but I still have more money then the guy that borrowed his BMW next to me. I’d rather have all the time in the world then all the stuff in the world….well that’s a bit of a catch since I could sell all of it to and have both. I guess the point is that once you have enough money to server your choice style of life, then you are wealthy. To me this is 50k/year passive (without lifting a finger). From there I could service a house debt, a car debt and do as I pleased. To be truly well off I would need 100k/year passive. My immediate goal is to get to 50k then I’ll shift that to 100k but I don’t think I will reach that until I’m into my 50’s. For right now 35ish for 50k is reasonable and attainable.

    All this being said, there is a true level of power that comes with having flashy material possessions and so day, it would be nice to experience that envy that everyone has for the guy with the nice stuff. If I never get there though, I can live with that. I’m happy with free time…you can never be at the top, there’s always someone with more money or power or land, or stuff than you!

  19. MultifolDream$ on September 11, 2008 at 10:37 pm

    How much is Enough? Different number for different people, but I guess in most of the cases it’s never enough.
    I agree with some of the comments that we tend to see people’s wealth through their spending. But as the famous phrase from an old movie says “The Owls are not what they seem”

  20. Thankful For Fools on September 12, 2008 at 1:59 am

    Seriously, it can be upsetting to find that so few people can simply be happy with being successful for their own sake. Too much of everything we do is based on how it will be perceived by our peers.

    I personally try to follow the “appearance of average” mentality. It relies, quite basically, on never standing out. I don’t have the least, and I don’t have the most. Perceptively.

    It’s working so far.

  21. Scott on September 12, 2008 at 8:59 pm

    Problem with keeping-up-with-X, is that who ever is doing the chasing, as it were, is trying to live someone else’s life instead of their own. They are trying to fulfill the material hopes, dreams, aspirations, etc. of a completely different brain. It’s common for people to just not know what they truly want out of life (or themselves) so it’s easier to just do what the neighbour is doing.

    And if you are trying to compare yourself with someone whose primary goal is to attain as much money as possible (means not matter, just the end result), then you are really in deep doo-doo!

    That bit about the way in which we compare our lives is true. Why do we never compare “down the ladder”? Is it because our society tells us that it’s bad to look down on someone, but good to look up to someone? Interesting, all the psychology.

    But back to money. For me? I don’t know. Five million? Takes a lot these days to pay off a mortgage and sustain the current family lifestyle until death.

    Okay, maybe only three million.

  22. Mr. Archanfel on September 13, 2008 at 1:36 pm

    I think the biggest question is whether a person enjoys his/her spending. For example, I think three things are extremely wasteful:

    1. Life insurance. It simply does not make mathematical sense most of the time.
    2. Traveling. Don’t know why people drag a bag to see a place where they can easily see on TV.
    3. Having kids. Huge investment, little return and very high risk.

    Yet these things are invaluable to a lot of people.

    On the other hand, I like to eat in restaurants, I collect certain silly things and I drive a lot. I am sure they seem to be a total waste of money to most people, but I enjoy those. (I do feel a bit guilty about the last one, so I am buying an electric car as soon as one comes out).

    My point is that we should be careful about being judgmental when it comes to spending. In the end, money is for our enjoyment. As long as a person enjoys his/her spending, even just for the moment, who cares where they spend their money.

  23. Ray on September 13, 2008 at 8:53 pm

    Agree totally with Mr. Archanfel. I used to think that some of my friends are silly for spending so much money on gadgets like ipods or iphones. (Yeah, no matter what the Apple fanboys out there say, I do _not_ see what’s such a big deal about ipods.)

    But then I realized that what they spend on gadgets, I spend on food, since I really enjoy eating good food. So as long as one is saving wisely and live below his/her means, how it is done is really up to him/her.

  24. Jon Kepler on September 14, 2008 at 2:24 am

    Some people choose to view life as a competition. Beating someone who was formerly beating you can be a source of happiness. It sure is in business! Shareholders expect nothing less.

    Different people see things different ways, but I don’t think the desire to win should be assumed to be a negative. Most successful people eventually learn to enjoy what they have while “staying hungry” for more at the same time.

  25. Ray on September 14, 2008 at 4:57 am

    Jon, I couldn’t agree more. Like I mentioned in my first comment in this thread, I like to keep friends who tend to keep me on my toes. I am driven and competitive by nature. A lot of people misunderstand that as being ungrateful, greedy, etc. What they don’t understand is that I am totally grateful where I am now. I just want more :-)

  26. cannon_fodder on September 14, 2008 at 9:22 pm

    Mr. Archanfel,

    I’ve seen the Grand Canyon on TV and (just last year) in person… there is no comparison. One of the most awesome sights I have ever seen.

    I’ve seen the California coast on TV and in person… Hawaii, Shanghai, Niagara Falls, London, etc., etc. There is no way I could be satisfied just watching them on TV.

    In fact, just take me to a Caribbean beach, plop me under a palapas, let me feel the warm breeze and hear the ocean waves – that is heaven and there is no experience that can recreate that in spite of HDTV and 7.1 surround sound!

    As for having kids, perhaps some people don’t measure pros/cons purely on dollars and cents. I can completely understand why some people don’t want any, and some people can’t imagine their lives without kids. The unfortunate part is that sometimes people who should have children don’t and some that shouldn’t, do.

  27. WittyArtist on May 24, 2011 at 8:42 am

    I think the most dangerous and stupid thing one can do is to hold a grudge against somebody. Not only it poisons their mind, but also undermines the self-esteem. Not to mention that they cannot focus anymore on their thoughts and wishes. They continuously struggle to compete with the other. But why? Life is not a contest. You have to know your purpose and then work for it, build/create your own story. Things will feel much better.

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