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The Magical Side of Wealth: Now you see me, now you don’t

Updated: Oct 4, 2022


If you see someone driving a car worth $100,000 you might feel a sense of envy, but let’s stop and think about that. Maybe it's not a car that you desire, but it's a luxurious holiday that you see pictures of online, or a beautiful home, or something else entirely. That's actually beside the point though. Let's just say it is a nice car but let's pause to realise, in that moment all that is known, to be verifiably true is that that person has a car worth $100,000. Now, that almost certainly means they now have $100,000 less than they did before buying the car (or they have $100,000 more debt). That’s the fact.



Here’s what we don’t see though:

· Their bank statements

· Their happiness

· Their investments

· Their life satisfaction

· Their relationships and well-being


Wealth is much more based on abstract stuff rather than the material things someone owns and it's difficult to see something that isn't visible to the human eye. Think about the saying, “you can’t have your cake and eat it too.” That’s exactly how money works! The more you spend, the less money you have, and the more ‘stuff’ you accumulate instead. There are many people in the world that look modest but have more money than they would ever need. On the other hand, there are many on the opposite side that have flash lifestyles but live pay check to pay check. It's actually more common than you might think, and a good example is found in a book called, The Psychology of Money, where the author describes two men:

Ronald Read was a janitor his whole life, who saved his money whole life, spent it carefully and died with more than $8M in his accounts. Richard Fuscone was a Merrill-Lynch CEO, Harvard educated MBA, who lost everything. Read was patient, while Fuscone was greedy, and that eclipsed the massive differences between the two.




So, what can you do about your spending?

The best thing to do is start saving something to an account that is out of your everyday view. If you pay yourself first, then your spending will automatically follow. This is the best solution to adjust your spending, without having to re-prioritise your entire budget.

You can also choose your peers carefully, because you are not the Joneses. This may sound cold, but remember it’s hard to not compare to others around us. If you spend most of your time around people who either are millionaires or spend like they are millionaires, you’re spending is likely to be similar. If you spend most of your time around Nepalese monks, you are less likely to buy a Ferrari. This makes sense because how would you learn to spend if you didn’t have any role models or people to compare to? Our peers determine a lot about our spending habits. So choose your peers wisely, because you’re also inadvertently choosing your spending too.


Celebrity icon, Rihanna, has more money than most of us (not necessarily more wealth). The issue for Rihanna is that she almost declared bankruptcy and she tried to sue her financial adviser who replied with “was it really necessary to tell her that if you spend money on things, you will end up with things and not the money?” – In this case, it seems like the answer is, “yes”. Even if it’s not necessary, it’s still a good reminder.

Think about it, wanting to spend a million dollars is literally the exact opposite of wanting to have a million dollars. Wealth gives you the choice (but not the obligation) to spend on something later - Anything (here's an article that talks about why saving now and not spending until later has an unintended benefit). Wealth provides flexibility, options, and the opportunity to grow and do more in the future.


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