Skip to main content

Nobody Gets Rich Owning Plenty of Nice Stuff


I could remember growing up having thrifty parents while surrounded by people who had extravagant parents. It was when I studied in a rather pricey school that I felt so out of place. There were the "cool kids" who were spoiled brats. One person I knew was easily given what he wanted. Another I knew felt he was cool because his parents gave him what he wanted. I remembered an idle talk that we had, such as how I was bullied for not having the nice stuff other people had. Another said that so and so was richer because they had this and that. It was common to say so-and-so is the rich kid because he or she had the latest video game console or a luxury car. It made me so green with envy that I wanted a Limousine or a Mercedes-Benz just to impress those spoiled brats. My thrifty parents said no to such requests--telling me one day I'd understand.

A conversation I had with my mother was based on the people I envied. I gave reasons that so and so was rich because:
  1. They have very thick wallets, while I have a thin wallet. My parents gave me a very limited allowance, and I had the tendency to overspend.
  2. They are brought to school in a luxury car, while I was driven in a Mazda.
  3. They have rather luxurious houses to live in.
  4. The dumbest reason was that they keep talking about how rich they are. Someone even said he had a million pesos last Christmas--something I dismiss as childish bragging these days.
However, my parents would only shoot down such claims and say such people may be rich now, but lose it later. Then, I thought of what they would say (or what my late paternal grandmother who was also rather thrifty) said the following rebuttals:
  1. Parents who give very generous allowances to their children may have very thin bank accounts. They may have more debt than money to pay the debt. The bank may no longer be their friend.
  2. It's possible to be driving a BMW or a Mercedes-Benz, but one's broke as a joke. It so happens that someone who had a Pajero later ended up borrowing tons of money to repair it.
  3. It's possible to live in such a big house, which will only be mortgaged by the bank if you fail to pay it.
  4. A prudent rich person keeps silent about how much money they have. Some who brag about their so-called wealth don't have it.

Savings opportunities vs. branded goods

I once owned an Apple product and never wanted another one due to the cost of repairs. I had it junked, and I no longer wanted another one. I don't plan to get a Mercedes-Benz is due to the cost of labor is much higher. Having rubber shoes that cost PHP 7,000.00 is a real rip-off compared to if you bought regular rubber shoes. Someone I knew bought rubber shoes that were expensive to brag about, even if he wasn't wealthy. These products aren't necessarily better. In fact, I remembered my Apple product was gone with the wind during a lightning storm. Meanwhile, I had very little cost to repair my Samsung laptop (which I might replace soon), which I used during my MBA days.

However, we've got such people with the wrong perception of quality based on price. It's often said that the best is the most expensive. It's like the best school is the most expensive school. However, the same person who once said it ended up transferring to a high-standard public school instead. This is one thing Investopedia says about the problem of branded goods psychology:

Are Higher-Priced Goods Really of Higher Quality?
One possible explanation for this is the human tendency to overemphasize the positive elements of a product and ignore its disadvantages. For example, in the case of Apple Inc. (AAPL), consumers wait overnight for new releases of iPhones, iPads, and Mac computers. This despite the fact that Apple products are not technologically unique or superior.

In fact, Samsung makes phones with better features (compared to most models of the iPhone), and Microsoft Corporation (MSFT) and Xiaomi make phones that typically have a cheaper price point. Nevertheless, Apple experiences a high degree of brand loyalty and seems to break sales records year after year.

Because some people perceive non-luxury goods as inferior simply by virtue of them being non-luxury (and not on the basis of their characteristics or qualities), they also come to the irrational conclusion that higher priced goods are of better quality. Contrary to the evidence, they may believe that you get what you pay for, regardless of whether the goods are actually better than their more affordable counterparts.

I personally am willing to pay more for better quality. For example, I was actually willing to spend PHP 40,000+ for a new Samsung until I realized that the Xiaomi POCO M4 Pro phone had better battery life at a lower cost. If I spent money on a new iPhone XS, which came out a few years ago, worth PHP 69,999.00 up to PHP 86,990.00. Let's just say that I decided to purchase that phone over the Xiaomi, which I purchased just now. Pretty much, I spent PHP 12,490.00 for my new POCO M4 Pr,o which gives me a savings of PHP 74,500.00. I could afford to buy the expensive phone, but I feel saving it for a rainy day is better. Having PHP 74,500.00 for a rainy day is better than having a nice phone but not having an extra for a rainy day. In the end, if I dropped that iPhone, it would be more painful than if I dropped my POCO. I wouldn't have so much pain buying another phone worth PHP 12,490.00 over buying another super expensive phone. The same goes for I wouldn't mind paying the fees at a Toyota repair shop for a luxurious-looking car rather than paying extremely high fees for a branded car.

Avoiding luxury goods when you can is a good thing. Instead, the best thing to do is to have a balance. Be willing to spend more for quality instead of perceived quality. It's like I decided to get a slightly more expensive POCO phone so I can have better, cooler features. Somebody might be cool with the new stuff, but the new stuff isn't branded. Sometimes, a nice bag that's sturdy isn't a branded good. Sure, that bag may cost less, but it may contain plenty of money's worth. Doing so can be the start of having higher savings.

The real meaning of financial wealth is never about the stuff you own or having an expensive lifestyle. Rather, it's all about having plenty of legitimate money. Though this isn't always about being wealthy, but making sure one has the money to meet one's needs and enjoy life. People with lots of money (whether they are wealthy or not) usually shut up about their wealth. More often than not, those who hardly have money are trying to impress others with money they probably just borrowed from others to make themselves look rich. 

References

"The Psychology Behind Why People Buy Luxury Goods" by Vanessa Page, Reviewed by Ebony Howard (Updated: February 13, 2021)
Labels:

Popular posts from this blog

The Irony the Philippines Starts the Christmas Season in September BUT Many Filipinos Love Last-Minute Christmas Shopping

  Uproxx As Christmas is just around the corner--I feel more stress coming in! It doesn't help when people try to use the late Andy Williams' "It's the Most Wonderful Time of the Year" to try and skip the problem. It's already known that most Filipinos love to start Christmas in September . However, the irony is that Filipinos start Christmas early but do their Christmas shopping late. If they began the Christmas Season early, shouldn't they think about what to do before December strikes?  Two years ago, I wrote a post discussing last-minute Christmas shopping . Many Filipinos tend to do last-minute Christmas shopping. They had all of November (when the Christmas sale usually begins) but why do the Christmas shopping in December ? One of the things I blame is the one-day paycheck lifestyle (see here ). It can be observed that many Filipinos never learn to prioritize more important things . One can get their stars when they see their paychecks. However, the...
Read more

Is Christmas Toxic Positivity a Cause or an Effect of the Philippines' Lack of Progress?

Lessandra When it's Christmas, it's so easy to think of the song of the late Andy Williams, "It's the Most Wonderful Time of the Year". The music itself reeks of toxic positivity,  whether one likes it or not. It's a shame, really, because December 20 was also the anniversary of Asia's Titanic, the sinking of the Doña Paz ! We live in a society that somehow never learns from its mistakes, like a person who's stuck in gambling debt, is still hoping to get rich gambling . Despite all that, Christmas toxic positivity still abounds in the Philippines. We still have a lot of ongoing bad habits, such as starting Christmas in September and then doing last-minute Christmas shopping during the week of Christmas. That's why every time I drive on the road on Christmas, I tend to shout, "Isn't it any wonder why the Philippines never improves?" The term Noche Buena has evolved over time . For some, it's simply the Christmas dinner. However, so...
Read more

Christmas Toxic Positivity May Be Your Biggest Holiday Financial Killer

Christmas is just around the corner, isn't it? It's easy to tell me, "Stop being a Scrooge! Lighten up! It's Christmas!" Some people can't tell the difference between positivity and when positivity becomes toxic . If you think about it, toxic positivity is defined as: ...the belief that people should maintain a positive mindset no matter how dire or difficult a situation is. While there are benefits to being optimistic and engaging in positive thinking, toxic positivity rejects all difficult emotions in favor of a cheerful and often falsely positive façade . Every time I talk about Christmas foolishness (read here ), it's always pointed out that I love being negative. Honestly, there are times I'd rather be negative than to be overly positive. I always talk about mentioning the silly notions that my countrymen have like, "If the situation is bitter, just add sugar (read here )." In Cebuano, it's said, "Kung pait, butangi lang ug asu...
Read more

Can Anti-FDI Proponents Prove Their Claim That Economic Liberalization Will Just Benefit the Filipino Oligarchs?

The same old narration has been made over and over again . I'd dare say that the narration out the Facebook pages of the likes of Atty. Teddy Casiño, Atty. Neri Colmenares, Kabataan Partylist, League of Filipino Students, Migrante International, IBON Foundation, etc. are more or less the same. It's already a broken record based on the facts that they've been refuted. I've read the book From Third World to First . I guess Migrante International hates that book because Singapore is often associated with the execution of Flor Contemplacion, at least on their watch. What they're doing is nothing more than still hating Japan, Germany, and Italy because of the Second World War. I'm not surprised at another lie that's often repeated--economic liberalization (or 100% FDI shares ownership) will only  benefit the oligarchs . I guess it'll be easy to nail on me because I'm not a summa cum laude and Rep. Raoul Abellar Manuel is and he's a graduate of the Uni...
Read more

External Validations, like Masters and Doctorate, Mean NOTHING with a LOUSY Education System

I have the tendency to use my MBA as a license to avoid criticism. It's a real problem that some people use their credentials and/or academic achievements to try and win an argument. One incident I wrote about was Rep. Raoul Abellar Manuel flexing his "smarts" by using his cum laude degree to win the argument . It was all about how I would often say, "You're the moron because I have the MBA and you don't." There are times I felt like taking an MBA would make up for my "moral shortcomings" during high school when I was barely passing (and the passing rate was 80% , which is rather high), that I wasn't having honors, and that there was this saying, " Thou grades shalt determine thy future! " That, of course, has led to the reality where cheating is prevalent .  I wanted to make a review. I took my MBA in 2011 and graduated in 2014. I always felt that the MBA program was what I needed to become "invincible". It was also at ...
Read more