Why a Wrong Perception of Who is Financially Wealthy is Deadly

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I could remember a couple of stuff about a misconception of wealth back when I was in elementary until I was a teenager. I could remember how I envied some of my classmates for their bragging about this and that, their so-called "wealth", and those useless "leaving the uncool kid out" which I felt that I was. It was pretty much a stupid thing to say I'm "poor" because I didn't have the cool video game consoles and the other hand it. Others brag about their cars such as having a Pajero or a Mercedes Benz. Others even brag about their thick wallets while I hardly had a thick wallet because my parents were thrifty. If I overspent--I had to deal with having less money. I had to learn how to save as a teenager up to my college days because of limited allowances from thrifty parents.

I could think of these reasons vs. rebuttals that I've learned in life when I showed my jealousy:
  1. I used to say that somebody was richer because his or her car was luxurious. I wasn't too happy that my late paternal grandmother gave me a Mazda while others had luxury cars. I was later told it's possible to have a BMW while being Broke Without Money or BWM.
  2. I used to say that somebody was richer than I was because they had thick wallets to brag about. However, it's possible to have a thick wallet but to have a very thin bank account. A thick bank account is more important than having cash to flaunt. You can have cash to flaunt but you could be buried in debt, the bank is already ready to mortgage your properties, and other similar financial troubles.
  3. I used to say that somebody was richer because they lived in huge houses. However, it's possible to build a huge house on debt rather than with debt that you can't pay. One can build a huge house but it could be mortgaged by the bank sooner or later.
  4. I used to say that somebody was richer because of their bragging. However, one can always brag to have a million of PHP (or any currency) but not have it. If you've got lots of money then it's best to shut up about it.
  5. I used to say that somebody was richer because so and so had plenty of branded goods. However, it's possible to have the latest iPhone but not to have savings. It's possible to have bought a pair of rubber shoes worth PHP 7,000.00+ but not have that much money to afford it. 
There's the statement of don't get poor trying to look rich. Some rich people end up becoming poor because of their luxurious lifestyles. Some poor people stay poor or even become poorer by trying to look rich--all the while they blame the rich that they're poor. The brand consciousness is more about trying to impress others. However, Chinese businessman Jack Ma never copied others blindly. Yet, it happens that some people (as far as I've observed) tend to copy what others have. Somebody has the latest iPhone? Somebody has a brand-new Mercedes? People are going to this super expensive school? They decide to buy it even if they can't afford it. If they can't afford it--why not borrow money by any means necessary? Such thinking leads to the fatal debt trap.

The mentality that the best is the most expensive is really another debt trap failure. I was reminded of how went to a fancy restaurant and wanted to throw the food at the owner's face. The reason was that I spent a lot of money for a meal and didn't get satisfied. I felt like I should've decided to eat at a more affordable place than that fancy restaurant. Sometimes, an expensive school may just be a rip-off if the quality of education turns out to be a fluke. Yet, people think that an expensive lifestyle is what makes one wealthy when it's not a real indicator of wealth.

The real indicator of financial wealth isn't the lifestyle--it's the amount of money in the bank account and investments. A person who has millions of pesos in the bank is bound to be richer than a person who has a PHP 1 Million car but has a lot of debts. A person who has won big in the stock market and re-invested the earnings in other places (such as other forms of mutual funds and trust funds) may not be driving a Mercedes Benz. The person may be driving a car labeled as"pang-taxi" (just for a taxi) but the person may have billions of pesos in their net worth. It's all about the net worth that a person has that makes one rich.

The wealthier you become, the more you ought to shut up about your net worth. Those big businessmen talking may not even talk about their actual net worth. Some people are rich but not famous. Some people are famous but are in financial nadir behind the scenes. Some people are probably just faking it about their so-called millions of pesos or a nice house. For all you know, they're actually lying on Instagram or Twitter about their so-called wealth. For all you know, the car belonged to their boss, the house belonged to their boss, and they owned nothing from what they claimed. 

Financial wealth should be taught even to rich children. Some rich families eventually collapse from trying to flaunt their money. Flaunt your money to the world and expect to lose it. Some rich families stay rich because their patriarchs not only experienced poverty--they also made their family work like every other employee in their own companies. Financial literacy must also be taught to the poor so they can get out of poverty. Sure, not every poor person will become rich through financial literacy. What's important is to have some wealth (even if one doesn't get wealthy at the end) to be able to meet one's needs and to realize wealth doesn't come so easy either. 

References

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

"6 reasons spending money to impress other people is a pointless waste"

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