Don’t Go Broke Trying to Look Rich

Professor stressed about finances

February 1, 2022

Have you ever looked at a friend, family member, acquaintance, or even just a person on the street and thought, “I wish I were as wealthy as they are”? What was it that drew you to the conclusion they had wealth? Maybe it was a luxury vacation they took, the brand-name clothes they wear, or the expensive car they drive. Those things make them look like they have all the money in the world to burn through. But is it really the case?

The Hidden Truth

The truth is, it’s hard to know whether someone is financially healthy or not because we base our assumptions only on what we see the other person doing, wearing—spending their money on. Those assumptions can make us think, “I want to go on another vacation. If they can do it, so can I!” The cycle then starts—you want to fit in, you have a fear of missing out on something your peers are currently experiencing, so you start doing what they’re doing and spending what they’re spending, regardless of the cost. You decide instead of buying a used car for $7,000 that you can pay with cash, you want a new vehicle like your friend just got, so you get a loan for $40,000. It looks nice, right? You look like you have money because you drive a nice, new car. But is it really the case now that you’re locked into a loan with 7% interest that you’ll be paying for the next ten years?

The Pressure to Keep Up With the Jones’s

The pressure we all feel to impress society is real. Everyone wants nice, good-quality things. It gives us a sense of pride and accomplishment. But what happens when the pressure starts to take over and we make decisions that are more harmful to us just because it looks like we’re doing great financially? We can create a cycle of buying things we don’t need, maybe putting things on loan or credit, just to impress people around us. Often, we start thinking we’ll be happier if we just had these nice things as other people do, but it’s not the case, especially when we can’t afford it.

“Wearing unbranded and cheap clothes doesn’t mean you’re poor. Remember: you have a family to feed. Not a community to impress.” —Emma Watson

If you feel the pressure to go broke trying to look rich, you’re not alone! Try your best to use intention with every purchase you make, and mindfully ask yourself if it aligns with your goals. There’s nothing wrong with owning good-quality things or enjoying some of life’s luxuries, but there is something wrong with putting yourself in financial harm to impress others.

author avatar
Tre Bynoe

The information contained in this report was obtained from sources believed to be reliable; however, we cannot represent that it is accurate or complete. This report is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell any securities. The views expressed are those of the author and not necessarily those of Credential Qtrade Securities Inc. Mutual funds, other securities and securities related financial planning services are offered through Qtrade Advisor, a division of Credential Qtrade Securities Inc.

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