Money Psychology 9: Wealth is what you don’t see
If you see a Ferrari driving around, you might intuitively assume the owner of the car is rich—even if you’re not paying much attention to them. But what you don’t realise is that many are those who spent a huge percentage of their paycheck on a car.
Rich is defined by the current income. Someone driving a sports car is almost certainly rich. It’s not hard to spot rich people.
But wealth is hidden. It’s the income not spent.
We see the cars people buy and perhaps the school they choose to send their kids to. We don’t see the savings, retirement accounts, or investment portfolios. We see the homes they buy, not the homes they could have bought had they stretched themselves thin.
People are good at learning by imitation. But the hidden nature of wealth makes it hard to imitate others and learn from their ways.Its value lies in offering you options, flexibility and growth, to one day purchase more stuff than you could right now.
Wealth is an option, not yet taken to buy something later.
Spending money to show people how much money you have is the fastest way to have less money.
[The Psychology of Money: Lessons 9 of 18]
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