Our perceptions of wealth

I had a conversation with a friend today about financing college for children.  You all probably know how I feel about that, if not there is a blog in the archive section that will enlighten you.  I mentioned to said friend that I wouldn't lose sleep if my children took on a trade.  A book I read years ago, and still refer to often, had interesting conclusions regarding who millionaires in this country actually are.  They tend to be tradesmen and/or craftsmen.  The book is The Millionaire Next Door:  The Surprising Secrets of America's Wealthy by Thomas J. Stanley and William Danko.  

My friend knows a plumber who he considers wealthy.  Said plumber owns a large house, a couple of boats, and some other expensive toys.  What I found intriguing was how my friend equated the stuff the person had acquired to the person's wealth. Most of us do that....so-and-so must have a lot of money because they own this-or-that.  Actually, that may not be true.  Most of us own big ticket toys with big ticket loans attached to them.  The truly wealthy have gotten that way through hard work and savings.  They don't tend to flaunt their wealth.  I'm not referring to celebrities.  I am referring to your neighbors who may be wealthy.

I remember a couple of years ago when one of my nieces and I had a text-conversation about name brand stuff.  I told her that the fancy bag is a great way to tell someone you overpaid for a purse.  And it just added some more cushion to the CEO's bank account.  The wanna-be's, that's us, purchase name brand stuff for the appearance of what it says about us.  What it says about us is that the marketing machine is doing a great job.  I know I sound cynical because I am cynical.

I know I did a post on "getting what you pay for".  I still stand by that post.  I think there is something to be said about quality products.  What I don't do though is purchase items for the sheer delight in knowing you know how expensive the item is.  I purchase quality products, like sheets and bath towels, that most of you won't ever have the opportunity to see.  When a woman purchases a $300 purse all the other ladies around her KNOW how much the purse costs and we make judgements on her and her purchase.  Not very Christian-like, but that is how it is.

This is a huge barrier to savings, IMHO.  Needing to keep up with the Jones' is detrimental to saving for your emergency fund or the future.  Ask yourself what would happen if you didn't shop at a name brand department store or didn't buy that fancy purse.  There are psychological challenges we all face regarding money.  Where we come from and how we perceive money and wealth play into how we spend or save money.

One phenomena I have observed, very unscientifically (I am sure there is a study somewhere but I haven't looked for it) is the beautiful new cars in low-income areas.  The reason, again IMHO, is probably because the low-income residents equate wealth with owning "stuff."

I use to be that person.  I use to think that I needed to "stuff" to prove I have made it out of the poverty I grew up in.  Not anymore.  The game is on to see how much stuff we can live without.  I much prefer to see how much I can save.  How 'bout you?  Are you still accumulating stuff or have you figured it out yet?