Are you Afraid of Looking Poor?

November 25, 2013 — 17 Comments
Getting into my Ferrari in China

Don’t mind me, just getting into my Ferrari!

One of our biggest motivators of buying things we can’t afford is the fear of looking poor.

How embarrassing it must have been for me to drive around in a 1993 white Chevy Lumina with a maroon interior – so embarrassing that I thought the better decision was to take out a $28,000 car loan just so I wouldn’t look poor anymore. But guess what, although I might have looked like I had money with the new car, now I was officially poor!

My car ran just fine, but I made excuses to justify buying a new car. I needed something more dependable – even though my trusty Chevy Lumina never left me stranded on a Dallas highway. It wasn’t the fear of a break down that fed my bad decision, but the fear of simply appearing poor.

Are you afraid of looking poor?

I wasn’t alone in my fear of looking poor. According to a Wall Street Journal survey of 2,000 people, 35% of respondents said that in order to qualify as being rich, a person must drive a car that costs $75,000 or more. When in reality, Thomas Stanley found “the median price paid for the most recent motor vehicle purchased by a millionaire was $31,367”. Most of us think a car is a good indicator of wealth – and a good way to not look poor.

Our fear of looking poor oftentimes make us poor!

Even Benjamin Franklin made the same observation when he said, “A man being sometimes more generous when he has but a little money than when he has plenty, perhaps thro’ Fear of being thought to have but little.” It was the same 200 years ago as it is now!

Don’t be afraid of looking poor, it might be your best chance of getting rich.

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17 responses to Are you Afraid of Looking Poor?

  1. Amen to that! When I lived in another state, there was a saying about “acting poor”. What that meant in the local vernacular was the “acting poor” would have big trucks, huge TVs but their child’s wouldn’t have any shoes (metaphorically speaking).

  2. There are times I look around and have to wonder about the state of the world. I use a very crappy phone because it does exactly what I need it to do. I can make phone calls with it. I have an ipad because it does what I need it to do. It is my portable office.

    I made these decisions through research and testing. My daughter has a google nexus. I tried it out and found that it required quite a bit more of my time to get it to work the way I wanted it to work. The ipad is set up and ready to go. I didn’t have to spend my time figuring out the system, it just works.

    The odd thing is because I have an ipad (even though it is only a mini) people see that as putting on airs. Apple is something only rich people can afford. They don’t look at the phone I carry that costs me roughly 20 bucks every three months because I pay for minutes and rarely use it.

    By the same token if I were to whip out an Iphone or even an android phone no one would bat an eye. People seem to be expected to have a phone that costs them an arm and a leg to buy and then pay 40 dollars or more a month for the joy of ownership.

    Maybe it is the view of what is a luxury and what is a necessity? Mobile phones have grown to be such an important part of our society that most people don’t even think of the cost of ownership. This cost of ownership is more than just the purchase price. There is a time and energy cost to always being available.

    Now that I have gotten this far, I am not sure if I have helped in this discussion.

    • That makes a lot of sense Jon – once things become “commoditized” we no longer see them as ridiculous to spend money on… I was thinking about that as we activated our two iPhones again after our trip and realized how much we’re paying for them. One thing I learned on our trip is that I survive just fine with a phone with no internet… heck, we didn’t even have regular phone reception in most places.

  3. So well put, Dan. We sometimes get caught up in comparing ourselves to our neighbors or business colleagues. I was having lunch yesterday with a client and the discussion turned to who owned a smart phone, iPad and laptop. Most people are shocked that I don’t own an iPad. I think they’re neat but I don’t need one. It’s not easy being the odd man out, but who cares?

    • Wow, we’re already to a point in business where it’s weird to not have an iPad?? I still only see them as entertainment because I can’t do any “real work” on them… but of course they’re Apple so they’ve become a fashion item.

  4. I have no problem looking “poor”. The people that are really poor are the ones trying to keep up with the Jones’s

  5. You gotta admit it can be fun to drive an eye-catching car. I used to really get a kick out of driving around in my Mustang. We’re a one car household now, but need to trade in our Escape for an SUV capable of towing a decent camping trailer. We wouldn’t be able to do that with two car payments. Thankfully we just have the one.

    • Jeri – I’m definitely with you, but at this point I’d rather have no car payments!! There’s a reason so many people buy new cars… especially muscle cars 🙂

  6. My mindset is this: if you don’t like it, don’t look!

    Yes, I’m a bit of a rebel. Like Jon, I have a cell phone that I have to buy minutes for, and so rarely use it when it is expensive to do so. However, I like that it is a camera and a camcorder, too, and use those functions. I don’t own an ipad (mini or full size) and I don’t care to. I like my laptop just fine!

    However, I’m also of the older generation. My son has a smartphone and would likely die without it. Ugh. Kids today. LOL

    I’ve never owned a car. I had a child instead. Being a single mom means sacrificing.

    Since my accident nearly nine years ago, I’ve been on a disability income. Not something I’m proud of, but hey, that’s life. You have to make the most out of what you’ve got. Not everyone has money.

    I do have champagne taste. Unfortunately, I’ve got a Kool-Aid budget.

    • Lorraine – what I like best about you is that you never give up. As long as you keep living on your Kool-Aid budget, I think you’ll someday get to drink champagne!

  7. i just converted to a smart phone this summer. I am mostly at a laptop in the office or at home. very seldom do I need internet connection on my phone. And the APPS? well you’ve probably heard this before but most folks use 3-4 APPS out of all the millions they have out there. Games? nope don’t even care for them. Productivity lost? probably. I commute on the bus to downtown so i have about 25 mins. But hey i can sit back and relax instead. So why did i do it? Well I was with Sprint and had 6 lines costing me close to 150 inclusive of those darn taxes. They weren’t ready to give me a better deal. I have been with them for over 13 years.So then i asked about smart phones. Still too much. I told them T-Mobile deal with $50 unlimited data and total for 5 lines was less than what they were giving. They weren’t ready to give me a deal. I walked away and went to Tmobile paying $118. Sprint might have better network but for my use I feel fairly comfortable with the service I am getting. So I did this move b/c i am pretty much getting the voice service and unlimited texting service for the same price at TMobile + some net access. And in the world of consulting (Dan you know this) I was pretty much the last one in the room who got the smart phone. From the youngest college grads from my company to the oldest client employees, I was the last one. I didn’t care. Why b/c I was Breaking Free

    p.s. i already cracked my screen after 3 months of use!

    • Oh man, I can’t believe you finally converted to a smart phone after all of those years… I’m surprised Accenture didn’t make you change 🙂

      So you have six phones – one with data – and it’s only costing you $118/month?? We have two iPhones and pay way more than that!

      • 5 phones all with data. 4g speed for the first 2g. T-Mobile. You are probably paying more for better coverage? Right now I can’t tell too big of a difference in service between sprint (old provider) and tmobile. My mother doesn’t use the data on her phone at all but its cheaper for me to just add her on my plan then go and get a simple phone for her.

  8. Buy what you want, life is short! There is nothing better then the feel of driving a nice car!

    • I can think of many things better than the feel of driving a new car! Also, I don’t suggest you should never buy a new car, you should buy one if you have enough cash!

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