Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like. — Will Smith
Keeping up with the Joneses shows its ugly head with new avatar in every generation. It’s got a face lift now under the new name — circle of friends.
I went to lunch with a close friend of mine at work. Our conversation swiftly turned into my favorite topic — how countless celebrities screwed their financial future after earning millions by filing for bankruptcy.
Only those celebrities know how to lose millions. Albeit, it’s their esoteric turf, I was surprised by the rationale my friend used to explain the financial demise of this elite group of people.
Friend: Do you know that Evander Holyfield is at brink of bankruptcy filing? His mansion has been foreclosed. He owed $14 million to the bank. He owes over $200K to uncle Sam, and over $300K in child support.
Me: Wow! He is a poster child of how not to keep up with the Joneses. How can you lose several hundred million dollars? You have to be a money fool to lose millions of dollars.
Friend: Well, even celebrities have to keep up spending to be within their circle of friends. We all are social creatures.
Me: Aah, circle of friends. Sounds like a new name for the same bad habit of spending what you don’t have. No wonder that luxury malls are thriving while K-mart and Sears stores are rare to find.
Friend: If you are a rookie basketball player making $500K a year, and if you play with Kobe Bryant, you still have to spend to be in Kobe’s circle.
Me: Why? Why can’t you practice while Kobe is partying? He is a star, and you have yet to become a star. What’s wrong with this picture?
Friend: You have to show that you are a team player.
Now, that’s an anecdotal example of how keeping up with the Joneses has become a fast lane to financial fatality not just for the celebrities but also for many of us who are trying to display success without achieving it.
Every dollar spent to keep up with the Joneses dies a premature death. Instead, if you nurture that dollar by investing in its future, it will become a faithful guard of your retirement. It’s that simple.
You don’t have to show off to anyone, or to prove anyone that you are worthy of their company.
Showing wealth off isn’t the backbone of our guiding purpose; showing wealth off is the biggest drag on our guiding purpose.
One of my heroes, Warren Buffett’s life is a living proof of how not to live like Joneses even when you are filthy rich. How do you rationalize the richest man on the earth still living in a small 3-bedroom house that he purchased fifty years ago? Warren Buffett never travels in a private jet despite the fact that he owns the largest private jet company.
His character and way of life speak volume about his greatness. This is the man who spent his personal time investigating a $4 line item on his tax return to hunt down the specifics of it while giving away billions of dollars to Bill Gates foundation.
It is rare to find the richest man on the earth living without luxuries that we want to possess even by mortgaging our future. He has demonstrated that while valuing the worth of money is vital for our ingenuity and success, money shall never become the object and end all of our motivation.
I’m an avid admirer of simplicity, but I’m an even bigger fan of the man who has mastered the greatness by living and breathing simplicity amid an ocean of wealth. Now, that’s the celebrity your want to follow and learn from. Do you agree?
Wealth is a tool of freedom, but the pursuit of wealth is the way to slavery. — Frank Herbert
Elsewhere:
Keeping Up With The Joneses In The Digital Age @ Modestmoney
Go beyond keeping up with the Joneses @ Barbarafriedbergpersonalfinance