In Stop Acting Rich, I detailed why so many people who are not rich hyperspend. Who are they really emulating? They are merely mimicking the behaviors of people like themselves who are not rich but act in ways they think economically succesful people act. Here is an example of what I mean.
Theo is the owner and CEO of a highly successful dust control company. [A top 20 millionaire next door business category] His first wife died 12 years ago when she was in her mid-40s. Two years later Theo, at the age of 47, married one of his manager’s administrative assistants who was 23 at the time. According to Theo, they have had a wonderful marriage.
Theo told me that his current wife came from a family of modest means. She was an only child, and even when she began working she received heavy doses of “economic outpatient care” from her parents. She spent most of her income on expensive, stylish clothing and accessories because she assumed that by dressing up she was emulating economically successful people.
Early on, Theo explained to his young wife what it meant to be a business owner of the millionaire next door type. Even though the couple could easily afford extravagant spending on clothing and accessories, Theo told her that “we do not live like that.” He added that wearing expensive “uniforms” in the workplace may give their employees-most of whom were blue collar types-the impression that their employer is exploiting them. After this discussion, Theo’s wife realized that she had the wrong idea about the spending habits of the self made rich, especially business owners.
Self esteem is better enhanced by building wealth than by accumulating a portfolio of expensive clothes.