The Millionaire Next Door

Stop Being Cynical: Look at the Heart

Webster’s defines cynical as “inclined to question the sincerity and goodness of people’s motives and actions.”  I received an e-mail in which Will writes:

. . . having a hard time not being cynical about people based on where they live or what types of car they drive.  We go to a church that is considered ‘rich’. . . a lot of people drive the nicer vehicles, Escalades, BMWs, etc. . . . we jump to the assumption that they are hyperspenders not wealth accumulators.  [Our children] go to the church’s school . . . hard to tell them that they don’t need all the status items, North Face, Abercrombie, expensive shoes, etc. that the other children have.  . . . my wife looks at these people and wonders where they get all their money to purchase expensive items.  How do you not become cynical?

In Stop Acting Rich, I reveal what balance sheet affluent parents tell their children who want the expensive consumer products their peers have.  First, never judge the true quality of a person by what can be purchased.  Second, often people who dress and drive as if they are rich are not.

In America, 86% of all prestige makes of cars are driven by nonmillionaires.  There is, however, a correlation between wealth and the price that people pay when purchasing their cars.  But it is not substantial.  Look at it another way.  I recently examined the correlations between the price paid for motor vehicles and the net worth and income characteristics of the drivers.  The respondents (1,340) had annual household incomes ranging from $80,000 to the mid 7-figures.  Net worth ran from $100,000 well into 8-figures.  What percent of the variation in price paid for a motor vehicle is explained by net worth?  10.5%.  Income does a little better: 17.2%.  This means that more than 80% of the variation in purchase price is unaccounted for by either wealth or income.  In other words, you wouldn’t want to bet the farm that the fellow sitting next to you in church who drives an expensive car is a millionaire.  And the proportion of explained variance is considerably less among those who lease their vehicles.

Perhaps it is best said in the Old Testament:  . . . man looks at the outward appearance, But the Lord looks at the heart. 1 Samuel 16:7

High satisfaction in life abounds among those who focus on what is inside a person and not on what they drive, wear or where they live. 

6 thoughts on “Stop Being Cynical: Look at the Heart”

  1. Amen. My ’96 pickup (which I’ve driven since ’96) will likely be the vehicle I’m driving when my net worth hits 7 figs. Most of my employees drive more ‘affluent’ vehicles than I do, but they’ll be employees far longer than I’ll be.

    Your children will embrace what you model. I learned it while riding in my dad’s 15 year old pickup when I was a kid, and then watched him retire very comfortably at 50.

  2. Proverbs 13:7 says it best:One man pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth. Very good article.

  3. And, there is so much more FREEDOM in not playing the brand name “game”. Dr. Stanley, you pegged it-satisfaction is the name of the game that we live. “People” would never know we have money (almost $2 million in net worth) as we live nicely but not extravagently. If I do want something with a “brand name” I buy it used. Once we bought a super quality appliance, second hand and saved thousands. Our children also know how to get the value out of a dollar which is a huge blessing, they are great thrift store shoppers! Great article Dr. Stanley!

  4. Now can somebody PLEASE help me explain this to people from the East Coast? My boyfriend is from Northern New Jersey, and has attempted to explaint to me that I simply do not know how the East Coast (New York, New Jersey) “works.” (I’ve been in the Southwest all my life)

    However, I still find it ridiculous when I’m told that a lawyer must drive an expensive car otherwise they won’t get a good clientbase, that a person must LOOK successfull or they won’t BE successfull. Now I do agree that being presentable is a good idea, however I fail to see why a lawyer will gain any more or less clients if they opty for an Audi over a Kia.

    Am I off-base with this?

    Is it true that unless you look successful, you won’t be successful?

  5. A Lynn, Thanks for confirming my suspicions. I grew up in the wrong part of the country. Unfortunately, those same NJ/NY clowns have been lecturing me from all sides most of my life making it difficult to stay true to one’s contrary inner beliefs. (I think I will anyway.)They don’t drive a 13 y/o car, or have nonlabel clothes, but few have travelled as much. It’s all about priorities. I guess they all made it to millionaire net worth before their mid thirties. 🙂

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