I recently read an interesting and thought-provoking article. It was by a money manager- someone who does investing for others for a living. He talked about an internal struggle he was having. You see, people assume he makes a lot of money. And yes, he’s doing OK. But he lives in a “small” house and drives an older car. The house is right for his family- in size, location, upkeep, etc. He loves the car. Neither, however, fits his image of what someone in his occupation should live in or drive. He worries that some might judge his abilities by his house, car or club memberships. He knows he’s doing the right things- saving for the future, living within their means, and modeling good behavior for the kids. But, do folks realize that- or think less of him. Is it costing him business? Remember though, it’s his image of what should be that’s causing this doubt.
Have you ever struggled with this? I think most of us do at some point. We used to call it “keeping up with the Jones”. As we age, job titles get loftier, incomes go up- so things should get nicer- right? After all, we can afford it, at least while we’re working. How much of this, though, is us comparing ourselves to others? Of course, we don’t know if they can really afford what they have. When I was much younger, folks could/would judge wealth by the car you drove. After all, you had to be able to buy it. But then came leases, and just about anyone could qualify for a nice new car every few years. What concerns me about this struggle is that in an effort to look the part, folks buy houses and cars, take vacations, and put their kids in schools they really can’t afford. Or they suffer “lifestyle creep” to a level they can’t hope to maintain in retirement.
Image- or perception of image- is a powerful force. We judge others, they judge us. I have the book “The Millionaire Next Door” in my reception area. Everyone comments on it. They all know the premise. It’s funny though. The people the book profiles, whom we all seem to admire, spend their lives bucking this trend of image. They don’t look rich. Many people don’t think they’re wealthy. But they’re comfortable- financially as well as emotionally- with their lifestyle. I’m not personally immune to all this. My wife and I have made decisions we feel bode well for us now and in the future. I know the Millionaire book. But still… I help people with their finances for a living. Some have more than we do, others less. But I’m driving a 13 year old van. Should I be driving a Lexus, BMW or SUV? I don’t wear suits to work.
Has that cost me business? Long ago someone in this line of work told me to be successful you needed three things: gray hair, a good suit, and Class A office space. You need to project the image of wisdom and success. All I have is the gray hair. Should I move? Should I dig out the suits?
Living the lifestyle you can maintain forever takes discipline and the willingness to walk your own path sometimes. The rewards, however, can be immense. I encourage you to be aware of your own thoughts and struggles, and be careful in your judgement of others. We rarely know their whole situation. And besides, the Millionaire Next Door doesn’t look the part either.
If you think you’d benefit from an outside perspective of image vs. resources, give me a call. Together we can help make sure you’re on a path to long-term financial security.
Todd Washburn, CFP® // Todd Washburn Solutions, LLC Fee-only financial planning
“Life Planning for Visionary People”
email@example.com // www.toddwashburn.com // 919.403.6633