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The pseudo-affluent: If you look rich, you probably aren't
Characteristics of the pseudo-affluent
The pseudo-affluent generally:
- They earn a high-income, but spend the majority of what they make.
- Wear expensive suits or carry expensive purses.
- Drive high-end luxury or sports cars.
- Really believe that rich people act rich.
It does not mean that every person that drives a BMW pretends to be rich, but those who do spend the majority of high incomes spend it in a way to display their wealth.
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The wealthy
Most rich people do not flaunt their wealth: They don't live in high-class neighborhoods or drive expensive cars. They look like you and me.
The rich have a net worth of above $1 million. Most rich people got wealthy through a simple combination of earning an income, saving for retirement, and spending wisely.
The pseudo-affluent
They buy things that convey success. They want you to know just how much stuff they have by showing off their success.
The pseudo-affluent feel insecure about how they compare with the Joneses and the Smiths. They hold on to the belief that all economically successful people display their success through prestige products.
The secretly wealthy
Your neighbor might be secretly wealthy if:
- They have an above-average understanding of finances: They may not be concerned about the looming recession, but calmly take about general atmosphere data points.
- They read: The space in their home is prioritized more toward education than centered around television and entertainment.
- They cook. A portion of their high income went toward a good kitchen that can facilitate cooking, companionship, and relaxation.
- They have an uncluttered lifestyle: They do not own a lot of "stuff." Everything has a purpose and a place.
- They care about their health: Many believe their health directly enables their ability to enjoy their wealth.
- They never brag: They don't strut around and take notice of people admiring them.
- They don't care what other people think: They often ignore fashion trends and pop culture.
You might be affluent if:
- You pay yourself first. You fund your retirement accounts before you pay anyone else.
- You live in a reasonably-sized house.
- You understand good debt vs. bad debt.
- You live a sensible lifestyle that's within your means by making smart decisions with your money.
- You are humble, yet confident.
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The Definition of Rich
A high income and a regular acquisition of expensive stuff do not necessarily make people rich. People may have a high income, but many won’t survive three months if they are suddenly without their...
Wealthy People and Pseudo Affluence
Wealthy people have sustainable access to money, often for a very long period of time. Their habits are now aligned with the wealth that they have incurred.
Pseudo affluence, on the other hand, is what people experience when they are currently earning lots of money and start to believe that they are rich. They pay for their expensive lifestyle with a high amount of borrowed money and are just a job-loss away from being poor again.
Object Poor
... is a ‘state of excess’ when the stuff we own makes us poor, as the debt we incur has trapped us to keep working our jobs to fund the expensive lifestyle and habits.
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Characteristics Of The Wealthy
- They live in homes just large enough for their needs and drive used cars.
- They have affordable interests.
- They don’t worry about having the highest credit scor...
Rich And Wealthy
By making wealth your priority now, you could be both later. Establish a strong financial foundation that will give you financial security and peace of mind moving forward.
Living paycheck to paycheck is a guaranteed way not to build wealth.
If you’re just starting on your personal finance journey, it might not be time for you to start acquiring these assets yet.
How To Become Wealthy
- Investing in stocks is simple if you avoid lucky stock picking. Keeping long-term perspective, invest early, especially in low-cost index funds.
- Rental properties.
- Small business ownership.
- Delaying gratifications.
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Frugality
Frugality means resisting the temptation to spend more than you earn.
Discipline
Self-made millionaires choose moderation over extremes. They often buy used cars, don't live in the most expensive houses and don't try to time the investment market.
Hard Work
A defining characteristic of many millionaires are their willingness to work hard and stick it out in high-paying careers until they are financially independent.
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