The drawbacks of displaying financial success

How to pass, fit in, eventually set an example, and ultimately lead the way.
Melanzanisalat
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The drawbacks of displaying financial success

Post by Melanzanisalat »

About 8 years ago, I finally managed to get a good paid job for the first time in my life.
I was naive enough to let some relatives and friends know how high my new salary was.
Soon after, one of my aunts tells me: “now that you make enough money, you can lend my daughter some, so that she can buy herself a car, won’t you?”
:shock:
After few seconds of confusion I told her: “surely NOT!! I use the public transportation everyday and so can my cousin, especially that she has a low paid job. Why on Earth would she need a car in a large city with a good transportation network?”
My cousin would have not been able to return me the loan and at the same time pay for fuel, insurance, tax, repairs and so on. But she wanted a car.
I don’t have anything against people who spend their money foolishly, it’s their problem.
However I lose my temper when they try to spend MY hard worked money. And this happens often. Due to some mysterious reason, people prefer to proceed to terrorist attempts to my pockets instead of trying to solve their (mostly false) problems on their own. Or at least they could harass other persons.
After that experience I have learnt to maintain secrecy about my finances. And as an additional means of precaution when some acquaintance comes to me complaining about their finances I start complaining about mine as well. Just in case… meaning in case these persons are testing the waters to see if they can get money from me. This should be a diplomatic way to convey them the message that they are barking up the wrong tree.

Then, one of these days I was having a conversation with 2 work colleagues. They were speaking enthusiastically of a purse called “Birkin”. It was the first time in my life when I heard that name - “What is so thrilling about this purse?” I asked.
"Whaaaat, don’t you know what a Birkin is??”
“No, just kill me for that. You know I’m not a fashionista as you are. So, will you throw some light on my ignorance?”
They told me that this purse is famous, costs north of 20,000 EUR and rich people wait for months until they get one.
“Well, my purse cost only 80 EUR and accomplishes the same purposes as a Birkin, which is to carry stuff in it. And it is of good quality because I have it for 4 years and still looks new. Why would somebody pay 20.000 when they could buy a good purse with 80?”
“Uffff, Melanzanisalat, you simply don’t get it. One does not buy a Birkin to carry stuff in it, one buys it as a statement, i.e. to show her/his financial status”

And now my question is: don’t these people who show off their success face financial harassment from needy-greedy acquaintances? then how do they deter them?
I suppose, when strolling with the famous Birkin-statement hanging at your arm, you cannot reply to requests for financial assistance with the line: “go ask somebody else, I am poor.” :?

Felix
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Re: The drawbacks of displaying financial success

Post by Felix »

The book "Millionaire Next Door" basically says that you usually can either display wealth or have it, very few actually have enough resources to do both.

jacob
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Re: The drawbacks of displaying financial success

Post by jacob »

Sure they can. "Sorry, I don't have any money to lend you. I'm broke because I just spent $3000 on my children's braces and the payments on my new motorcycle are killing me. Hey, wanna go to the mall on Saturday? I need a new set of clothes for my second cousin twice removed's wedding to go with my new Birkin bag."

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Sclass
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Re: The drawbacks of displaying financial success

Post by Sclass »

My fav was when I landed my job at HP Labs (before it became the dump it is today). I was so pumped I came up the driveway of the home where I rented the basement. My landlord was in the garage. He said "you look happy."

I said "I just got a new job at Hewlett Packard!"

"Good pay?" he asked.

"yeah, I nearly doubled my salary" I said proudly.

"good for you son," he smiled.

The next day there was a rental increase notice in my box. +30%.

I can laugh about it now. :lol: I loved that old man. He sure helped me save a lot of rent with his illegal rental.

To this day I "floss with half caution" as Tupac said so eloquently. During my youth I had a whole list of things I wanted to have people see, a Rolex, a late model Mercedes, a gold tooth (kidding). Now I just want to be stealth.

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Sclass
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Re: The drawbacks of displaying financial success

Post by Sclass »

I'd like to add as one of the drawbacks of not showing off is you are perceived as a poor person - which isn't bad until somebody extends that to meaning you are dumb with money. Unsophisticated with finances.

Then when you say you're FI they don't believe how such a shabby joe can do that. Now you're a liar, crazy in addition to being dumb. "you retired? No way!"

So, I guess I don't know the answer to your original question. I guess you can just be Scrooge McDuck and tell them mine allllll mine!

SimpleLife
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Re: The drawbacks of displaying financial success

Post by SimpleLife »

Sometimes I can't believe the audacity people have. That you are somehow their golden ticket to the good life, all the while they just piss away your money having fun, while you are stuck in corporate working to pay for it.

If I had the presence of mind in a situation like that, I'd suggest that she instead get a job and pay for your car as well as other living expenses so that you don't have to work.

It really is a shame. I can only imagine what being rich and famous like some sports or movie stars must be like. Everyone and their mother holding their hand out. People who went to kindergarten at a school two counties over will probably contact you to point out that you were practically in the same class together and that you are what you are because of them, right before they throw out "oh by the way, can you help a guy out, I only need a small yacht?"

Chad
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Re: The drawbacks of displaying financial success

Post by Chad »

I just read an article about a guy who helped out his brother with mortgage payments for a year or more, and paid for his niece's college. They got mad at him when he told them he couldn't afford to do it anymore. Seriously? The guy wasn't even lending them money, he was giving it away, and they have the gall to get mad it him for stopping?

I don't have a problem with being asked for money. If I have any problem, it's being asked to do expensive things with other people like trips, sporting events, etc. Most of the time they are reasonable, but every now and then they get out of hand.

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Sclass
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Re: The drawbacks of displaying financial success

Post by Sclass »

Chad,

People getting mad is one thing. My stepmother was paying her cousins to take care of her aging mom overseas. Well, her mom died a few years back and she is still paying her cousins. I asked my dad what is up with that and she told him they became dependent on the money and now are in a situation where they cannot replace the income. So she continues to send money.

Since they "sacrificed" their carreers to take care of the old woman they supposedly cannot work anymore. The caregiver money was far more than they earned so they used it support four people. Now they have four long term unemployed people in need of perpetual subsidy.

Worse, a younger generation is being subsidized on the check so the need will go on for years.

workathome
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Re: The drawbacks of displaying financial success

Post by workathome »

I guess it might be a good idea to look at this strategically.

We feel capable of achieving financial independence, and possibly wealth. We look to Jacob and each other and seek something - we don't ask him for money - but we do seek his knowledge and expertise. Some of us may even pay him (buy the book), but we still expect to get something personally beneficial out of him. More than we give.

Our poor relatives or acquaintances do not feel personally enabled in this regard. They can only see "I need more money" see "you have money" and ask for it. It's natural, though short sighted and poorly directed.

Now you could try to use it strategically and say "yes, I'll give you money if you work at my Subway store for $7.50/hr", etc...

Also, you see the same behavior in every business, ever. If competitors find out your business has 1,000% margins, they're going to try and get in on it asap. Sure, they didn't come and say "hey, can I have a handout", but either way they're trying to get at it :-)

It's easy enough to hate on our personal experiences where we feel exploited, but we have essentially the same behavior, just more intelligently applied.

champ0608
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Re: The drawbacks of displaying financial success

Post by champ0608 »

I've worked very hard to make my entire family think I'm just like them.

They think I'm living paycheck to paycheck. They think I work 40 hours a week. I complain about a boss I don't have and tell stories about the co-workers I don't have. They think the little house my wife and I bought is our "starter house." Most importantly, they have no idea that I have a (modest) stockpile of cash.

At first I felt bad living behind a facade, and sometimes its hard to not get caught, but it works much better than everyone in the family calling you lazy for not working and scrooge for not handing out your money. I'm just like them.

tonyedgecombe
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Re: The drawbacks of displaying financial success

Post by tonyedgecombe »

champ0608 wrote:I've worked very hard to make my entire family think I'm just like them.

They think I'm living paycheck to paycheck. They think I work 40 hours a week. I complain about a boss I don't have and tell stories about the co-workers I don't have. They think the little house my wife and I bought is our "starter house." Most importantly, they have no idea that I have a (modest) stockpile of cash
So that huge thread on MMM titled "Overheard at Work" is really about people like us trying to hide our frugality :)

slimicy
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Re: The drawbacks of displaying financial success

Post by slimicy »

workathome wrote: We look to Jacob and each other and seek something - we don't ask him for money - but we do seek his knowledge and expertise. Some of us may even pay him (buy the book), but we still expect to get something personally beneficial out of him. More than we give.
I think some people are just hardwired to be "takers". It doesn't mean they're bad people, I think it's more of a societal thing. Torrenting/piracy, government handouts, being obsessed with the lottery, tons of credit card debt... all societal norms that reinforce the something-for-nothing mentality.

I'd be willing to bet that for whatever reason most of the people here, reaching for FI, are wired differently. I saw an interesting venn diagram recently comparing google search trends, and how overlapped some were. The interesting ones were "paleo" and "libertarian" which are two movements founded on taking responsibility for yourself and your own actions. I wouldn't be surprised if there was some inherent financial overlap there as well.

Chad
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Re: The drawbacks of displaying financial success

Post by Chad »

Sclass wrote:Chad,

People getting mad is one thing. My stepmother was paying her cousins to take care of her aging mom overseas. Well, her mom died a few years back and she is still paying her cousins. I asked my dad what is up with that and she told him they became dependent on the money and now are in a situation where they cannot replace the income. So she continues to send money.

Since they "sacrificed" their carreers to take care of the old woman they supposedly cannot work anymore. The caregiver money was far more than they earned so they used it support four people. Now they have four long term unemployed people in need of perpetual subsidy.

Worse, a younger generation is being subsidized on the check so the need will go on for years.
That is why I would always have it written out if I had to do something like that. Especially, with family.

workathome
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Re: The drawbacks of displaying financial success

Post by workathome »

slimicy wrote: I think some people are just hardwired to be "takers". It doesn't mean they're bad people, I think it's more of a societal thing. Torrenting/piracy, government handouts, being obsessed with the lottery, tons of credit card debt... all societal norms that reinforce the something-for-nothing mentality.
I think "takers" and "entrepreneurial" may crossover more than you realize... of course *not always*, but a lot of the difference is correlated to intelligence. The really rich people I know would have no moral qualms about taking advantage of government assistance, and I know at least a couple who have, they just have fare more intelligence with regard to acquiring larger amounts of money.

Or Walmart, McDonalds, Coca-Cola, etc. who derive a large % of income from EBT and Food Stamps programs... they're certainly not lobbying against these programs, or fighting to make sure Food Stamps can only buy veggies, etc.

For an example not isolated to my experience, look at ultra-libertarian Peter Schiff. He took welfare - and his argument isn't that it was wrong or he was poor, etc. - he says "who wouldn't collect a paycheck and get a chance to hang out on the beach without having to work?"

Tyler9000
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Re: The drawbacks of displaying financial success

Post by Tyler9000 »

workathome wrote: I think "takers" and "entrepreneurial" may crossover more than you realize... of course *not always*, but a lot of the difference is correlated to intelligence. The really rich people I know would have no moral qualms about taking advantage of government assistance, and I know at least a couple who have, they just have fare more intelligence with regard to acquiring larger amounts of money.
+1

I saw this phenomenon a lot in Silicon Valley. From the outside, many people see the startup culture as a bunch of young self-made go-getters taking charge of their own lives. But a lot of people in the venture community talk openly about working their network for government subsidies or preferential tax treatment, and promoting blatant ageism and open immigration policies to suppress wages. To the very wealthy, "Taking" means a lot more than hitting up a buddy for cash.

People will generally always take advantage of what privileges they are allowed. I don't like confrontation, and I hate even that testing process. So I can see how maintaining the illusion of personal financial "normalcy" to avoid those seeking to probe what they can get out of you is a rational course of action.

vivacious
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Re: The drawbacks of displaying financial success

Post by vivacious »

workathome wrote:Some of us may even pay him (buy the book), but we still expect to get something personally beneficial out of him. More than we give.
....
It's easy enough to hate on our personal experiences where we feel exploited, but we have essentially the same behavior, just more intelligently applied.

I don't really see it like that. This is basically brainstorming. We all ultimately make our own choices. But there are some resources here and we give and receive information. Also this website acts as PR for the book and things like that. I've answered some of Jacob's questions and he's answered some of mine. Same thing with a bunch of other people...

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Sclass
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Re: The drawbacks of displaying financial success

Post by Sclass »

champ0608 wrote:I've worked very hard to make my entire family think I'm just like them.

They think I'm living paycheck to paycheck. They think I work 40 hours a week. I complain about a boss I don't have and tell stories about the co-workers I don't have. They think the little house my wife and I bought is our "starter house." Most importantly, they have no idea...
Whoa dude. I was first taken aback when I read this. That is quite an act. But hats off to you. Your tactics certainly work. Some honesty issues here but it is clearly effective.

Maybe I should have tried this. I get all kinds of "you lazy guy" comments from my family. Nobody hits me up for cash though. I guess the worst thing that has happened is my parents helped to buy homes for my siblings but left me out because they thought I didn't need help. I'm okay with that since it was kind of true.

Takers and entrepreneurs? As a Silicon Valley entrepreneur I cannot see the connection. Maybe I'm not understanding the point. I feel like I worked my butt off to start a couple of companies. I didn't hold out my hand to get something for nothing. My first business was bootstrapped with my savings. The second was VC funded and they actually took it from me...serves me right for taking from them in the first place.

My first business got taken from me by a very aggressive competitor. We were doing about 500% profit. They saw it. But, their CEO bet the family farm to take my market. I backed down because it was just too much leverage. He worked his butt off, took on all kinds of risk and won. But I don't see the guy as a bum with his hand out asking for my money. He fought me for it and won.

Is there something I'm missing here? Entrepreneurs work like crazy and risk a ton of skin in the game. I cannot see the connection to folks who just bum a buck off a rich pal. Maybe the taking is seen as a form of opportunism?

Ok, the Walmart EBT cards thing is kind of manipulative opportunism so to speak. Maybe tobacco discounters like Cigarettes Cheaper is another. Sleep well, all business people aren't like this.

Tyler9000
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Re: The drawbacks of displaying financial success

Post by Tyler9000 »

Sclass wrote: Is there something I'm missing here? Entrepreneurs work like crazy and risk a ton of skin in the game. I cannot see the connection to folks who just bum a buck off a rich pal. Maybe the taking is seen as a form of opportunism?
There are good and bad people in any subset. Perhaps I just hung out in the wrong crowd. ;)

One successful entrepreneur I worked with at one point used a Kickstarter campaign to get big PR, but (I gather) spent the raised funds on an unrelated business while never (to date, at least) shipping a product. Another acquaintance was more blatant, raising funds and splitting with the cash. All legal, BTW. But they were both net "takers".

I saw some entrepreneurs who definitely worked like crazy, but had the connections (bailouts, subsidies, etc) to minimize their own skin in the game. They were definitely bigger players than the typical garage startup, though.

workathome
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Re: The drawbacks of displaying financial success

Post by workathome »

I mean the basic human intent - selfish gain. We generally look towards others for this... and if we see someone else better off (showing wealth) we all seem to have a natural desire to gain by that person - either copying what they do (business/lifestyle) or asking for help (money/knowledge). Your competitor hurt you worse by destroying your business than if he had asked for a couple grand handout. I'm ignoring the moral implications involved in how these intent is actually acted out, but looking at the drive.

The thought is, while we look down harshly on others for asking for a handout, their essential human drive isn't that different - just flawed through lack of knowledge or intelligence to perceive a more effective long-term strategy. We'd probably be better off having pity for their ignorance or incompetance than feeling slighted/complaining.

---

Separate argument:

Ecologically even, we might be better off if more people stayed home, didn't drive, and lived off food stamps (i.e. parasitic) than ran out to paper-shuffling jobs, burning lots of resources, and competing for market share to sell New Gadget X.

slimicy
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Re: The drawbacks of displaying financial success

Post by slimicy »

workathome wrote: I think "takers" and "entrepreneurial" may crossover more than you realize... of course *not always*, but a lot of the difference is correlated to intelligence. The really rich people I know would have no moral qualms about taking advantage of government assistance, and I know at least a couple who have, they just have fare more intelligence with regard to acquiring larger amounts of money.
What you're talking about is gaming the system. Obviously the more intelligent people will game the system. What I was trying to point out was that the people at the bottom of the barrell becoming slaves of the system are not socially abnormal. That is what I think is strange.

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