If you saw the recent Forbes list of the Top 25 Richest counties in America, and you don’t live in one of them, you might be tempted to assume those who do all drive Porches, eat caviar like it’s pretzels or live 10000 square foot mansions.
We live in number 24 on the list of richest counties but we are as middle class as it’s gets. I wonder how living here, surrounded by immense amounts of highly concentrated wealthy families effects the way we approach money, at least psychologically?
Everybody has heard of the “Keeping up with the Joneses” phenomenon. Originally proposed by James Duesenberry as the, “Relative Income Hypothesis” stating that, an individual’s attitude to consumption and saving is guided more by his income in relation to others than by an abstract standard of living.
So living amongst rich people MAY provide a more powerful motivator to consume and save than our own internal reality of how we approach wealth.
I’m really not sure how much outside influences have on how my family saves and spends. I like to think it has ZERO influence. But c’mon, no man is an island and all that. It has to effect us in some way.
How much does environment play into our perception of wealth and how does that effect our pursuit of wealth?
I can only speak anecdotally, but I do wince a little inside when my daughter’s new friend invites her over to play and her garage is bigger than our house. Our kids will attend the same blue-ribbon public school so we also benefit tremendously in spite of any inferiority I may feel.
I think as long as you don’t fall prey to “conspicuous consumption” the benefits of living surrounded by wealth outweigh any downsides. At this point of our “financial enlightenment” we don’t feel the need to buy stuff to prove anything. And we never really did “just buy stuff”, we were sloppy with our money and let it control us instead of vise versa. We are now focused on our own financial house. What may have been feelings of envy towards the 20 BMW’s in the preschool parking lot have been replaced with motivation. The motivation is not for us to “be rich” but for us to live for ourselves, and never mind the masses.
The wince of inferiority I feel in the face of all the wealth I see on a daily basis WILL SOON be replaced with the pride of having control of the money and the future we do have. And all the while our family will live simply and take advantage of the amazing schools, the safety of the community and it’s beautiful parks. Thanks richy-riches!