The goal is to grow your bank account, not your ego. Here are four reasons why keeping a low profile can actually lead to higher rewards. Number one: It frees you from the cycle of permanent dissatisfaction.
Think about your own life. Every time you hit a milestone—whether it's getting a promotion, buying a nicer car, or moving into a better neighborhood—a new set of standards suddenly surrounds you. It's like playing a never-ending game where the rules keep changing.
You buy a great car, and for a moment, it feels amazing, but then you notice your friend's car is even better, and that initial joy fades. This isn't just a feeling; it's backed by science. Researchers call it the "hedonic treadmill," and it's exactly what it sounds like.
Imagine you're on a treadmill at a gym. No matter how fast you run, you stay in the same spot relative to the room. The same thing happens with your happiness.
No matter how much more money you make or how many new things you buy, your overall happiness tends to stay the same. There was a study that looked into how people's happiness actually changes with their level of income. They found that once we have enough money to cover basic needs like food, shelter, and healthcare, having more money doesn't make us a lot happier.
We quickly adapt to our new level of wealth, and this adaptation means that what once felt like a big improvement soon becomes the new normal. We start wanting even more to regain that initial excitement. Think about the last time you upgraded your iPhone.
At first, it works really quickly, and it's thrilling to test out the new features. But how long does that excitement last? Soon enough, you're already thinking about the next upgrade, and the cycle repeats with nearly everything we buy.
It's not just about phones; it happens with cars, homes, clothes, and even social status. On top of that, social media only magnifies this pressure. A report from Credit Karma revealed that 39% of Brits feel pressured by social media to spend more money to appear successful or happy.
By choosing to instead look poor, you're simply stepping off that relentless treadmill. You're saying, "I'm not buying into this"—no pun intended—and the moment you do that, you'll find that the inner peace you get from making that decision and not feeling the need to compete with every single thing will bring you so much more happiness than staying on that treadmill ever will. Number two: We lose freedom of choice.
When I first started working in investment banking, I definitely fell into the whole keeping up with appearances. I wore designer clothes, had the latest things, and bought a nice car. That was me.
I spent so much of my income on things that made me look successful, even though I knew my bank account showed the opposite. But no one could see that side. On the outside, I had it all, but inside, I was stuck in a job I didn't enjoy—on this treadmill that we spoke about—constantly chasing the next thing.
I was following the "earn money, spend it, and then expect happiness and freedom to follow" cycle. Fast forward to two years ago; my spending on luxuries and wants went down to pretty much zero. For six to nine months, I was spending all my money on education, skills learning, and putting it back into the business.
I made a huge shift in my lifestyle for about two years, which led me to change my style of life forever. I focused on building a financial security that let me walk away from a six-figure bonus and leave a high-paying job because it didn't satisfy me. I decided to focus on something I love and genuinely have a passion for, and it gave me the freedom to travel whenever I wanted.
I can genuinely tell you, having seen both sides, that that feeling of freedom—the sense of empowerment and liberation of being able to walk away from something that no longer serves you—completely beats the fulfillment that you get from a new item. For those couple of years, I followed the "earn money, invest it towards freedom, and then spend it on other things if I had any money left over. " When I talk about spending zero on my wants or my fun category, it's because everything was going towards education, investing, and improving my skill set.
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The third reason why looking. . .
"Looking poor is important because it takes you out of survival mode. Einstein famously wrote, 'A calm and modest life brings more happiness than the pursuit of success combined with constant restlessness. ' A study by the American Psychological Association revealed that 72% of Americans feel stressed about their money, and a report by the Money and Pension Service in the UK found that 62% of adults feel anxious about their finances, with 48% worrying about money at least once a week.
In today's world, a calm and modest life is pretty much essential for maintaining peace of mind and reducing the level of anxiety when it comes to your finances. If you get a bonus or a pay rise and buy a new car that eats 40% of your take-home pay, you cannot afford to lose your job, take a break, or even consider other opportunities; you're stuck in survival mode. Upgrading one thing often tends to lead to a domino effect of additional expenses.
Yahoo Finance listed car brands by the maintenance cost over the first 75,000 miles and found that entry-level brands like Hyundai, Toyota, and Honda are almost three times cheaper to maintain than luxury brands like BMW and Mercedes-Benz. When you upgrade, there's a domino effect on all the costs that you have to incur to maintain that item. Instead, the greater you can make the gap between your income and expenses, the more peace of mind you'll have.
The bigger that gap, the more freedom you have; it gives you the flexibility to take risks, try new things, or simply just take time off if you want to. There is something called the KonMari method, popularized by Marie Kondo, and it's all about only keeping the things that spark joy. By doing this, you're not only clearing out your physical clutter but also creating space for greater mental clarity and emotional well-being.
You can apply the same philosophy to your finances; it's not just about saving money but also about reducing the stress of maintaining this high-status lifestyle that puts you in survival mode. The thrill of a new purchase often fades, leaving behind the anxiety of keeping up. The more things you have, the more you're in a cycle of living in survival mode.
Number four: The power of authentic living. A really interesting study found that 25% of Americans admit that they have pursued a romantic relationship purely for the money aspect, and over half of those people have misrepresented their financial situation to attract a partner. If you base your self-worth on external validation, material possessions, or the amount of money you have, you risk attracting people who only value you for superficial traits.
Authenticity is the cornerstone of lasting relationships, and this idea extends beyond just romantic relationships; it applies to how we present ourselves in almost all aspects of our lives. As the saying goes, 'Don't show off the outside of your house; show off the inside. ' The outside is what you display to strangers in an attempt to gain their respect and admiration through outward appearances.
In contrast, the inside of your house represents your true self—that's what you share with family and close friends. It's where your genuine values and character shine through. In the novel "The Adolescent," the author wrote, 'If I had 100 million, I would nevertheless walk around in old clothes because the knowledge of it, my consciousness of my wealth, would suffice.
' This quote embodies the essence of true wealth; it's not about flaunting it but about the inner confidence and security that it brings. Many wealthy individuals understand this; they often choose simplicity over showing off. They don't make what they own their entire identity because they know that living authentically and valuing what's inside over an outward appearance is a really powerful way to build meaningful, resilient relationships.
Those are four reasons why looking poor is important for internal happiness. If you liked this video, you should definitely check out my video right here on four signs that you're doing well financially, even if it doesn't feel like it. Thank you for watching!
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