I was just thinking how a common interpretation of striving to attain things is that people believe things will bring them happiness. I don’t think this is what we are seeing. I think people buy things for their symbolism, and the entire thing is some kind of magical thinking, or even an unconscious magical ritual, where they think that, by putting symbols of success, wealth or fame onto themselves they will increasingly participate in the desired outcome.
In that sense, they are some sort of idealists, because they see things for their social and emotional value, not their material value, and I’m some sort of a materialist, because I buy things mostly for their physical utilitarian value. For instance, I buy coffee cups in order to drink coffee from them. I don’t care how fancy they are. They need to be the right size, nice enough shape and they need to be durable, inexpensive and locally available. All of those things are physical properties, and emotional or social significance of those cups is zero.
Nothing fancy.
However, when someone buys coffee cups from a fancy brand, and wants them to increase the perceived social standing of the household in the eyes of guests, they are doing it for the ideal, not material properties of the object.
I’m not saying I’m never buying things for their perceived meaning. I do, when it’s useful. For instance, when I need to maintain an impression in order to “pass” socially, I’ll buy a thing or two for their status symbolism, but I’ll try to be reasonable about it and not overspend. This, however, is also mostly functional, because I see the symbolism as part of the utility. I know how people think, what they perceive, what conclusions they will make, and I know what impression I want to make in order to have the least possible amount of issues. So, apparently, sometimes the symbolism of status is a commodity to be purchased.
But this is a completely different thing from believing that, if you buy enough expensive things, you will magically become more successful and wealthy. No; you’ll be poorer, because wasting money on depreciating symbolic assets doesn’t do absolutely anything, other than make people think you’re an idiot. There are people who are so obsessed with things, that you can precisely assess the amount of money they have by whether they bought some symbolic asset or not. For instance, if he didn’t buy a Rolex, you can tell for sure he has less money than the price of that Rolex, because he would have bought it even if he had exactly that much money and not a Euro more. If he had enough money to buy a Mercedes, he would have certainly bought it.
The concept that you can be rational and calculated about those things is, apparently, too much for some people. The “magical” power of material symbols is too great for them to resist, because they actually think this is the way you make progress. You buy Mercedes, wear Rolex and eat lobster all the way to material success. It’s insanity, but that’s how they think. I, on the other hand, think that status symbols are the fastest way to financial ruin, and one should avoid them as much as possible and instead act rationally and frugally, but within reason and until a point.
The limit of frugality, in my opinion, is respect for yourself, your work and your family. If you respect your family you won’t allow them to wear rags and look homeless. If you respect your work you will buy yourself good tools. Also, you will purchase sufficient symbols of status to shield your family from social pressures. So, status symbols are somewhat necessary and you can’t completely avoid them, but if you’re rational about it, they won’t cost you much more than purely utilitarian things of good quality. You just need to know what you’re doing and be purposeful and deliberate about it. Also, you need to avoid growing expenses to match and exceed your income, because that’s deadly.
For instance, there’s a pretty defined amount I’m willing to pay for a watch, regardless of how much money I have. I’ve heard statements that a watch should cost a month or two of your income, but I completely disagree with that. I would never buy a watch that expensive. Instead, my limit for a watch is my monthly budget for discretionary spending. Just think about it: a monthly income isn’t something you can recover in a month. You have expenses – rent, bills, food, fuel and so on. When you remove standard expenses from your income, the rest is what you can comfortably spend on something and not get yourself into trouble. In order to recover a full month of income, you need to pay it off from multiple months’ worth of discretionary spending budget, and depending on your actual numbers, that can be a very long time. So, if your discretionary budget is 10% of your income, it will take you 10 months of that to recover your monthly income, if you burned it on a watch. So, essentially, you’ll have to live on bare necessities for 10 months to pay for a gadget. You see how insane that “rule” is?
So, rather than defining “what I can afford” as the amount I can pay without dying, I define it as the amount I can pay without feeling any adverse effects. This means I can afford much less than people who will go into debt and destitution just to prove a fictitious point. I do, however, prefer having actual money, to creating an impression of having money. Impressions are sometimes useful, but it is my experience that they peak out very quickly.
