Focus on the Roots Before the Leaves

You must protect your cash generating assets so that they can grow and become large enough to support you and your family. As the old farmers use to say, if you eat your seed corn, you starve to death in the long run. Image © iStockphoto/Thinkstock

“The problem is that people, particularly younger people, have come to focus on the trappings of wealth over everything else – including the work or savings to accumulate the wealth to be able to reasonably afford luxury brands.  When we think about “rich,” we think about acting rich over being rich.

The Mercedes Millionaire worked hard to achieve success.  First it was about the success, and then came the high-consumption lifestyle – which is congruent with their level of success.  Buying a Mercedes hardly puts a dent in their financial statement.  Contrast them with the acting-rich actors who work to acquire brands with which to imitate the consumption lifestyles of the Mercedes Millionaires.  Not surprisingly, wannabes in general are less satisfied with their lives and have lower levels of job satisfaction than do millionaires.  Driving a leased Mercedes, wearing an expensive watch, or filling up a heavily mortgaged home with Grey Goose will not make one rich or happy.

When an aspirational looks at a Mercedes Millionaire, he only sees what is on display.  He focuses on the leaves of the oak tree, not its roots.  But the values and work habits of millionaires, like the roots of the oak tree, are what support their lifestyles (the leaves), not the other way around. Who should the aspirational seek to emulate instead?  The Toyota Millionaire.  This advice may be painful for some hyperspenders.  For them, a Toyota would never do.  The very thought of a Toyota in the driveway makes them queasy.”

- Page 197, Stop Acting Rich by Dr. Thomas Stanley

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