Your colleague goes to yet another trip overseas. Your neighbor brings home the latest car model. Your friend moves to a bigger house in an upscale part of town.
You are certain these people don’t make a dramatic difference in what you’re earning, but how are they able to spend that insane amount of money?
You may not see it, but the new house, the lavish vacation, and the new ride are the flashy results of a series of tough decisions just beneath the surface. What you don’t see are the consequences – the trade-offs.
You’ll only see what they want you to see – that’s what you need to remember when you start stewing other people’s financial matters. There is a thing called “conspicuous consumption, ” and it is a way for newly wealthy people to boost their social status and display their economic capacity.
This leads people to “keep up with the Joneses” and not only the wealthy fall into that trap, but the middle-earners also try to keep up, hoping they can be the norm. Social media also worsens the situation.
Though comparing ourselves against others can motivate people to work hard to improve their economic status, but it can also lead people to waste their financial resources on insignificant things.