Is Looking Poor Important?

Looking poor may be as bad as looking rich. I argue that both behaviors stem from a desire to impress others or avoid judgment. Cory and I talk about the psychology of money and share personal insights on authenticity and human emotions. Is it possible to align your spending with your values, avoid societal pressures, and build a healthy relationship with money?

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Read an overview of the conversation below:

Old Money vs. New Money

The conversation takes a deep turn as Jake introduces the concept of “old money” versus “new money.” He explains that old money is characterized by high-quality, understated pieces that are reliable and expensive but not flashy. In contrast, new money is all about being flashy and showing off wealth. “New money is the flashy, flashy, flashy,” Jake says, highlighting the difference between subtle elegance and overt display of wealth.

Cory adds to the discussion by mentioning the idea of “stealth wealth,” where individuals keep a low profile to avoid unwanted attention. He cites Warren Buffett as an example, noting how Buffett lives modestly despite his immense wealth. “It’s been well-documented that he lives in Omaha and goes to McDonald’s and gets his Diet Coke,” Cory says, emphasizing the importance of staying true to oneself.

The Pitfalls of Trying to Look Poor

Jake and Cory agree that trying to look poor is just as problematic as trying to look rich. Jake argues that both behaviors stem from a desire to impress others or avoid judgment. “I don’t think you should buy something flashy because you want to impress people because it makes you look rich. And I don’t think you should wear overalls because you want people to think you’re poor,” Jake asserts. He believes that both behaviors are character flaws and that individuals should focus on aligning their spending with their values rather than seeking validation from others.

Cory concurs, adding that people should not worry about lifestyle inflation or keeping up with appearances. “You should be true to who you are,” Cory says, emphasizing the importance of authenticity and self-awareness in your finances.

The Psychology of Money

The discussion then shifts to the psychology of money and how it influences people’s spending habits. Jake and Cory explore the idea that some individuals may try to look poor out of fear of being judged or taken advantage of. Jake shares a personal anecdote about not wearing his expensive watch in certain areas to avoid attracting unwanted attention. “I’m not going to wear my nice watch in an area where I don’t feel a hundred percent safe,” Jake explains, highlighting the difference between wanting to look poor on purpose and the need to act out of fear or safety.

Cory shares a story from his teenage years when he and his brother experimented with wearing beat-up shoes and shorts while caddying at a golf course to see if it would affect their tips. “What I can confirm is that how good of a caddy I was is what mattered,” Cory concludes, reinforcing the idea that authenticity and competence are more important than appearances.

Balancing Financial Goals and Personal Values

Jake and Cory emphasize the importance of having a solid financial plan and aligning spending with personal values. They encourage listeners to seek guidance from financial planners or therapists if they struggle with the fear of judgment or guilt about their spending habits. “If you’re out there and you’re struggling and you feel like you can’t buy nice things because your neighbors or your family will judge you, I would encourage you to talk to us or talk to a therapist,” Jake says.

Cory adds that it’s important to find a balance between spending money and saving for the future. He shares a conversation with a client who believed that new cars couldn’t be purchased for less than $70,000, challenging the client to be honest about their options and financial goals. “It’s about finding that right balance. And it really comes down to your purpose,” Cory says.

Jake and Cory also touch on the broader societal implications of these behaviors. They discuss how the pressure to appear wealthy or poor can lead to financial stress and poor decision-making. Jake mentions that some people might feel compelled to buy flashy items to fit in with their social circle, while others might downplay their wealth to avoid envy or resentment. Both scenarios can lead to a disconnect between one’s financial reality and their outward appearance, causing unnecessary stress and anxiety.

Cory brings up the concept of “lifestyle creep,” where individuals gradually increase their spending as their income rises, often without realizing it. This can lead to a cycle of constantly trying to keep up with others, rather than focusing on what truly brings happiness and fulfillment. “You should be true to who you are,” Cory reiterates, emphasizing the importance of self-awareness and authenticity in financial decisions.

Practical Advice for Listeners

To help listeners navigate these challenges, Jake and Cory offer practical guidance on how you can align your spending with personal values. They suggest creating a detailed financial plan that includes both short-term and long-term goals, as well as regular check-ins to help ensure that spending habits remain in line with these goals. They also recommend seeking the guidance of a financial planner or therapist if feelings of guilt or fear of judgment are impacting financial decisions.

Jake shares a personal story about considering the purchase of a sports car and the internal conflict he felt about appearing showy. He sought advice from his wife, friends, and his father, ultimately deciding that as long as the purchase aligned with his financial plan and personal values, it was a decision he could feel good about. “You work hard for what you have,” Jake’s father told him, reinforcing the idea that financial decisions should be based on personal fulfillment rather than external validation.

Final Thoughts

The episode concludes with Jake and Cory encouraging listeners to embrace their true selves and make financial decisions that reflect their genuine purpose. They remind listeners that authenticity and self-awareness are important to achieving financial well-being and that finding a balance between enjoying life and planning for the future is important.

As Jake and Cory wrap up the episode, they leave listeners with a powerful message: “There is nothing more attractive about a person that is comfortable in their own skin.” Whether it’s flying first class, driving a modest car, or simply being true to oneself, the key is to make choices that align with one’s values and financial plan, free from the fear of judgment or the need to impress others.

Thank you for tuning in, we hope you have a great week!

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