Playing the "Status Game" vs. the "Wealth Game": A New Lens to Measure Your Financial Success

Measuring success, particularly financial success, has become increasingly complex in the age of social media and hyper-connectivity. We're bombarded with images and stories that can quickly distort our perception of what it truly means to be successful. However, we must strip away the noise and understand the real games we play. Two games stand out regarding financial success: the Status Game and the Wealth Game.

Understanding these games clarifies your financial goals and helps you identify the metrics that genuinely matter to you. So, let's delve into these two games to understand better how you can measure your financial success.

The Status Game

What Is It?

The Status Game is all about external validation. It's about your social standing, reputation, and how others perceive you. In this game, the critical markers of success are often material possessions like the car you drive, the neighborhood you live in, and even the exotic vacations you take.

How to Play

To play this game, you typically invest in assets instantly recognizable and esteemed by society. This could mean buying the latest iPhone every year, living in a high-end neighborhood, or being a member of an exclusive club.

Metrics for Success

The score is kept through societal validation, social media likes, and peer compliments. In short, if people talk about how "successful" you are, you win the Status Game.

The Catch

This game is precarious because it's often played with borrowed money or at the expense of real financial growth. Plus, the goalposts are continually shifting, making it a never-ending cycle that could result in an economic (and emotional) drain.

The Wealth Game

What Is It?

Unlike the Status Game, the Wealth Game is a long-term game played with yourself. It focuses on financial security, independence, and the freedom to live on your terms.

How to Play

Invest in assets that grow over time, such as stocks, bonds, or real estate. Focus on increasing your income through career growth or side projects and prioritize saving and intelligent investing over conspicuous consumption.

Metrics for Success

The scorecard for the Wealth Game is your net worth, cash flow, and investment portfolio. The goal is financial independence and the freedom to choose without financial constraints.

The Catch

The Wealth Game requires discipline, patience, and the ability to defer gratification. It's more flashy and immediately gratifying than the Status Game, but it promises a more sustainable and fulfilling form of success.

Conclusion

While there's nothing inherently wrong with playing the Status Game, it's crucial to recognize which game you're playing and why. Are you accumulating liabilities in the name of societal validation, or are you building assets for long-term wealth and financial freedom?

Understanding the difference between these two games can be the first step in crafting a financial strategy that aligns with your accurate measures of success. Because at the end of the day, it's your life and your rules, so choose your game wisely.