Have you ever rode in a nice car, and the driver proceeded to complain about rising gas prices, or refrained from turning on the air conditioner? It’s the most ridiculous thing I’ve ever seen.
If you are nickeling and diming about gas prices or the minor costs of turning on your AC on a hot day, your car is simply too expensive for you. Get a cheaper one ASAP. How cheap? Cheap enough that you forget to look at the price of gas when you go to fill up your car.
In 1999, when Jeff Bezos was already a billionaire 9 times over, a reporter asked him why he drove a Honda Accord when he was worth $9 billion. “What’s with the Honda?” the reporter asked. Jeff Bezos laughed and replied, “This is a perfectly good car.”
Why was Jeff Bezos so indifferent about the car he drove?
His answer: he did not want to spend money on things that did not hold any significance. If he was going to spend a dollar, it had to be on something that mattered to his customers.
That statement is the key to understanding the difference between broke people and rich people (the self-made ones, at least.)
The difference between broke people and the self-made rich is that rich people are focused on value creation, whereas broke people are fixated on figuring out ways to not look broke.
What insecure people have a hard time understanding is this: Just because someone likes your car doesn’t mean they like you. No one who is in touch with what truly matters in life gives a damn what you drive, so long as it works.
Insecurity is expensive
Most young people these days would hate to be caught dead in a cheap-looking car. You can’t flex a cheap car on Instagram. When you drive up to a party, your friends will think you’re poor. No one who rides in your car will ever say, “This is a nice car.”
Young people are universally insecure about themselves, and that’s understandable. Many of them don’t even know who they are yet, or what they want to do with their lives. But instead of being open about it and searching for answers, they spend too much of their time attempting to hide their vulnerability and confusion by using debt to buy things they can’t afford in an attempt to look more successful and secure than they actually are.
This is a huge mistake; it’s one thing to be insecure, but it’s another thing to be insecure and in financial trouble, too.
My wife and I can regularly spot young, low-wage employees driving Audis, BMWs, and Mercedes Benzs to work or out of work. The disconnect between the cars they drive and their actual ability to actually produce the appropriate amount of income to own that car and build a life for themselves is appalling.
Our anecdotal observations is of course corroborated by the data. A 2019 report by the New York Fed found that millennials have the worst delinquency rates when it comes to auto loans, and it’s no surprise–they’re taking out auto loans to buy cars they can’t afford.
So what we end up seeing are droves of young people who appear to be doing well for themselves because of the car they drive or the pictures they post on Instagram, when in reality, they’re up to their eyebrows in debt. (The fakeness and unreliability of Instagram to give me a clear picture of the true lives of the people I followed is a major reason why I deleted mine, among other reasons.) One emergency, one setback, one credit card line canceled by the bank, one unplanned child, and these Instagram flexers will be thinking about declaring bankruptcy and moving back in with their parents. Young kids working minimum wage jobs and driving nice cars is nonsense.
I never understood why people would spend so much on cars they clearly can’t afford. What’s wrong with looking broke if you’re actually broke? It’s not like you’re always going to be broke anyway, right? But if you make a habit of spending money on things you can’t actually afford, I can guarantee that you will always be broke.
And even if you are already rich, there’s nothing wrong with refusing to upgrade your lifestyle as your income increases, especially if the stuff you own already works perfectly fine, as we saw with Jeff Bezos’ extensive usage of his Honda Accord even when he was already a multi-billionaire.