Status vs. Wealth: Why the Rich Don't Act Rich

This is a pretty lazy and non-value additive article honestly. All it does it just reference things Naval or Warren buffet has said and then “subscribe to my newsletter" at the bottom.

I feel like you could easily write something like this by doing a scrape(Naval's twitter) + scrape(buffet's wiki page) -> GPT3_summarize(that content) and you'd get this article.

This was discovered and explored 25 years ago in The Millionaire Next Door: https://en.wikipedia.org/wiki/The_Millionaire_Next_Door

I took a hotel shuttle from the airport recently. Got to chatting with the driver. He’s an immigrant who owns 6 industrial rental properties and a few single family rentals.

You’d never know it, given his attire and evening job. But he is focused on keeping the cash flow growing.

His net worth is probably in the millions but few know it unless they really get him to open up (something I tend to be naturally good at).

I know a few folks like this. I call them the stealthy wealthy.

Better covered by works like Fussell's Class. This just reads like low-content hustle porn.

I used to know someone who’s family was worth at least 100million dollars. His family were shipping magnates out of Syria. Genuinely the nicest person. Other than dressing well and not obnoxiously so, you’d probably never know. It’s a shame that the city/our college gave him panic attacks, we lost touch when he moved to Germany and I wound up somewhat immaturely cutting the friendship short after initially keeping contact in my early 20s.

Ironically he taught me the importance of relationships and people after otherwise being the type of techy that only values technical acumen. Legitimately changed my whole life direction. Shame I didn’t take to the lesson entirely before I cut things off.

One of my few regrets.

The article focuses on the internal goods of 'stealth wealth', but I think it's also worth mentioning the external benefits of not appearing wealthy. Namely, good cover from the behaviors of those who do focus on status.

> The Rich Don’t Act Rich Because They Buy Assets, Not More Stuff

Not sure this makes much sense. Do rich live in a cave and literally sit on their money and wait until they die? I don’t think so, they buy flight tickets, a house in the beach, a bigger yard to do gardening, better health care to live longer, pay a baby sitter,…

I feel money buys high quality time, not just time

This is a lesson most people don't learn till they are older (if ever). It's hard to convince someone in their 20's that they shouldn't be spending money on status things in order to gain friends or a romantic partner. When you are older and settled down it's much easier to not care what other people think of you.

I wonder if most people who appear to be concerned with status are actually worried about belonging. They seem to be playing a zero-sum game with their peers, but they really just want to be secure within that group and not at the margins or in the out-group. I've certainly known people who want to be recognized for their expensive car or clothes, but I think most people just want to fit in and they've been convinced that what they wear or drive is an important part of that.

While I agree with most of what's written, I think that revenue from volatile stocks does come at others' expense and, thus, might not be an example the author should be including.

I'm sure Naval gets a lot of high-status from his job and general interactions with people. So it's easy for him to "ignore" the need/drive for status.

There is a more serious and thorough treatment in this area in the many books by the late wealth researcher Thomas J. Stanley.

Common points he would repeat:

- There is no magic formula to find rich people or to become one

- They don't live above their means

- Beside poor impulse control, a habit of lottery ticket purchasing is the strongest signal negatively correlated with long-term wealth

- Rich people often married but rarely divorce because it's a more efficient lifestyle and financial suicide to split

- Rich people tend to meet their spouses in college where there's a better cohort to meet

"Stop Acting Rich" was a title of one of his books. Not sure if it's an accident or the remote possibility of a ripoff. It's an obvious title.

One interesting positive correlation with single-family, suburban, non-forest-interface home property values is the number of trees. It's not a perfect rule, but single-family home areas without trees tend to appear unappealing and are statistically less affluent (i.e., fake grass, plastic flamingos, wrought iron fencing, and bars on the windows). The exception to the rule is San Jose, California which is a horrible mix of unmaintained houses with overgrown weeds beside nice homes. If property owners there had leadership sense and wanted to maintain their property values, they would influence code enforcement to cite unkempt properties.

I think this is a bad, muddled version of these lessons.

> Play wealth accumulation games, not status games.

> Twitter is the ultimate battleground for status games.

... and then proceeds to quote his own tweets.

He talks about the importance of living by an inner scorecard an then immediately transitions to claiming "the only game worth playing is the wealth accumulation game", which sounds a lot like an external scorecard.

A different metric: If you lack for nothing you are wealthy. If you yearn for more you are poor...

Is this really true, though?

I mean, superyachts do exist. Mansions also visibly exist. Jeff Bezos does have not one but two private jets.

Now, I know some of this stuff is illusionary - there are private jets that don't fly and just act as photo studios. Loads of people can qualify for a loan to get a fancy car, if they're willing to pay a lot in interest.

I mean, I'd call someone with $10 million in the bank rich - but that's not enough money to own a superyacht. People who own superyachts aren't in my social circles, but they clearly exist.

Just be careful, you can't take it's with you (this is a religious statement, most religions agree but if you believe an exception I guess this comment doesn't apply). As such there is no point in saving too much. Enjoy what you have, save money, but plan on spending that money before you die. (Since you don't know when you will die have some insurance for long life )

the genuine reason why certain rich people don't act rich has nothing to do with status gains or zero sum games. There's plenty of rich people who do indeed act rich. Pick your favorite sports superstar.

The real difference is between new and old money. The nouveau riche like to show off because they're fixated with the idea that they've earned it themselves, very much on display among super rich techies. It's precisely the "non zero-sum" people who love to signal their wealth openly because they take it for granted that their wealth is based on merit.

It's your old money folks who have some sense of noblesse oblige who understand that wealth most of the time is indeed pretty zero sum and who think of flaunting wealth one as distasteful and secondly as potentially stupid if it attracts attention, which new money craves and old money does not.

isn't wealth accumulation inherently zero-sum? like, there's a fixed amount of capital and resources in the system. accumulating it for yourself means someone else won't have it, right?

> Wealth creation is a positive-sum game.

Is it though? Even if it were true in aggregate, which I'm not ready to grant, there are clearly individual losers in the the "wealth creation" game.

honestly, after you buy all of the expensive toys, then what? i suppose some people seek more exclusive and expensive things to get that high from buying stuff or chasing clout, but others just get tired of it and find stasis in their life.

As plane prices went down and most travel can be done with much less money than before, professional photos are easy to take, the hardest to fake part of social status remaining is looks.

Naval won't have the status of Leonardo DiCaprio because he was never looking like him.

Few people seek Love? Hmm.

How do you get wealth without money? You need to start by chasing money…

The rich generally do act rich.

The existence of instagrammers who rent $5 million apartments for a half hour photoshoot hardly refutes this.