Posted by Maneesh Sethi :: October 8, 2007 @ 11:53 amWant to be broke? All you have to do is try to keep up with the Joneses. If you look around, you can see expensive cars, big houses, extremely pricey jewelry, and other costly displays of wealth. When people have the wealth to pay for these items, this is more acceptable---some rich people want to display their wealth, and they do it by buying expensive things. The problem occurs, however, when people who don't have enough money use credit to buy things that they cannot afford.
Sometimes, this affliction can affect the people hurt most by it. For example, one of my closest friends told me about her relatives who were facing foreclosure on their house. You might expect them to try and save all the money they could to put into paying off their house. Strangely, the opposite was true---they were actually putting their income into making the house look better (by redoing the floor, redecorating, etc.) – not because they were going to sell the house and find a cheaper one, but because their friends and family were doing the same to their houses. They were hiding their problems from those closest to them, and instead making their situation infinitely worse.
Before purchasing something, think to yourself--is the item for you? Or is it to prove something to someone else? Most importantly, can you actually afford the item you're purchasing? If not, don't get it. It just isn't worth it.
Instead, invest your money in index funds and P2P loans on Lending Club. Showing off should never trump a secure future.
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