Gichuki Kahome

How Your Peer Group Affects Your Spending Habits

If you have kids, you may have heard them shout innocently that your neighbors have a bigger TV than you do

If you are a married man, you may have heard your wife complain that the neighboring family has enrolled their children in a more expensive kindergarten than you have.

That’s how our neighbors, friends, and work colleagues affect how we spend money. We want to be like them or be better than them

We want to enroll our kids in better schools than our neighbors do, we want to travel to far away places for holidays than our relatives do. We want to drive better cars than our colleagues do.

That’s why Morgan Housel writes,

“For so many people, the question of whether you’re buying nice things is actually, “are your things nicer than other peoples’ things?” The question of whether your home is big enough is actually, “is your home bigger than your neighbor’s?”

Money to some people is less of an asset and more of a social liability, indebting them to a status – chasing life that can leave them miserable.”

You Can’t Tell How Wealthy People Are

The problem is not the competition. The problem is how far you will have to stretch yourself to be equal to them or to be better than them.

That becomes worse because we can’t see peoples’ bank accounts.

We rely on cars, houses, holidays, clothes and Instagram photos to judge how wealthy people are.

You don’t know their level of savings, the assets they own, or even how they finance their lifestyles. They may have broken the bank with their last foreign trip. They may be financing their lifestyle with debt. They may have zero savings since their lifestyle is very expensive.

On the other hand, they may be doing very well financially while you are struggling.

And in your attempt to keep up with the Joneses, you end up collapsing financially.

That’s how rich people go broke.

The Grass isn’t Always Greener On The Other Side

“There once lived not far from the River Indus, an ancient Persian by the name of Ali who owned a very large farm. He had orchards, grain-fields, and gardens; he had money at interest and was a wealthy and contented man. One day there visited an old Persian famer – one of those ancient Buddhist priests. He sat down by the fire and told the old farmer how this old world of ours was made along with granite, silver, gold and diamonds.

The old priest told Ali that if he had one diamond the size of his thumb he could purchase the county, and if he had a mine of diamonds, he could place his children upon thrones through the influence of their great wealth. Ali heard all about diamonds, how much they were worth, and went to his bed that night, a poor man. He had not lost anything, but he was poor because he was discontented, and discontented because he feared he was poor.

He said, “I want a mine of diamonds,” and he lay awake all night. Early in the morning he sought out the priest. 

Ali: “Will you tell me where I will find diamonds?”

Priest: “Diamonds! What do you want with diamonds?”

Ali: “I wish to be immensely rich”

Priest: “Well, then go out and find them. That is all you have to do; go and find them, and then you will have them.”

Ali: But I don’t know where to go.”

Priest: “Well, if you will find a river that runs through white sands, between high mountains, in those sands you will always find diamonds.

Ali: “ I don’t believe there is any such river.”

Priest: “Oh yes, there are plenty of them. All you have to do is to go and find them, and you have them.”

Ali: “I will go.”

So he sold his farm, collected his money, and away he went in search of diamonds. He began his search in the mountains and afterward came around into Palestine, then wandered on into Europe, and at last —- when his money was all spent and he was in rags, wretchedness, and poverty, he stood on the shore of that bay at Barcelona in Spain, when a great tidal wave came rolling in between the pillars of Hercules, and the poor, afflicted, suffering, dying man could not resist the awful temptation to cast himself into that incoming tide, and he sank beneath its foaming crest, never to rise in this life again.

The man who had purchased Ali’s farm one day led his camel into the garden to drink, and as that camel put its nose in the shallow water of that garden brook, Ali’s successor noticed a curious flash of light from the white sands of the stream. He pulled out a black stone having an eye of light reflecting all the hues of the rainbow.

There came up other more beautiful and valuable gems than the first. The diamond mine of Golkonda, the most magnificent diamond mine in all the history of mankind was discovered. The crown jewels of England and Russia, the largest on earth, came from that mine.

Had Ali remained at home and dug his own cellar or underneath his own wheat fields or in his garden, instead of thinking wealth lies elsewhere, and ultimately falling into wretchedness, starvation, and death by suicide in a strange land, he would have had acres of diamonds. For every acre of that old farm, every shovelful, afterward revealed gems which have since decorated the crowns of royalty.”


You Are Doing Better Than You Think

Like Ali, we think that other people are doing better than us or that the grass on the other side is greener than where we are.

We imagine that others are living better lives than us because that’s what it appears but it’s not always the case.

We end up chasing after things that we think will make our lives better only for us to die from desperation, lack of purpose and from living a meaningless life. Like how a moth circumnavigates a light bulb only to die of exhaustion.

If you look beyond your shoulders, there will always be people who will be doing better than you. And if all you can do is try to be like them, you will end up playing catch up all your life that you will never have the time to enjoy what you have worked so hard to achieve.

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