The American economist and political philosopher Thomas Sowell said, “When you want to help people you tell them the truth, when you want to help yourself, you tell them what they want to hear.” He was talking about politics but there is another industry that powerful truth reminds me of.
I like to think of the luxury goods industry as the “Tell-them-what-they-would-like-to-be-seen-as-industry.” Luxury goods, historically, were the province of the well-to-do. Please allow me to correct that; the very well-to-do. Over the last few decades, that has changed enormously. That change has not been for the better.
Today, a good number of folks, with rather modest net worths, can, to paraphrase the title of a Ricky Martin song, live la vida loca (live the crazy life.) And a crazy life it is, if we give more importance to luxury goods than to building our wealth. Credit cards and easy credit have given people a false sense of wealth and a mentality of entitlement to go with it. In reality, it is a form of economic indentured servitude in which we stop owning our things and our things begin to own us.
Marketing has turned many people into low net worth credit slaves.
Wealth building, on the other hand, means saving some of the money we worked so hard for so that it can go to work for us. Saving money and constructing a balanced portfolio – I like to call it a beautiful financial mosaic – can help us to stop worrying about the adversities that life often has in store for us.
A luxury car, luxury watch or luxury handbag offers us nothing in the face of sudden illness, a business reversal or an economic downturn. Actually, that is not quite true. It might offer us the necessity of keeping up with credit card bills we should not have in the first place. That’s like being thrown an anchor while we are drowning.
If you think about it, no true friendship or romance ever took hold because we paraded around with some bauble or trinket of rampant consumerism. No one ever became a captain of industry – with an enduring track record – simply because they peacocked around draped in luxury goods.
You see the luxury goods industry plays to our egos and insecurities. The marketing mavens helping to sell those goods work at convincing us that we are less than our peers if somehow, we do not own the frivolous goods in question.
I am not against luxury goods; however, I need to add a proviso. I am not against luxury goods as long as a person can truly afford them. And that means that they are living within their means rather than living la vida loca; spending all their money or using credit cards so they can buy goods that stoke their egos, helping them portray themselves as the economic superstars they wish they were.
Here is the deal. For most of us, virtually all of us really, we have a choice. We can be wealthy, or we can appear wealthy. I want every one of us to become an economic superstar rather than just looking like one. Luxury goods are nice, but the greatest luxury is not having to worry about your financial state of affairs. Consider speaking to a financial services professional about putting together a well balance financial plan. Then take action.
Scott R. McGimpsey July 10th, 2017
This material was prepared by Scott McGimpsey and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources, however, we make no representation as to its completeness or accuracy. Neither Summit Brokerage Services Inc. nor Scott McGimpsey is engaged in rendering legal, accounting, or other professionally services. If such assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any federal, state, or municipal tax penalty. Moreover, a diversified portfolio does not assure a profit or assure protection against loss in a declining market. UNIFIED PLANNING GROUP is an independent firm with securities offered through Summit Brokerage Services Inc., Member FINRA, SIPC