Few people just want to have money for no reason. Most people want to have money because of what they want to spend it on; their outrageous expenses are their passion in life and their reason for wanting money. It isn't helpful advice to say, "Don't spend money on Manolo Blahniks, and then you'll have plenty of money," if your whole reason for wanting money is so you can wear Monolo Blahniks.
In other words, it sounds like a sermon on loving money for itself instead of loving it for what it can buy you. Or, if you read it charitably, it's a sermon on loving security more and short-term pleasures less. As much as I sneer at expensive fashion and gravitate toward the <$10 wine bin at the grocery store, this article strikes me as nothing but unhelpful moralizing. Yeah. I get it. If I don't spend money, I'll have more. Yeah, I really, really get that looking good and living it up is a vacuous pastime -- I'm totally with you on this one -- but it's the most common passion on the planet, and it's a cop out to tell people to stop enjoying the one aspect of life that gives them the most pleasure and call it financial advice.
Most advocates of saving that I’ve seen in mainstream media are interested foremost in personal finance, not anti-consumerism. To them, the problem isn't that people enjoy spending money. On the contrary, they want to help people spend their money in a way that maximizes the amount of enjoyment derived. Writers like Stanley know that spending a lot of money early in your working life is rarely a way to maximize enjoyment.
What a lot of people don’t realise is that “short-term pleasures” cost a lot more when you’re older. In your 20s and 30s, you don’t need much more than a computer and a bicycle to be perfectly content. You have lots of energy to work, study, take cheap outdoorsy vacations, and cut your own lawn. But at some point, you start to find those things significantly more wearisome. That’s when it’s really nice to have the financial freedom to quit your job, eat in good restaurants, and outsource all of your home maintenance. By far the majority of people won’t achieve that level of financial freedom unless they defer a large proportion of their income from the first half of their career to the second half and to retirement.
Evidently, many people must overcome significant psychological obstacles to save their money. That’s why there are so many personal finance books trying to explain the same idea in different ways. Some emphasize the time value of money. Others, how expenses tend to increase over one’s lifetime. Stanley tries to reduce the urge to spend by showing that many big spenders are not actually rich or financially secure. The success of “The Millionaire Next Door” seems to be evidence that a lot of people find this approach helpful.
You might call it unhelpful moralizing, but I would consider it helpful if it alerted people to the pretentious nature of their social signaling and got them back on track financially. Deferred gratification is an important lesson to learn.
I don't know about this. You really aren't enlightening people by saying stop spending money and you will have more money. People aren't stupid. This is the same kind of story as people are fat because they don't know what kind of foods to eat. It's just not true. Everyone know what kind of food to eat, they just don't.
I once went to a nutrionist and she ask what I eat for breakfast; I told her and she said "you know how many calories were in that bagel?" and I told her. She looked puzzled, then I told her "I wasn't fat because I was stupid"
Behaviors with food and even money are learned early on and until people choose to unlearn them; they will be fat and poor.
Assume for the moment that this article was read by everyone on earth. Now you're considering buying a BMW. Would it change your mind to know that people may think "he's irresponsible with money" instead of "he's rich?"
If so, then getting the word out may actually help people make better decisions. If they still want the BMW for other reasons, fine.
You don't have to spend money straight away, you can use money to make your life comfortable, or buy crap. Money does not have a time limit on it.
It is not just about spending less, it is about getting people to realize that rich people do not do show of there riches buy buying crap. (86% of luxury cars are owned by people with less than <$1m). So maybe you should not buy that crap either?
It is only a recent event that we have become such a consumer driven society, just after WW2 when we had all this extra factory producing capabilities (due to the war), and the advertising industry really kicked it up a notch.
I agree with most everything you said, but money does have a time limit in effect. If you hold cash it will become worth less over time. If you invest it your investment may go down.
Some people are buying nothing but garbage (there are whole markets based on selling garbage), but I think right now there are also people trying to move the money they have right now into some other source they trust more. If you try to build a house in Switzerland right now be prepared to wait. A lot of people have emptied their pensions to build houses (they cost a lot in Switzerland) since the crisis hit.
OK, but I think the point is that 1) status symbols may actually be debt symbols, which makes them less attractive, and 2) people who can buy fancy stuff often don't, which demonstrates their belief (maybe true) that it's not worth it.
Secondly, there's a lot to be said for peace of mind. Who is richer: someone who lives in a fancy house and constantly worries about losing it, or someone who lives simply, has no debt, has saving, and can basically do whatever they want?