I’ve been doing online surveys and focus groups for years as a way to earn a little extra cash in my lazy moments. I get a lot of surveys about the economy, credit cards, and financial services. Most of them are all the same, boring questions. Recently, though, I got a survey about “wealth” that made me howl with laughter.
After determining that I was “wealthy” enough to participate in this survey by asking about my income and the source(s) of it, the questions turned to my purchasing habits in regards to luxury brands. Do I purchase luxury brands? If so, which ones? How much do I spend on luxury brands? We went on with this through luxury cars, clothes, watches, travel providers, and perfume. Then it asked about how much advertising I watch, particularly advertising for luxury goods. Do these ads influence my purchases? Do I make it a habit to seek out advertising for luxury goods? Then it asked about my friends. Do I buy what my friends do? Do their tastes dictate mine? Are my friends “equal” to me in terms of wealth? The howler came when the questions turned to my use of private jets (which I suspect was what was at the heart of this survey all along). Do I use private jets? How often? What’s an acceptable wait time for a jet to become available. And so on.
All through this survey, I’m checking, “No,” or “Does not apply,” for every question. I don’t buy luxury brands, I don’t watch much advertising and I certainly don’t seek it out, and my friends don’t dictate my tastes. And I certainly don’t use private jets! I’m sure there’s a researcher somewhere who’s now scratching his head and wondering how it is that I had enough money to qualify as “wealthy” for this survey, but yet I don’t spend like the wealthy or participate in the activities of wealthy people. (Yes, I realize that the researchers were likely looking for a stereotypical wealthy person so they could validate whatever notions about the wealthy they have. If that was the case, a smart researcher would have added some other questions to disqualify people like me. Anyway…)
What this survey fails to address is the fact that maybe I am wealthy precisely because I can check “No,” to all of their questions. I don’t make an astronomical income, but I spend what I make wisely. I practice frugality and I choose to live in a low cost of living area. I save rather than spend and I’ve done that on a consistent basis from a young age. I wouldn’t be nearly as wealthy if I were blowing all of my money on luxury stuff and private jets.
Many people who are wealthy don’t live overly spendy lives. Many got there by banking most of a modest income. Sure, you’ve got your Trumps and Hiltons in the world who can blow great wads of cash on all manner of luxury services, but many of the world’s millionaires don’t live like that. Many wealthy people achieved that level because they lived below their means, invested carefully, and spent wisely. And they continue to do so throughout their life. They don’t reach a point where they say, “That’s it. I’m wealthy so it’s time to start buying luxury cars and private jets.”
Many (certainly not all, but a fair number of) people who spend lavishly aren’t wealthy. They may have a large income, but considerable debt. Or they may not have debt, but they don’t have any savings, either, because they are spending all of their money on luxury items. That’s what this survey didn’t really address. There is a difference between income and wealth. You can have a high income but no wealth, and you can have a relatively low income but be quite wealthy. Just because someone spends lavishly and drools over luxury goods doesn’t make them wealthy. A smart survey team would have asked about net worth rather than income. Net worth is a better marker of wealth than income, because it represents what you’ve managed to accumulate, not what you can spend.
I hope that more of the respondents to that survey answered as I did, and that the researchers learned that many people who are wealthy are not slaves to luxury. A love affair with luxury items does not equal wealth. Many wealthy people are exactly the opposite, and that is what has made them wealthy.
(Photo courtesy of brewbooks)