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Will You Welcome Luxury or Be Wealthy? The Choice Is Yours.

20120314 - what is wealthAfter continually researching and writing on this blog for the past four years, I have stumbled across quite a few money principles. A few months ago, after seeing my boss’s new Infiniti SUV, I discovered that with this one purchase alone she postponed her retirement by about 10 years and wasted almost a million dollars when considering the invested value of her money in the future. Beyond this, I have ingrained into my mind the discoveries of Dr. Thomas J. Stanley in his book, “The Millionaire Next Door“, that almost everyone that is truly wealthy does not live at or above their means, but far beneath them. Instead of living in a huge mansion with fancy cars, most millionaires live in middle class neighborhoods and drive a slightly used domestic car.

Based on these discoveries, I have been lead to the conclusion that almost every one of us has a simple choice to make. Either we can live in luxury or we can be truly wealthy, but we cannot do both.

Welcome Luxury or Be Wealthy

If you are earning less than $100,000 per year, then you should definitely not be driving that luxury car or living in that 4,000 square foot house. Sure, you may be impressing your broke friends, but you are doing absolutely nothing for your wealth. That big house is eating away much of your cash flow with monthly payments, utility bills, and maintenance costs. Your expensive car is taking hundreds of dollars out of your pocket every month in the form of payments, insurance, and again, costly maintenance. Along with the fancy house and the luxury cars comes expensive lifestyle costs (because you can’t own expensive stuff and then look like a chump by trying to save money all the time) like pricey dinners, live entertainment, and swanky vacations. Face it, your luxurious vacations are keeping you broke and you will never really know what it means to be wealthy.

If, however, you decide to live below your means, you will likely have no debt, your maintenance costs on your simple assets will be minimal, and your cash flow will be enormous – so much so that your biggest problem in life will be in deciding what in the world you will do with all your money.

So why is it that some people still live the luxurious life and ignore the principles of wealth? Let’s take a look at the pros and cons of living in luxury.

Pros and Cons of Living in Luxury

luxury pros and cons

Many people absolutely love the idea of living in luxury, but what are the true pros and cons of doing so on a meager salary? Sure, your friends will be impressed and you can enjoy your house, cars, and boat while you are young, but do these pros really outweigh the cons?

In order to live the luxurious life today, you basically have to finance it (with your mortgage, car payments, and your boat payments), which leaves behind a whole slew of cons. By spending all of your money today (and then some), you will not be able to invest in your retirement, which means that you better get used to eating eggs and spam, because that might be your diet for the last 20 years of your life! And, because you will have saved up nothing during your working years, you will have nothing to pass on to your children. I consider this to be quite selfish and unloving.

However, maybe you won’t even live that long since you’ll be under the constant stress and worry of making your monthly payments. There are many people that bury themselves into debt because they desperately want to live in luxury, but then they can’t even enjoy their luxurious stuff because they are out working 24/7 to keep up with their payments. Some choose to live this way, but I certainly have no desire to jump on board this train.

Long Term Thinkers Choose Wealth

Those that choose to live in luxury are typically short term thinkers. They do not take the time to process what their actions today might mean for their future. By purchasing assets on credit today, they are guaranteeing themselves a retirement of frugality and poverty.

Long term thinkers, on the other hand, understand that if they live simply today they can live without worry and fear in the future. They often do not even care about luxury because they don’t stop to think about what others think about them. It is of little importance how their peers perceive them, and this in turn allows them to be even more happy. Instead of doing what they think might impress their friends, they think about what is important to them and their families. This typically leads to them taking trips, experiencing life, and helping those in need. Their happiness level goes up along with their bank account. Their wealth continues to rise simply because “stuff” means little to them.

So what do you think? Will you continue to live in luxury, or will you choose wealth?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. When we stop to think about it, of course it makes sense to save for the future instead of spending everything we earn now. But who stops to think? And who stops to think early enough? These are lessons we need to learn in school, not half-way through a working life when we’ve already racked up a mountain of student loans and mortgage debt. In my (not so) humble opinion, Personal Finance should be a compulsory subject alongside Maths and English.

    • Very few do stop to think unfortunately. And many realize that they are far behind with their savings when it’s too late. Hopefully this message will get out to those that would not have thought about retirement before, and give them a chance to change their future!

    • I agree, if schools are there to prepare us for working life then learning how to manage money should certainly be taught as well. I’m glad I caught on early enough but sometimes I wish I’d learned it even sooner. I would be further ahead now if I’d started taking things seriously 10 years back. That is why I feel it is important that we bloggers keep on spreading the word.

      • In the near future (when I muster up the courage), I really want to take this message to various high schools in my area. Many students probably won’t take the advice, but at least they will then have the knowledge if they want to use it!

  2. I choose wealth! The Millionaire Next Door is hands down my favorite personal finance book. And the funny thing about impressing your friends with fancy cars or huge houses is that they don’t stay impressed for long. They quickly go back to thinking about how they can buy a nicer car or live in a bigger house. And if you must spend money, at least spend it on experiences and not a luxury SUV.

    PS – Love the idea of taking the message to high school kids. It will probably be the first time anyone talks to them about this stuff.

    • Thanks for the encouragement in the high school talks. It is something I have wanted to do for a couple of years now, but public speaking isn’t exactly my favorite thing to do in the world. Thanks for the comment!

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