Wealth and the appearance of wealth are two very different things. Social media makes it easy to look successful even if you’re drowning in debt.
Here are three things that look “rich” but could quickly land someone in financial trouble.
1. That shiny new car in the driveway
Everyone knows a fancy car is not a practical purchase. Still, many don’t realize how big of a financial drain it can be.
The average new car payment in the U.S. is over $700 a month, and luxury car payments are often over $1,000. That’s before insurance, which might cost $200-plus per month.
Let’s put that in real terms.
Say you pay 10% down on a $65,000 SUV and finance the rest over 72 months at 7% interest.
- Monthly payment: $997
- Total interest paid: $13,310
You’d end up paying $78K — and by the time the car was paid off, it would probably be worth about $35K. That’s a gigantic waste of money.
What rich people actually do
People who are wealthy (and savvy) tend to buy a car in one of two ways:
- They pay in cash for a car they can easily afford.
- They get a loan with great terms so they can keep their cash invested.
If they do finance their car, they typically:
- Put 20%-plus down
- Keep the term to 48 months or less
- Shop around and get the lowest rates available
If you can’t check these boxes, then you should look for a lower-priced car.
2. The designer wardrobe
Clothing is one of the easiest ways to fake wealth. Buy now, pay later (BNPL) services like Klarna and Afterpay make it simple to spend money you don’t have in small installments that feel harmless. A $60 payment here, $80 there.
But it adds up fast. Before you know it, you could be swimming in high-interest debt.
What rich people actually do
They think in terms of cost per wear. A $400 blazer worn twice a week for three years beats a $60 top worn only once. A well-made pair of boots that lasts a decade can be a bargain.
They buy less, choose carefully, and pay in full.
3. The beautifully decorated home
A well-styled home — matching furniture, thoughtful decor, expensive artwork — gives the impression that someone really has it together. And it’s never been easier to pull that look off while being in financial shambles.
Furniture financing, store credit cards, and home goods installment plans mean you can furnish your whole living room on a monthly payment.
None of that builds equity, and it loses value fast. If your income drops, or you need to sell your home, then the throw pillows won’t help.
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What rich people actually do
They put their financial cushion before their couch cushions. When they do upgrade their space, they’re just as likely to shop on Facebook Marketplace or at estate sales as they are at a furniture showroom.
What these three things have in common
They’re all visible. You can photograph them, show them off online, and flaunt them in front of friends and guests. They’re also things you can buy with money you don’t have.
Real wealth tends to be invisible. Nobody can see your savings account, your 401(k), or your sparkling credit report. But anyone who’s actually rich will tell you that these are the things that matter most.
