Recently, Kyith Ng from Investment Moats wrote about his thoughts on an interesting article by Morgan Housel, the author of the book “Psychology of Money” (Maybe I could do another post on this long article). It talks about how your family background and past experiences with money can have a significant influence on your financial behaviours and decision-making in the future. All these unique individual experiences could shape your habits, attitudes and beliefs towards money which could affect your future financial well-being (positively or negatively). If you could gain a better understanding on these influences, it might help you make more informed financial decisions and take gradual steps towards improving your own financial literacy.
I grew up in a lower middle-income family where some relatives constantly compare their kids on who is doing better in terms of school or career, where they stay and what they drive etc. Guess you know what I’m driving at and this Lunar New Year gave me new insights towards these behaviours.
This year, one of my distant relative mentioned about his daughter having a dilemma on which luxury watch to wear on the first day of Lunar New Year. She even quoted the exact five figure price tag of some of the watches her daughter owns while flaunting her own gold watch in front of everybody. I believe that some of you might have encountered all these before and might feel frustrated, discouraged or even disgusted with all these flaunting of wealth by some of your friends or relatives.
Ironically, another relative who stays in a huge, landed house put on no airs about what they own. They dressed simply, displayed great humility and hospitality to everyone. Its really great to see this relative has not let wealth and success change their humble and hospitable nature. Their attitude serves a good reminder that wealth and material possessions do not define a person’s self-worth or success. Instead, it’s the qualities and values that one embodies that truly make them successful.
This relative’s journey from humble beginnings to financial stability and success is a testament of perseverance, work ethics and determination. They have overcome their challenges growing up in a poor family and achieved their goals through hard work and serve as inspiration for everyone.
The stark contrast between the two relatives is an interesting observation which highlights how your past experiences and values shape your attitude towards wealth and success. One’s journey towards financial stability and success which includes the challenges they faced and how they overcame them, can play a significant role in shaping their world view towards wealth. For someone who worked their way up from humble beginnings and made sacrifices to achieve their wealth may value humility and work ethics over flaunting their wealth. On the other hand, people who inherited their wealth or obtained it through means that they are not proud of may flaunt their wealth as a way of compensating for their insecurities or guilt. So all these spending might have a deep-seated psychological need. Below are two great examples of these extreme contrast of one’s view of wealth.
It’s also worth noting that wealth does not equate to happiness or fulfillment. The relative who showed humility and hospitality despite their success may have found a greater sense of satisfaction and contentment in their life than those who flaunt their wealth. It’s important to find balance and focus on what brings you happiness and fulfillment in life, rather than just material possessions.
In my own personal journey from being in debt to attaining certain level of financial independence did kind of shape my perception of wealth and being a minimalist further reinforce my detachment towards material possessions. At the lowest point of my life when I was in debt due to my business exit, I was forced to let go of almost all my possessions which includes my very first car and some of my valuables. Interestingly, I felt so deprive of possessions that I use some money that was left with to buy a nice mountain bike just to make myself feel a little bit better. But at the same time, I also felt more carefree when I had lesser possessions. Now on hindsight, that was a fascinating phenomenon.
Its common for people to attach emotional value to their possessions like my own experience with the mountain bike, as I used it to improve my emotional well being when I lost everything. But its also important to remember that true wealth came in the form of financial stability instead of material possessions. All these led me to discover minimalism many years later to find out what is truly important in my life and not get too caught up in the accumulation of material possessions.
When you hit certain level of financial stability, the happiness you get out of material possessions diminishes as well as your need for validation. Being oblivious to all these comparison game to see who has more material possessions or success allows me to focus on what is truly important in my life right now.
I don’t think there is inherently wrong to own material possessions or expensive items but its more of the intentionality of owning it in the first place.
Please share your own personal experience so that we could learn from each other perspectives.
You may want to learn more about my life story towards minimalism and financial independence from this link.
*