Why LOOKING POOR Is Important

if you want to become rich you need to look poor today I'm going over five reasons why looking poor is so important and three things you need to start doing today first different classes perceive money differently people who are poor see money as something to use to clear their bills and get by in life the middle class see money as something they can use to get a bit of comfort they take on liabilities like getting a car loan or credit card debt but the wealthy see money as a tool they use it to buy assets

like stocks and real estate to generate more money which actually will pay for their liabilities take Warren Buffett for example he's worth over $100 billion but he still lives in the house that he bought in 1958 for $31,500 then there's Mark Zuckerberg most of the time he's just wearing a gray t-shirt and a hoodie and then there's Jeff Bezos who was still driving a 1997 Honda Accord years after becoming a billionaire saying and I quote this is a perfectly good car and also fun fact 61% of people who earn more than $250,000 a year are

more likely to be driving Hondas Fords and Toyotas the truth is wealthy people don't need to look rich because they have their priorities and they already know what's important to them they don't need to prove anything to anybody which is a fantastic mindset to develop if you know you're on your financial Journey whether that's to pay off your debt improve your credit score or build out your emergency fund then you already know that you're investing in yourself and you don't need to prove anything to anybody else next trying to look rich can get very very

expensive a 2014 fed report found that the gap between a household's income relative to its close neighbors will impact its level of debt in Psychology they call this keeping up with the Joneses and once you start doing that you're going to have a really bad time basically keeping up with the Joneses is when you use your neighbors as a measuring stick for success for instance if you're looking to buy a car so you can drive to work every day and you're about to pull a trigger on a toyoto Camry for about $20,000 cuz one it's

going to do the job well and two you can actually buy the car outright in cash because you've been saving up that $20,000 but then you see your neighbor with a brand new Tesla cyber truck so in order to keep up with the Joneses instead of getting the Camry you decide to get a $100,000 Porsche Cayenne you don't have the extra $80,000 but you're cool with taking out a car loan from just a thicker price difference alone you're expecting to pay an additional $80,000 for the privilege of looking like you're rich but then there's going

to be hundreds of dollars in monthly interest payments and insurance thousands in maintenance cost and 60% depreciation in value over time that $100,000 Porsche Cayenne is going to cost you over $150,000 when everyday people sacrifice their financial goals and take on debt just to buy a luxury product it's going to be really tough to get out of the debt spiral as of 2023 the average American has about $66,000 in credit card debt so if your credit card bill is $6,000 and your credit card has a 24% interest rate and you only make the minimum payments

every month it's going to take you over 25 years to pay off your debt of $1 17,330 which is nearly three times the original $6,000 amount thanks to interest but paying that off isn't even the worst part the bigger loss is the opportunity cost basically the money you spend on something is money not spent on something else so spending $8,000 more on a nicer car means you can't invest that $80,000 in something like the stock market if you invested that money instead in the S&P 500 with an average rate of return of 10% you'd have

over $200,000 in just 10 years enough to buy two Porsche cayen outright one to drive and one to keep as a trophy to shove in your neighbor's face but succumbing to societal pressures to look wealthy doesn't just lead to a spiral of debt it can also cost you your most valuable thing your peace of mind and your mental health a 2023 study found that the bigger the wealth Gap in neighborhood the worse their mental health is in Psychology they explain this with the social comparison Theory basically people don't necessarily feel bad or sad because of

their income whether they make $30,000 or $150,000 a year rather their feelings of sadness are relative to the income of those around them like you could be earning six figures a year you have a decent chunk of savings and you have your own house but if you associate with or live around multi-millionaires who own multiple vacation homes chances are you're going to be much more unhappy than if you a broke college kid living in a shered apartment with other broke college kids according to the social comparison Theory it's human nature to always compare ourselves to

something else whether that's strangers families or even neighbors the problem is constantly comparing yourself with negativity will impact your mental health and your personal happiness because there will always be someone wealthier than you and just speaking about mental health I want to talk about something personal like many of you I didn't grow up with money my parents did everything they could to save they bought my clothes in a bigger size so I can wear it years later and I realized that growing up without money you start to build a lot of financial baggage and Trauma

that negatively impacts you later in life but what I think is really helpful is therapy which can give you the strategies to work through this that's why I'm excited to talk about today's sponsor betterhelp better help's mission is to make therapy more affordable and accessible finding a therapist can be tough especially when you're limited to the options in your area better help is a platform that makes finding a therapist easier because it's online it's remote and by filling out a few questions better help can match you to a professional therapist in as little as a

few days it's easy to sign up and get matched with the therapist check out the link below it's betterhelp.com Vincent Chan clicking that link supports the channel but more importantly gets you 10% off your first month of better help and because finding a therapist is a little like dating if you don't really fit with that therapist you can easily switch to a new therapist at no additional cost without stressing about insurance or who's in your network if you ever went through or going through a hard time consider online therapy with betterhelp click the link in

the description or visit betterhelp.com Vincent Chan thanks again to better help for supporting this video next trying to look wealthy will make things more expensive for you a 2018 study asked people how much they would charge a potential client for their services some people were shown a photo of the potential client who looked really fancy and wealthy and some were shown the same exact person but this time just a bit more casually overwhelmingly participants quoted the potential client who looked really wealthy a significantly higher price for the same exact service in another study participants were

asked how much they would charge someone with a new Mercedes-Benz versus an old Mitsubishi car for a car wash and again participants quoted a significantly higher price for the mercedesbenz so unless you want to pay extra money for the exact same service then you might not want to address really fancy but it's not just that people will charge you more money you might even have fewer authentic connection and friendships many of us want to look wealthy to feel like we've made it and to be accepted in society it's like saying look at me world I

have this fancy watch a luxury car I've made it I'm not a failure I have value so let's be friends but the raw School of Business found that having flashy displays of wealth might have the opposite effect of what you were hoping for in the study they showed 395 people social media profiles of other people some profiles had modest updates about their lives while other profiles showed off luxury stuff expensive clothes cars and holiday vacations although people with flashy post were thought to be wealthier in higher class participants thought they were status signaling and believed

that these people were more self-interested as a result fewer people were willing to form genuine connections with them and they were less likely to be invited into social groups in this case the cost of appearing wealthy seems to outweigh the benefits in social situations which defeats the purpose of wanting to look wealthy in the first place next looking poor will allow you to focus on what really matters like for me that's becoming financially free so I can retire at 35 without a care in the world if you're not trying to keep up with the latest

trends or impress others like always buying the latest phones the nicest clothes or brand new TV so you can see the hair follicle of Leonardo Caprio then achieving your financial dreams such as retiring 20 years earlier becomes much more attainable for every 5% of extra income that you save you can retire multiple years earlier for instance if you earned the median income of 65k per year and you save 10% or $6,500 you can be financially free in 51.4 years but if you could just save 5% more at 15% you could be financially free in 42.8

years for just 5% more effort you can shave off more than 8 years that you need to work but it's not just that you're able to save more money it's the fact that you've transformed your lifestyle so you need less to be comfortable for for instance if you used to live on $80,000 a year but you've managed to reduce your expenses to 60,000 a year you now need significantly less money to retire comfortably now I'm not saying you have to look homeless rather I want you to find your financial balance and here are three things

that helps me a lot with this first shift your mindset from wanting to have things to show that you're successful to wanting to achieve your financial dreams I want you to make that Financial dream that you want to be your measuring stick for success because at that point if you're working towards your dreams or you're already there it doesn't really matter what anybody else thinks about you for instance like I mentioned earlier one of my financial dreams is to become financially free for me that's when I know that I've achieved success I couldn't care less

about what anyone else thinks of me because I know at that point I can help my parents out financially when they need it I could travel the world whenever I want and I could attend my future kids events like their sporting events or their concerts or theater performances without ever having to say sorry work out in the way and it's having access to those opportunities is what defin success for me even if nobody else knows it if you want to achieve your financial dreams but you're not really sure what you should do next I created

a free five question quiz that will customize your personalized wealth plan it's completely free you can get it with the link down below next implement the Box strategy a big reason most people want to look wealthy is that they evaluate their own worth based on how they compare themselves to others if your friend looks wealthy then you probably also want to look wealthy to show that you're worth it the problem is it's a never-ending cycle of comparison there will always be someone more successful and wealthier than you like Warren Buffett one of the richest men

in the world he has less money than Bill Gates and both have less than Jeff Bezos so instead of this pointless comparison I want you to use the Box strategy think about all your past Financial accomplishments and put them in a box now your objective is to fill up a new box with bigger and better stuff than your old box this way rather than comparing yourself to others you're comparing yourself to your past self which is a much healthier and more effective strategy for me I used to commute 2 hours every single day to go

into the office and I work 70 hour weeks I was completely miserable but today I finally achieved the freedom to work on my dream so sure I don't have three mansions and six Lamborghinis but I'm in a much better place than I was a few years ago and that makes me really happy next and this leads me to something that you've got to start accepting even if you're doing all these steps and you're trying to get better with your finances sometimes you might still feel like you're not doing it enough and this might be because

you don't know the middle class habits that keep people in the rat race click here to find out if you're committing these middle class habits and what you need to do instead