Why It Feels Like You Are BEHIND Financially
If you scroll social media today, it may seem like everyone is doing better than you. People are taking extravagant vacations, buying luxury cars, and living in high-rise apartments—always appearing to do more than you. This might even be causing stress or anxiety in your financial life.
But let me tell you something: you are not behind. It may feel that way, but most people are not managing their income well. They stretch their dollars beyond their budget and have much less in the bank than you’d think.
Here’s a perfect example:
- If you drive a $150,000 G-Wagon, everyone assumes you’re wealthy.
- If you drive a 2014 Honda Accord but have $150,000 invested, people assume you’re broke.
But here’s the truth: Wealth cannot be seen with the naked eye. Most millionaires are hiding in plain sight.
The Illusion of Wealth vs. Real Financial Success
The book The Millionaire Next Door revealed that:
- Most millionaires are private about their wealth to avoid pressure to spend more.
- They live below their means—driving reliable cars, living in modest homes, and skipping designer brands.
Why? Because flaunting your wealth can cause you to lose it. At the very least, try to look 25% less wealthy than you actually are. This ensures you’re spending less than you make and investing the difference.
Building wealth is simple, but it’s not easy. Let’s break down why what you see from others is often just an illusion.
Reason #1: We Naturally Compare Ourselves to Others
Whenever you see someone driving a beautiful car, do you think, Wow, they look cool in that car, or do you think, Man, I would look cool in that car?
For most people, it’s the latter.
We instinctively compare ourselves to others—it’s human nature. But recognizing this habit can help prevent financial stress.
The Psychology of Comparison
Leon Festinger’s Social Comparison Theory explains that we constantly evaluate our own status based on others. But the problem is that most of what we envy is an illusion.
Many of these lifestyles are built on debt:
- Luxury cars? Leased.
- High-rise apartments? A major chunk of their paycheck.
- Designer clothes? Purchased with credit.
In fact, debt levels are rising so fast that when I see someone in a brand-new truck, my first thought isn’t, Wow, they’re rich!—it’s, Wow, they’re probably broke.
What Matters More? Net Worth.
Stop tracking someone else’s highlight reel. Start tracking your net worth. Use tools like Monarch Money to measure your financial progress—the only scoreboard that truly matters.
Reason #2: Invisible Spending Habits
Most spending happens behind the scenes. Your friend who takes luxury vacations might not be saving for retirement. Meanwhile, your coworker who wears plain clothes and drives an old car might have six figures in their 401(k).
The Real Data:
- 39% of Americans couldn’t cover a $400 emergency expense (Federal Reserve).
- The availability heuristic (a concept in behavioral economics) causes us to focus only on visible wealth, ignoring unseen savings, investments, or debt.
Think about this:
- Someone spends $5,000 annually on concert tickets and vacations.
- Another person invests that $5,000 into a Roth IRA.
Over 20 years, assuming an 8% return, that investment grows to over $247,000. Invisible wealth beats flashy spending every time.
Take Action:
Celebrate your "invisible wins." Make a list of financial milestones—like hitting a savings goal or paying off debt—to remind yourself of your progress.
Reason #3: True Wealth is Stealth
The wealthiest people understand one thing: the less you flaunt, the more wealth you build.
What Wealthy People Avoid:
- Luxury house & car traps: Big expenses that eat into investments.
- High-interest debt: They aggressively pay it off or avoid it altogether.
- Overcomplicated investments: The best portfolios are simple—1-4 index funds, invested consistently over decades.
- Extreme lifestyle inflation: Some lifestyle upgrades are fine—but not at the expense of financial security.
Key Takeaway:
Stealth wealth wins the long game. If you can avoid flexing your money, you’ll end up with much more of it.
Reason #4: Understanding Trade-Offs
Most people don’t understand opportunity cost. Every dollar you spend today is a dollar that won’t grow for you in the future.
Example:
- Buy a $50,000 new car instead of investing that money.
- That car will depreciate to nearly zero.
- That $50,000 invested, growing at 8% annually, could be worth over $500,000 in 30 years.
Smart money decisions are invisible, but their impact lasts a lifetime.
Reason #5: The Illusion of Quick Success
Every day, social media highlights someone who “got rich quick.” But here’s the truth:
- 70% of lottery winners go broke within a few years.
- For every crypto millionaire, countless others lost everything.
Survivorship Bias
We see the winners—but not the thousands who failed.
Takeaway:
Ignore the get-rich-quick noise. Automate your investments. Stay consistent. Win over time.
Reason #6: The Grass Isn’t Always Greener
Getting ultra-wealthy requires trade-offs. For business owners, that means long hours, constant stress, and financial risk. For high-income earners, that could mean burnout or strained relationships.
Example: I worked on this article on a Saturday. That’s the trade-off I make for financial success. Would that sacrifice be worth it for you?
Take Action:
Ask yourself: Is the trade-off worth it? Every financial decision has an opportunity cost.
Reason #7: The Role of Financial Help
79% of millionaires are self-made. Anyone can build wealth, but today, more people are getting financial help from their parents than ever before.
Many Millennials and Gen Z are getting assistance with:
- Rent or mortgage
- Car payments
- Student loans
- Childcare
If you didn’t get a financial head start, create your own. Focus on increasing your income, starting side hustles, and investing in yourself.
Question for You:
Should you be self-sufficient, or is receiving financial help okay? Send me an email—I’d love to hear your thoughts.
You’re not behind. The wealth you see is often a mirage. True financial success comes from discipline, patience, and focusing on your own journey.
"Here’s your challenge: Stop comparing. Start tracking your progress—your net worth, savings rate, or financial goals. Remember: appearances can fool others, but they won’t fool you if you know your worth."
