Why Status Signalling Is A Waste Of Time And Money
Signalling is nothing new to human nature, or animal nature for that matter. In the animal kingdom, when a male goes to select a mate, they perform an elaborate display to attract and show prospective partners they are a ‘somebody’ of this world.
In the human world, status signalling has become increasing popular due to a desire to merely be seen as a ‘somebody’ of society. As consumerism increases, it is more tempting for us as individuals to differentiate ourselves from others through the purchase of goods, or more specifically, luxury goods.
But with high value goods currently at mass-production, cheap labour and materials, and a demand to retail at much lower price points, for wealthy people, signalling using luxury goods has become far less appealing.
It has been said status signalling often happens amongst people who are earning much less than the person they portray themselves to be, who then spend a high portion of their earnings on ‘status goods’ in an attempt to create the illusion of the wealth. It begs the question, for those of us who are not in the 1 or even 3%, how many of us are inclined to purchase luxury goods solely to impress our peers, make new friends, or be admired by a circle of people we’ve never met before?
The effects of status signalling
Unless you genuinely have it, spending your hard-earned money to simply signify wealth is probably the fastest way to not have it at all. Going broke trying to look rich prevents your money and time being invested into something more worthwhile and with a bigger return. When you focus on status signalling through things, all you have in the end are things, these things are also known as liabilities, and what comes with that are a list of negative side effects including:
Throwing yourself into a huge amount of debt
Pressure and stress from trying to keep up with the Joneses
Not being able to be yourself
Building a bad relationship with money
Surrounding yourself with disingenuous friends
Instead of losing your money to liabilities, put your focus into assets, experiences, and things which will help you generate real wealth, long term. What’s really impressive is when you spend your money on:
· Further education, learning, courses, studying, books
· Saving to buy a beautiful home
· Buying your dream car
· Starting your own business
· Investing in property
· Your health
· Saving for your children to go to university
· Travelling the world
The current identity of wealth and status
With this new wave of ‘accessible luxury’ and high-end designers aware of the façade displayed on social media and pandering to consumers whose only desire is to appear wealthy, those of true wealth want minimum to no parts of affiliation with the ‘wannabes’ of society, and as a result (and in not so many words) have decided to move the bar of what wealth really looks like.
As the once exclusive leather goods of Louis Vuitton become abundantly noticeable in influencer giveaways, and carried under the arms of who society would deem average, wealthy people are beginning to replace material goods as an indicator of status, with creating a better-quality way of life. Wealthy people understand that things are just that, but know to really live a great life are done through experiences, services and exclusivity which trumps elaborate spends on possessions.
Money talks, wealth whispers. For the wealthy it’s all about spending discreetly, or as they call it ‘inconspicuous consumption’ to improve the quality of life, here are some of the ways how.
Investing in education
Buying organic foods
Private healthcare
Monthly subscriptions to newspapers and news outlets such as The Financial Times, The Economist, Business Of Fashion
Health club memberships
Travelling to exotic places and staying in upscale resorts
Being able to speak multiple languages
Speaking fluently in financial lingo
Final thoughts
Although spending money to impress others is not a smart move to make, this is not to say you shouldn’t enjoy the things you like. But think about why you’re buying it, ask yourself if the world couldn’t see what you had would you still spend your money on it, if you couldn’t show social media what you’re wearing how much would you care to wear it?
To put things into perspective, people do not care about what you are doing as much as you think. A psychological term called the ‘spotlight effect’ is where people are of the assumption that others are thinking about you more than they actually are. So, before you spend thousands on a bag you couldn’t afford to buy twice, in the hopes that someone, somewhere, will be impressed by it, the reality is after being wowed for those first few seconds, they probably won’t care and return to more important matters in their own lives. I am the first to advocate for the soft life and main character energy, but not at the expense of my expenses, and besides the most impressive badge of status is the ability and freedom to completely be yourself.
Resources
Books to read - The Psychology Of Money - Morgan Housel
