Buying Status Symbols Does Not Buy Status!
Status is an interesting beast, and one I have commented on in the past. We all crave it - it is part of our human nature. Even anti-status people, like Hippies, have their own inverse-status symbols, like their Volvos and Subarus, and how many causes they are committed to. They will beat each other over the head arguing about who is more politically correct.
So don't pretend you don't crave or seek status - that is just wishful thinking and denial, and those are both activities that will get you into trouble, personally and financially.
Why do we seek Status? I think in part, to bring meaning to our lives. We want to think we are unique and different that everyone else, and yes, even a little better. And by better, I mean smarter, wealthier, more beautiful, younger, and even more politically aware. We want to be "with it" and look down on others as clueless. And again, we all do this, consciously or subconsciously, and no, it ain't a pretty part of our psyche - but there you have it.
In the old days, I think, status was achieved, not only by wealth, but by accomplishment. If you were very smart, for example, and wrote great books, or were a renown professor, you might have status from those accomplishments. Similarly, a respected Doctor or Lawyer back then was known for his abilities and contributions to their professions, rather than just how much money they made. And back then, Doctors and Lawyers didn't make as much as they do today.
And even if you came from an "old family", you might have Status. Louis Auchincloss wrote of the old monied families of New York, who in many cases had lost most of their money, but were still considered part of the "Society" set - often starving themselves for a month so they could put on a dress ball and keep up appearances of propriety.
When I was growing up, I knew families like that, who were members of the Country Club not because they bought their way in, but because they came from esteemed families or had a wealthy or renown family patriarch. Today, you just buy your way in to the Country Club. Nobody really gives a shit who you are or what you've accomplished, beyond what is on your W-2.
And increasingly today, people are confusing wealth with Status and worse yet, SPENDING with Status. People spend money thinking it will convey status upon them. But of course, it really doesn't. But an army of advertisers, marketers, bankers, and manufacturers will try to assure you that the right products, cars, credit cards, and the like will set you apart from the hoi polloi and make you something special.
A credit card company promises you that if you get their 20% interest rate card, that you will get special tickets to concerts and be admitted behind the velvet rope of status. You will be apart from the unwashed masses and their worn Discover cards. You will part of the special elite!
And in cars - even crappy cars - the same holds true. Quick: What is the most popular model of car in American today? Answer: The LE (Limited Edition) model. Yes, even a lowly econobox can be had in "Limited" or "Special" edition forms, which of course, are not limited or special at all.
And this goes back to the 1940s, when Chevrolet discovered that instead of calling the cars the 150, 170, and 210, you could sell a boatload more by calling the top model the "DeLuxe".
And when that wore out, you could use "Bel Aire" and then "Impala". And when everyone had an Impala, you could offer a "Caprice" and then a "Caprice Classic Brougham" - each new level being touted as the "new" exclusive model to have, and the last exclusive model downgraded to the "entry level".
Of course, people then started shopping entire brands of cars for status, such as BMW and Mercedes. Lexus tried to jump on this bandwagon, but has had a hard time shedding its "Loaded Camry" image. As I noted in an earlier posting, what constitutes a luxury car anymore is anyone's guess. As a recent USA Today article noted (It was in the hotel lobby) the number one option on the Ford Focus and the Hyundai Elantra is heated leather seats - and both are entry-level cars. Even the poor have power windows, cruise control, and A/C these days.
So you can buy an expensive car, and it really doesn't mean much, in terms of real value. And in places where everyone has an expensive car (Miami, Washington, New York) not many people are very impressed with the fact you have a Lexus, BMW, or Mercedes. Heck, in Miami, your cleaning lady drives a BMW, so what's the big deal?
And in many instances, very poor people buy very expensive cars. The stereotype of the shotgun shack with the new Cadillac parked out front is very real, at least here in Georgia. And from a strictly "Status" point of view, it makes sense. You can't tow your house around to impress people, but folks do see you in your "ride". So you live with Momma and drive a Mercedes - and show people that you've "made it" when in fact you can barely make the payments.
But besides cars, there are other ways our Corporate Overlords try to sell us Status (and pick our pockets). Upgraded status with services is one tactic. If you become a "frequent flyer" on an airline (and forgo shopping on price) you may be upgraded to silver, gold, and then platinum status - and be offered early boarding, free upgrades, and of course, entry to the Admiral's Club or whatever.
And people fall for this nonsense. They think that by virtue of the fact that their job makes them fly all over the place, that they are somehow better or different that Joe Vacationer, who flies maybe once a year. Half the fun of flying first class is, after all, rubbing it in the noses of the plebes in coach. That, and the legroom and free drinks.
Of course, if you are really rich - and by that I mean wealthy, not merely having a high income - you can afford to buy a fancy car, a fancy house, and first class airline tickets (and pay retail, not sleaze in on some upgrade program). But that is only if you are really rich.
THE TRAP FOR THE MIDDLE-CLASS is that many of us try to buy our way into the club - or more precisely, SPEND our way in. And I've seen this happen many times, and it backfires in a big way.
For example, Joe and Josephine Middle-Class decide to buy a big new house during the housing boom. The new tacky mini-mansions at Foreclosure Mews Estates sure look impressive! So they buy one of these cheaply made but impressive-looking monsters using some fancy toxic-ARM mortgage.
Moving in, they convince themselves they have now "made it" - as they have this nice THING that cost a lot of money - which they can afford, of course, because the bank said so. And they start to look down on their neighbors who live in more reasonably priced homes financed using conventional mortgages.
And of course, once you have the house, you have to have the furniture - and the cars, too. And since you are rich now, you can afford to eat out at the best restaurants and buy the best designer labels. And before long, they start to think they can really afford this crap - all on credit of course - and are, in fact entitled to it all.
When the housing market went bust, well, their whole world-view was shattered. They were entitled to this level of status, and now they could no longer afford to spend to keep it up. And as a result, we see people desperately hanging onto upside-down houses, when they probably should be walking away.
These folks never really had the status, though. They were just spending their way into the club - and spending their way into the club using borrowed money. Spending your way into the club, of course, is not the same thing as being a real member, simply because spending is not real wealth, but actually the opposite of wealth. And of course, once you run out of borrowed money, your tenuous grip on club membership evaporates in an instant, and not only are you no longer pretend wealthy, you are in fact, flat broke.
Of course, to some folks, this just means declaring bankruptcy, petitioning the government for relief, and then starting all over again. And unfortunately, it seems a lot of people in our society think this is a fine and wonderful idea. But let's leave politics aside, for the moment.
How do you avoid the STATUS trap? It is very hard to do. We all are inclined to seek status, and in fact, we will mortgage our souls (or at least our houses) to get it. It is our natural instinct to spend more than we make, often to keep up appearances. There is no status in economizing or saving - until you've saved enough to have a large net worth and retire.
One approach is, of course, to try to find Status items at bargain prices. I have a friend who loves Chanel clothing and accessories. But she rarely buys anything new from a store. Rather, she aggressively shops for "vintage" clothing which is classic and classy - and not to mention a heck of a lot cheaper. And this Vintage Chanel collection she has actually holds its value. Some day when she is too old to dress up for dinner, she will have one heck of an eBay auction.
I like cars, but I would never pay $70,000 for a car. It just isn't in the cards. That is far too much money for someone at my income level and wealth level to squander on a car. And yet many folks do buy cars like that - leasing them for staggering sums per month. Since I like to tinker with cars, I buy older BMWs, because that can be had relatively cheaply and they are fun (although expensive) to work on. And since the styling doesn't change as often as with US cars (and since they look good longer) they tend to have a timeless appeal.
I don't know how many times people have made snide comments about how I was "rich" because I had a BMW. And yet the car in question was 13 years old, had a book value of $6500 (I know this, as I sold it last year). The person saying I was "rich" was driving a brand new Camry ($25,000) that I would be hard-pressed to afford.
If you are clever, you can sort of fake status, on the cheap.
But I think on another level, status is more about just money and things. Who you are as a person is more important than how much you make, have accumulated, or what crap you have bought. The best line from Stephen Pollan's book Die Broke was this: "You should be more concerned about what you think of yourself than what others think of you."
And in this regard, respecting yourself, liking yourself, and yes, loving yourself is indeed the ultimate status there is. It is sad, but true, I think, that most middle-class people in America today are not happy with who they are and what they are doing. Far too many are chasing status, often at the expense of their own physical and mental health, their marriages, and their family life. And they end up on anti-depressants as a result.
The material is mortal error. Money is a false God. But it is a useful and powerful tool that should be thoroughly understood and carefully used. And it is far too important to squander on Status.