Many people think that the rich spend money like water, buying luxury handbags, flashy watches, and designer clothing. However, the reality is quite different – truly wealthy individuals are very cautious when it comes to spending money. It’s not that they can’t afford certain things, but rather they understand what truly accumulates wealth and which items are only valuable on the surface.
At the same time, the middle class often falls into a trap, purchasing things that “feel” luxurious but lack long-term value.
Health magazine VegOut compiled a list of eight “luxury items” that the rich wouldn’t buy, yet many middle-class individuals can’t resist purchasing.
The moment a brand-new luxury car rolls out of the factory, its value plummets by thousands of dollars.
According to the VegOut article, author Jordan Cooper shared a story of someone in the real estate industry who amassed a fortune, owning millions of dollars in assets and multiple properties. However, he drives a five-year-old Toyota Prius. He said, “I’d rather have others think I’m poor than actually be poor.”
Legendary investor and billionaire Warren Buffett drives a second-hand 2014 Cadillac XTS, which replaced his 2006 Cadillac DTS. Buffett once said to Forbes, “In fact, I only drive about 3,500 miles a year, so I rarely buy new cars.”
While the middle class often sees purchasing luxury cars as a symbol of success, for the wealthy, cars are depreciating assets.
As pointed out by Thomas Stanley in “The Millionaire Next Door,” most millionaires do not drive luxury cars. They opt for reliable mid-range vehicles.
Air fryers, smart juicers, $800 Italian espresso machines that sync with your phone – these electronic gadgets are intriguing and easy to impulse buy, but often provide little value.
The VegOut article notes that the wealthy typically have efficient and minimalistic kitchen setups. If they cook themselves, it’s with purpose. If they don’t cook, they hire someone who can.
Middle-class kitchens are often cluttered with the latest gadgets which, after a few uses, usually end up collecting dust. The wealthy don’t mistake novelty for necessity.
The article also mentions that for the rich, upgrading is not about satisfying vanity but practicality. For a long international flight followed by a meeting the next day? Business class is justified. But for a two-hour flight from Los Angeles to San Francisco? Most would prefer to save that money.
On the other hand, middle-class travelers often upgrade their lifestyle to feel “successful,” but it may lead to more debt.
The VegOut article states that unless high-end jewelry holds emotional value or is a rare collectible, most wealthy individuals are not impressed by it and may actually feel insecure.
Investor Naval Ravikant said, “The rich don’t wear their wealth on their wrists.”
Middle-class consumers are often drawn to the notion that Rolex watches or diamond necklaces symbolize status. However, the wealthy often view such items as unnecessary unless they anticipate selling them for profit later on.
The wealthy prioritize craftsmanship and fit over big brands.
Consumer psychologist Kit Yarrow stated, “True wealthy individuals often dress more understatedly because their confidence stems not from being perceived as rich but from their inherent wealth.”
In contrast, the middle class often focus on status symbols. They want the brand to be visible.
Every year, new iPhone releases spark a desire to buy. But for the rich, they don’t necessarily upgrade each year unless the new model truly enhances their workflow.
Reportedly, Buffett used a $20 flip phone until he finally switched to an iPhone 11 in 2020. The VegOut article commented that the message conveyed is functionality over appearance.
The article mentions that middle-class consumers often upgrade their phones to maintain their image, partly as a social signal and partly out of fear of missing out. The wealthy avoid hype. They only purchase when it truly matters, not just because of a new ad.
The rich don’t chase TikTok-style living rooms or seasonal decor updates. They invest in timeless designs and then maintain them for a while.
In contrast, the middle class often redecorate entire rooms based on what’s “trendy.”
From $15 green juices to weekly IV drips, the health industry thrives on aesthetic luxury.
But the reality is that many wealthy individuals maintain a simple and healthy lifestyle.
So, what should you invest in? Look at what Buffett has to say.
Buffett has amassed incredible wealth and believes that one of the most important investments is in oneself.
According to LinkedIn.com, at the famous annual Berkshire Hathaway shareholder meeting and in interviews, Buffett often reiterates his motto: to stand out, you must elevate yourself, making it impossible for others to ignore you. This means continually learning and growing, exceeding oneself, and becoming a standout in the industry. For employees, Buffett advises striving to be the best and becoming an indispensable team member. Understand your role, industry, and everything about the company to become a valuable expert.