Seeking to Impress Financially is a Fool's Game
80 Million Dollar Man and a 1997 Chevy Tahoe
Kawhi Leonard is a basketball player for the Los Angeles Clippers and is currently signed to a 4-year / $176,265,152 contract. His net worth is projected to be $80 million and he has a shoe deal with New Balance that projects to be worth $5.5 million per year. He is considered the 33rd best NBA player of all time, although I may disagree. He is a man of high status, reaching the pinnacle of athletics, and a man who some may say is not short of money.
The $80 million net worth might be low and oftentimes, the net worth valuations miss all the revenue streams that celebrities may have. The rapper NAV was on 360 with Speedy Morman and was asked about his net worth valuation seen on the internet and he said, “It said $400,000 and my car was $400,000 at the time.” Fair to say, a few things might have been missed. However, despite Kawhi being, at the very least, an $80 million man, he still drives a 1997 Chevy Tahoe. A 1997 Chevy Tahoe that he got in high school. He was asked why he still has the Chevy Tahoe today despite his wealth and says, “It runs and it’s paid off.” He will probably drive the car until the brakes fall off, literally. A wise man.
Kawhi Leonard is a man who doesn’t need much and a man who seeks to impress no one. Practically, no digital footprint with no presence on Instagram and a total of four tweets on his Twitter, the last being July 7th of 2015. He follows zero people on Twitter choosing to live life in a manner where he would rather focus on himself rather than worry about what others are doing. He is never in the news and prefers to fly under the radar. Kawhi Leonard quite literally doesn’t care what you think about him and feels the need to impress no one.
In a world where your digital presence has become more important than your physical presence, Kawhi Leonard goes on his own path, unconcerned about impressing anyone. He still drives a 1997 Chevy Tahoe, knowing cars can be a terrible investment, and lives a life opposite of flash and glamour. He is not caught up in the game of having the biggest toys, flashiest cars, or largest house. He would rather spend money on things that matter to him and doesn’t feel the need to have a 10,000 square foot house or collection of 20 cars, never driving most of them. Kawhi has understood one of the most important personal finance assets, not needing to impress anyone.
Investments in Cars
My father always told me, “Your car loses value once you drive it off the lot.” Cars are depreciating assets, slowly losing value over time. A new car takes the cake as once you drive it off the lot, it not only loses value from driving it off the lot but it has now gone from a new car to a used car. It has lost the new car shine, the new car smell. New cars take an already bad investment and make it worse. To give context, NerdWallet places a $10,000 premium to buy a new car rather than buying a car that is three years old.
Everyone knows that cars can be, not always, one of the worst investments you can make. However, we need cars to exist. Cars are a necessity in the life we live. We have to own a car. Despite them being one of the worst investments, we can take a horrible investment and turn it into a decent investment just by buying a car that is three years old rather than a new car. So why do people buy new cars knowing how bad of an investment they can be?
Put simply, to impress others. Cars are one of the most visible signs of wealth or so we think. He drives a Lamborghini, he must be worth seven figures. They drive a minivan, they must be a middle class family. He drives a 1997 Chevy Tahoe, he must be a simple man with a simple life. Just because they have a nice car doesn’t mean they are rich and just because they have an old, worn down car doesn’t mean they are poor. Rather, it could simply be that they don’t need all the glitz and the glamour. They don’t feel the need to impress anyone.
It is no coincidence that the nicest cars are often the most expensive to maintain. They have luxury features sourced from premium materials that can only be worked on by a specialty technician. Do we really need cooled seats for when we drive? Do we really need the car to park itself for us? People seek out features that are a luxury to have but in reality, the utility lacks and it allows for more room for error, more room for issues.
Just like cars, houses fall into the same category. Luxury homes are littered with features such as bowling alleys, massive pools, and tennis courts all which largely go untouched. The need for these items is they are a sign of luxury and serve to impress others, signifying an esteemed status. Often, people envy those with all the luxury features. People wish to be those individuals with the Lamborghini or the 10 bedroom house. However, wishing to be those individuals so you can impress people with your assets is a slippery slope.
Man in the Car Paradox
Morgan Housel in the Psychology of Money calls it the “Man in the Car Paradox.” Put simply, “No one is impressed with your possessions as much as you are.” We think everyone is enamored by our possessions, wishing to have what we have. However, “People tend to want wealth to signal to others that they should be liked and admired. But in reality, those people often bypass admiring you, not because they don’t think your wealth is admirable, but because they use your wealth as a benchmark for their own desire to be liked and admired.”
It is never about the person who has the luxury item, it is always about how I would look if I had that item. How I would act if I had that item. People use others' wealth as a basis of where they are in life, a gauge of how wealthy they are. It provides a guideline to how far they have come and how far they may need to go.
We get caught up in trying to impress others with our personal assets but in reality, everyone is too concerned about how they might look with those items to even have an ounce of concern if they are impressed by your flashy items. We are then just caught in a cycle of trying to impress people but ultimately, people are too concerned about themselves to even notice.
Like anything, the need to impress someone with your personal asset has levels. It is not just something defined to the ultra-rich, it applies to everyone. I need the newest golf clubs or the latest iPhone. The newest golf clubs won’t take any strokes off of your game and the pair you recently bought two years ago will certainly suffice for years to come. Just like the latest phone. Change is hard to see across days or months but when you look back across many years that is when it becomes noticeable. People upgrade to the new iPhone when the changes across one generation of iPhones are largely mocked because they lack so much from year to year. The latest iPhone, the iPhone 14, is said to only be worth an upgrade if you have an iPhone X, a phone that was released in 2017. Why do we want the latest iPhone when the change is minimal?
Parting Words
We live in a world where we seek out others' approval. We want others to see our assets and be impressed. It is a never-ending game that is very hard to win. A game that might never be won. A race that might never finish. It is important to step back and realize, everyone puts themselves at the center of their universe. Life is a game that is very hard to win but it can become a whole lot easier if we own our own desires, seek to impress few, and learn that the most valuable personal finance asset is not needing to impress anyone.
Thank you for this post. The last parts stack with me. We are all the main character of our own movie. We only watch other people's movies to compare them with ours.