I had a professor once who did a lot of research on this. All people attempt to impress their neighbors to some extent. Their finances depend on what they can do and how they will do it. This is oversimplification, but his research basically showed the following.
Poor people impress by what they wear— clothes, bling, etc. That is because they cannot afford to display in any other way.
Middle class people impress by what they drive— A trendy car, or maybe a boat or a bunch of motorized “toys” like four wheelers. They can afford the “bling” but don’t want to look poor. However, they can’t afford to radically change their lifestyle to show off.
Upper Middle Class and Wealthy people impress by either where they live or where they go— Some live in nice show houses in trendy neighborhoods. Some are the “millionaire next door” types that live in a regular house, but take a trip to Europe or the Amazon each year. Having an expensive car won’t impress any of their neighbors but they can’t afford to have a college named after them.
Very wealthy people try to impress by what they do. The wealthiest like to have buildings named after them, like Carnegie Hall or the Geffen School of Medicine. Think about it. What could Bill Gates or Warren Buffet wear or drive that would make anyone more impressed. Help develop internet access for all the libraries in the US (Bill and Melinda Gates Foundation) or buy ABC Television and General Motors (Buffet’s Berkshire Hathaway) and you have something.
There are some theorists that say this effect actually works in the other direction. Poor people stay poor because they spend money on “bling” instead of saving for a decent vehicle. The trendy vehicles the middle class drive are usually too expensive, lose value and are bought with interest payments. This actually stops the middle class from becoming wealthy. The Upper Middle Class and Wealthy people end up spending too much in upkeep and property taxes on their homes. These people would say that the very wealthy became that way because they were not concerned about how other people see their clothes, vehicle and home and concentrate on doing important things.
Something interesting to think about.
