Tip Content Provided By: Financial Finesse
When hip hop artist Jay-Z released his most critically acclaimed album 4:44, it was praised not only for its transparency, but also because of its economic messages. It’s no secret that pop music does not have the best track record of promoting good financial decisions. And with a few exceptions, hip-hop is the worst offender. You can even find a song like “Money Ain’t a Thang” in Jay-Z’s old catalog.
Essentially that is what has driven the buzz about this project — Jay-Z goes counter to the braggadocio of his youth and gives a little sage advice on areas we could all stand to work on. Here’s what I mean.
“Ya’ll on the ‘Gram holding money to your ear. There’s a disconnect, we don’t call that money over here” – The Story of O.J., by Jay-Z
Calling out conspicuous consumption
In “The Story of O.J.,” he raps, “Ya’ll on the ‘Gram holding money to your ear. There’s a disconnect, we don’t call that money over here,” which is referring to the “money phone” phenomenon. If you are not sure what that is, search the term “money phone” and you will find countless images of people holding stacks of cash to their ear. It is a show-off maneuver that is supposed to convey that money is calling the person.
You may not have hundreds of dollars to your ear while posting it to Instagram, but it doesn’t take much to fall into the trap of conspicuous consumption — the desire to have the newest car, the swankiest house and even the newest iPhone — which can actually result in a circumstance that puts you further away from having the wealth you’re looking to represent in the first place.
The problem with conspicuous consumption
Conspicuous consumption says you don’t belong. Many try to increase their consumption level in order to raise their status among others and be a part of the “in crowd,” but it has been my experience that such conspicuous consumption often highlights the insecurity of the person.
In my years of working with truly affluent clients, one thing I gleaned is that it is very difficult to convince someone who is actually wealthy enough to have that status that an outsider belongs there. It is like being a traveler to a foreign country. The natives know tourists when they see one and affluent people know who is affluent and who isn’t, regardless of consumption levels. Gaudy shows of wealth tend to confirm a person’s status as lower; it doesn’t improve it.
Conspicuous consumption could be a symptom to a deeper concern — and it never ends. Outward displays of wealth can result in sabotaging your journey to building your actual wealth. Wealth is a relative concept and when we fall into “Keeping up with Joneses,” it can be a never-ending spiral. When you see someone with that new phone or in that nice car, it is likely that that person could be judging themselves against someone in an even nicer car.
The real way to measure your wealth
Here at Financial Finesse we have come up with a definition of financial wellness that is objective and has very little to do with what you own. Through our work with millions of Americans, we’ve defined that true financial wellness is:
A state of being where an individual has achieved the following:
- Minimal financial stress
- Living below their means with no high interest debt
- An adequate emergency savings fund
- Income and assets are protected from loss
- And an ongoing plan to reach future financial goals
So for example, if you use debt to get those extra things that might make you look wealthier (or more financially well), you could find yourself cutting back on your lifestyle later to pay off the things you thought you would make your life better today. By making good financial choices now, you set yourself up for more of the things you like later, without sacrificing your future.
This is not say you cannot enjoy nice things — financial health does not mean you must quench your sense of style. I have my own penchant for Italian loafers and German cars, but I also recognize I really only need one black pair and one brown pair of loafers. I also purchased my Audi used and it has been paid off for several years now. There’s a balance.
Next time you feel like you need to buy something that would compromise your ability to reach that state of financial wellness, take a self-assessment — ask yourself if the things you want are the things you really want and not just for PDC (public displays of consumption.) Be authentically you, but keep your financial future in mind.
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