| Real Life Strategies for Building Wealth

keeping up with the Joneses

Have you been keeping up with the Joneses while desperately trying not to?

Have you been looking at the neighbour’s car and wishing it was in your drive?

Have you been looking at the great suit your colleague is wearing and wishing it was on your back?

After that feeling really down for not being able to stop lusting after what others have.

I know how hard it is to stop keeping up with the Joneses. I’ve tried it myself and failed. It is difficult for me even though I’ll rank very low on a scale of materialistic obsessions.

Now, most personal finance bloggers will admonish you for keeping up with the Joneses. They will tell you that this is the reason you are in debt, this is the reason you are not wealthy.

This is not true.

I’m not saying that personal finance bloggers are being intentionally misleading you. What I’m saying is that most personal finance authorities don’t know any better themselves.

Fighting keeping up with the Joneses is futile and it is not only because you – and I – are not disciplined enough.

There is sound science behind your failure to stop keeping up with the Joneses. Behavioural economics will tell us that comparing ourselves to the people around us and trying to blend in is as unavoidable as taxes. Don’t believe me? Go talk to Dan Ariely then.

In his book (The Upside of Irrationality) Dan Ariely discusses a key survival mechanism we all posses: the mechanism of adaptation. This survival mechanism consists of two different parts:

  • First is our ability to assess the fit between ourselves and our environment; and
  • Second, comes our capacity to adapt to different environments.

Without the mechanism of adaptation, humanity would have become extinct very long time ago. So, it is kind of important.

What does the mechanism of adaptation have to do with the Joneses?

Well, there are two immediate things we’ll have to recognise:

  • Since we live in societies, groups and organisations there are always people around us. In other words, the Joneses would be always there (and short of living as a hermit there is no way to avoid them).
  • Comparing ourselves to the people around us – the Joneses – and trying to ‘fit in’ is a manifestation of the millennia old survival mechanism of adaptation.

This is why trying to stop keeping up with the Joneses is futile.

This doesn’t mean that you have to go out and splash on a designer suit instead of investing in your future.

Adaptation is a survival tool and as most tools can be used in variety of ways.

Ignorance would use it to go broke. Enlightened people would use it to get ahead.

This is how to be enlightened.

Choose your Joneses carefully

If you cannot avoid emulating people, you can make sure that you emulate people who represent what you want to achieve.

There is not secret here: you’ll have to decide your aspirations and make sure that you surround yourself with people who have already achieved what you aspire to achieve.

(You have probably already read something about being the sum of the five people with whom you spend most time. This is how it works; it is all about adaptation.)

If you surround yourselves with people who shop for fun and over-extend themselves to keep up appearances, you are either already like that or will soon become.

So, just saying: choose your Joneses very carefully because you’ll end up keeping up with them.

Decide on your adaptation mechanism

Adaptation – or keeping up with the Joneses – cannot be avoided (and frankly, I would wish to avoid it anyway). It can be controlled though.

To control adaptation we have to be aware that there are three different mechanisms to adapt:

  • Straight match. This is when we match the attributes of our environment. For instance, if my neighbours drive Porsche I end up getting one as well (irrespective of any other considerations).
  • Displacement. This is when we adapt by deciding that the attribute of the environment we cannot match is un-important. If we get back to the example of the Porsche, I can easily convince myself that this is not important for me.
  • Replacement. This is when we adapt by convincing ourselves that we value other attributes more than the ones we cannot match. Why would I go and buy a Porsche, for example, when I really love talking to people on the bus. Or, if we cannot compete in the circle of people who are exceptionally handsome we convince ourselves that we value nice personality much more than physical beauty.
  • Resentment. This is when we are aware that we cannot adapt through a ‘straight match’ but still yarn for it. In other words, we can’t have a Porsche but we still really want one; and the world is so unfair because some people can have it.

I’d say that going for ‘displacement’ or ‘replacement’ is the wise choice when it comes to keeping up with the Joneses. ‘Straight match’ is likely to stretch you or lead you astray (away from your core values) and ‘resentment’ can lead to such misery that I won’t wish it on my worst enemy.

What are you comparing?

What are you comparing when you are keeping up with the Joneses? (Okay, let me re-phrase this one: what are you adapting to?)

Most of us fall into the trap to emulate the immediately obvious. My neighbour has a Porsche, I don’t; my colleague has a Prada suit, I don’t.

I’d propose that you keep up not with the immediately obvious but with the conditions for achieving it.

This needs an example, it seems, so here it is:

Instead of adapting at the level of the Porsche, you should work out the conditions that allow your neighbours to have a car like that. What do they do for living? How do they live?

Once you have figured out the conditions that make driving a Porsche possible, emulate these.

Finally…

Science tells us that it is not possible to stop keeping up with the Joneses because it is part of the survival mechanism of adaptation. You can turn keeping up with the Joneses to your advantage by choosing them carefully and adapting to conditions rather than appearances.

Good luck.

Do you find it hard to resist keeping up with the Joneses? What do you do?