peer pressure

[wealthyjay]

Hi all

First of all, I want to say hello to all as this is my first post in what I hope will be an interesting and fruitful time here Am a relative Newby when it comes to investments and wealth after "waking up" a few years ago after reading Rich Dad Poor Dad, and it just snowballed from there I have a property in Perth which is doing rather well, and am now in the process of consolodating and saving before investing more seriously. I have a lot to learn, but it should be fun,

Anyway, I have a question for you all. How do you guys deal with the pressure from peers to do what I see as consume ie heavy debt, big houses, cars, toys etc? People who see wealth being what you have, not your net worth. My partner and I feel sometimes that we are being left behind despite knowing full well we are in a far better financial situation than anyone we know. We know we can full well afford these things, but choose not to because it is not in our long term best interests. What do you reckon?

 

[keithj]

Who wants to be effluent ?

We know we can full well afford these things, but choose not to because it is not in our long term best interests. What do you reckon?

Read 'The Millionaire Next Door' & 'The Millionaire Mind'- both by Thomas Stanley. They show the difference between 'affluent' and 'wealthy' - (Kath & Kim fans - note the spelling).

An affluent mother at the school gate was telling me that she was so well off that she had no mortgage, I responded 'Oh dear, I have 7' - she looked puzzled.

For me it's a state of mind - an inner knowledge that you don't have to work if you don't want to, that you'll be one of the 1% who retires wealthy. I drive a crap car & dress scruffily - it's interesting seeing peoples attitudes change when they get to know me a bit better - they often wonder how I have the time to volunteer for school canteen duty, pick up & drop off the kids at school, never seem rushed, or in a suit.

KJ

 

[MJK]

Hi Wealthyjay,

I know what you mean. My wife and I look around us and see many friends who have large mortgages on their PPORs / we dont! They have consumer debt / bad debt, we dont!
The only thing I think we need to be careful of is living too much for the future and not for today. You do have to smell the roses, take a holiday, see the world etc... because you really dont know whats around the corner.
We dont want to be financially free and look back and say we wasted the last 10 years of our life to get there do we? Balance is important and hopefully can be achieved without affecting our weath creation achievements too much.
I believe controlling cashflow is an important part of living for today with and taking action for tomorrow.

MJK

 

[wealthyjay]

Read 'The Millionaire Next Door' & 'The Millionaire Mind'- both by Thomas Stanley. They show the difference between 'affluent' and 'wealthy' - (Kath & Kim fans - note the spelling).

For me it's a state of mind - an inner knowledge that you don't have to work if you don't want to, that you'll be one of the 1% who retires wealthy. I drive a crap car & dress scruffily - it's interesting seeing peoples attitudes change when they get to know me a bit better - they often wonder how I have the time to volunteer for school canteen duty, pick up & drop off the kids at school, never seem rushed, or in a suit.

KJ

I have read the Millionaire next Door, and am in the middle of reading the Millionaire Mind. both absolute eye openers when it comes to the definition of wealthy.

I agree with you 100% with the fact that its a state of mind. its hard to maintain though in the face of many of our peers.

 

[Peter_Tersteeg]

Over time my wife and I have learnt not to talk to some people about our investing as they simply don't get it. We tend to 'hang out' with other investors - you not only make new friends, but you also create your own support/discussion group

In a few cases, we also stopped seeing some people, as there was no value in that friendship. This may seem harsh, but their goals and values conficted dramatically with our own and it just wasn't worth the stress.

We still have many non investor friends, but we have other common interests with them.

In a nutshell, associate with those who you aspire to be like and have common interests with.

 

[Ecogirl]

Wealthyjay
Yes it is hard to live amongst peers who appear to have it all ie the car, house, clothes, holidays etc. The funny thing I have found with ppl who have real wealth - they don't really feel the need to keep up with the Jones'. When starting out it is tempting to go and make the purchases that you don't really need to keep the potential feelings of 'not fitting in' at bay.

To keep me on the path which I most desire, I make sure that I have written goals for wealth creation. When I feel tempted to go out and try to 'fit in' I review those goals and see how far along I've come. This helps to keep me on track and gives me satisfaction that my investments will pay for my lifestyle that I want.

Try to keep focused - if it was easy everyone would be doing it. Good luck.
Cheers
Ecogirl

 

[quoll]

wealthyjay

The wife and me try to balance the spend now with the save for later. I find there is always other stuff you want to buy, the list is huge. Every now and then we go and buy something off the list.

But you always think what else can I do with the money?

And often you decide that you would rather do one of the other things.

We have found that as our income has increased our expectations have increased, we now want more expensive items. But saying that you can still want something but settle for less, we buy a carton of beer each week, the $50 stuff is nice but the $25 light beer is cheaper and pretty good. So instead of buying Hahn premium we buy Hahn premium light, still buy some expensive beer but maybe only once a month, once every 2 months. Wanted a new car, went looking, Jags are nice $50K, new Ford Fairmont $50k ended up getting a 98 Fairmont that had done 100k km, the 3 kids have more room in the back now. It's still a nice car just a bit older and cheaper than the others. The money we didn't spend went into the next IP.

We have a list of things we would like and a list of jobs around the house that need money and it feels good when you cross something off the list. Some stuff have been on there for years they just get dropped further down the list.

We keep track of our assets and liabilities it feels good to see the assets increase and the liabilities increase but the gap between them keeps getting wider, therefore our net worth is increasing. THAT IS THE BEST FEELING.

I agree with PT_Bear some friends you can talk to about the investing, some you can't and some you drift away from.

Go for a drive around the housing trust areas and look at the cars in the driveways, how many are brand new? Just thing about all the car loans and the interest and enjoy the car you have. Dream about the car you would like and think about what else you could do with that money!

The consumer spending pressure is always going to be there.

Cheers
quoll

 

[wealthyjay]

Thanks for the replies people.

I guess it is the hardest part to not get sucked into the consumption thing. As a couple my partner and I have (and will make) financial goals which include both investments and stuff we just plain want etc to try and balance things up. We have a plan and know where we are going.

I agree with PT_Bear with the fact that we would be best served by not hanging around those of that mindset and associate with those on the same plane. As snobby it sounds, I do agree that it is one of the better ways to remain inspired with your path, and you get the support you often need.

I get comfort and strength from knowing that what we are doing will hold us up for the long term and we will ultimately acheive more than those who choose to have it now. I think we have to remain strong to those ideals and not let the masses with their opinions distract us from our goals.

 

[amokk20us]

In Response to this thread,

IMO the younger generation aged between 25-18 who have come to realise what needs to be done to achieve financial freedom has the most peer pressure to overcome.

In my own case, I have just turned 23 and for the past 3 years have come to realise the power of compound interest and other wealth creating techniques. This year I have managed to trade over 100K worth of shares, and saved up enough deposit for an IP.

What I find hard to overcome is the pressure from the media to spend and also the ever increasing trend in young ladies who are only attracted to affluent boys with their toys

I am healthy/good looking/intelligent/funny but apperntly that doesnt do it for the opposite sex anymore, what does? some 2-bit loser in a Subaru WRX or one of those really rare imported Skyline's (HAHAHA) all paid for on credit.

Now I know some of you oldies may think 'A nice young man like Amokk should have more sense then to chase young Naive girls.'

But Come On, I'm 23! Testostrone flows through my veins like jet-fuel through a rail-car.

Sometimes I have my bad days and I get into an extremely bitter mood, (this is specially true when I'm out in town with friends who have money to burn).
When this happens I just ask myself a simple question
- 'is this feeling of bitterness appropriate for this momment and time?'
In most cases the answer is 'No' and this seems to calm me down for the momment. (This technique is from one of Anthony Robbins workshop)

But to cope with peer/media pressure in general I try and surround myself with good quality friends, avoid as much television as possible(I hate normal TV) and of corse think of the wealth ahead which is instored for me.

The image I look forward to the most is of myself and my girl relaxing on the water bungalos in Bora Bora, surrounded by clear blue water and golden beaches and not having to put up with Boss's Managers and fortnightly paid!

The scary part for myself is the 'what ifs and what do's'

- what if I get run over by a car today and my life has ended?
- what if the love of my live is living in Porta Rico and I have not the time to visit there before I die?
- what if I get I loose all my possesions due to an inforseen disaster
- What do I have to show for the time given to me as a youth?
(there are countless others which I will not bother to list)

In my Opinion it is a lot harder for us generation Y's to achieve financial freedom because there is soooo much out there to enjoy with money! More fancy things to buy, more trips to take, faster cars to drive. Such choices would have just been a fantasy to young people back in the old days.

Anyway, this is just from a young mans perspective, which certaining will change and alter with time


--------------------------------------------
Never loose sight of the big picture.

 

[NigelW]

In Response to this thread,

IMO the younger generation aged between 25-18 who have come to realise what needs to be done to achieve financial freedom has the most peer pressure to overcome.

In my own case, I have just turned 23 and for the past 3 years have come to realise the power of compound interest and other wealth creating techniques. This year I have managed to trade over 100K worth of shares, and saved up enough deposit for an IP.

What I find hard to overcome is the pressure from the media to spend and also the ever increasing trend in young ladies who are only attracted to affluent boys with their toys

I am healthy/good looking/intelligent/funny but apperntly that doesnt do it for the opposite sex anymore, what does? some 2-bit loser in a Subaru WRX or one of those really rare imported Skyline's (HAHAHA) all paid for on credit.

Now I know some of you oldies may think 'A nice young man like Amokk should have more sense then to chase young Naive girls.'

But Come On, I'm 23! Testostrone flows through my veins like jet-fuel through a rail-car.

Sometimes I have my bad days and I get into an extremely bitter mood, (this is specially true when I'm out in town with friends who have money to burn).
When this happens I just ask myself a simple question
- 'is this feeling of bitterness appropriate for this momment and time?'
In most cases the answer is 'No' and this seems to calm me down for the momment. (This technique is from one of Anthony Robbins workshop)

But to cope with peer/media pressure in general I try and surround myself with good quality friends, avoid as much television as possible(I hate normal TV) and of corse think of the wealth ahead which is instored for me.

The image I look forward to the most is of myself and my girl relaxing on the water bungalos in Bora Bora, surrounded by clear blue water and golden beaches and not having to put up with Boss's Managers and fortnightly paid!

The scary part for myself is the 'what ifs and what do's'

- what if I get run over by a car today and my life has ended?
- what if the love of my live is living in Porta Rico and I have not the time to visit there before I die?
- what if I get I loose all my possesions due to an inforseen disaster
- What do I have to show for the time given to me as a youth?
(there are countless others which I will not bother to list)

In my Opinion it is a lot harder for us generation Y's to achieve financial freedom because there is soooo much out there to enjoy with money! More fancy things to buy, more trips to take, faster cars to drive. Such choices would have just been a fantasy to young people back in the old days.

Anyway, this is just from a young mans perspective, which certaining will change and alter with time


--------------------------------------------
Never loose sight of the big picture.

To quote your quote "never lose sight of the big picture" BUT that shouldn't preclude some fun along the way.

If I were you I'd make sure the wealth creation plan is running and being funded first but not so much that you have to live on vegemite sandwiches for the next 2 years...

I think it's important to have some small milestone type rewards to look forward to, and plan for, which you ALLOW yourself to have. Those "splurges" can be planned and budgetted for too...

Remember the journey is supposed to be part of the fun. You're doing comparatively well for your age for which you should be congratulated and you've got the power of time on your side...

ps. surely the line "would you like to see my investment portfolio?" has some pulling power with the ladies

 

[Lissy]

amokk20us
The girls who are only interested in "things" aren't worth wasting your time on anyway, so forget them.
The sort of girl who will help you on your journey of wealth creation will be out there somewhere, and one day you'll find her. Just remember - she may not be the blonde goddess with big... well, you know what I mean. Just make sure you're not being blinded by "things" rather than what's inside too.

The thing I find most amazing, is that despite so many of our friends and family knowing that I do "stuff" with property, who know that hubby has taken a package and studied full time this year, and who now know that he won't be getting a job now his study is done - still don't ask me what I'm doing and how they can get in on it!!!

 

[Aceyducey]

Anyway, I have a question for you all. How do you guys deal with the pressure from peers to do what I see as consume ie heavy debt, big houses, cars, toys etc? People who see wealth being what you have, not your net worth. My partner and I feel sometimes that we are being left behind despite knowing full well we are in a far better financial situation than anyone we know. We know we can full well afford these things, but choose not to because it is not in our long term best interests. What do you reckon?

Hi Wealthy jay & welcome to the forum!

Personally my feeling is 'what pressure?'

How can people pressure you into buying new cars & toys? Take you down the showroom, put a pen in your hand & hold you down as they move your arm to sign the contract?

Pressure is perceived, not real - unless your friends believe in the dripping tap & bright lights approach.

If people buy nice things & want to show off to you, tell them 'nice X' and move on. They have what they want (verification of their decision), you don't need to support their decision by matching them!

Cheers,

Aceyducey

 

[qaz]

Perhaps unsuprisingly I tend to agree with Acey on this one. I save 60% of my net income in a lowish income fortnight. It's probably closer to 75% when I do my 40 hours or so. I live at home yes so my cost of living is cheap, but I don't understand how people can't control their spending habits. I have trouble making myself spend money!

 

[quoll]

Personally my feeling is 'what pressure?'

Advertising!!!

If you don't watch commercial TV, if you don't have kids, you might not see as much pressure.

How many co-workers / friends / etc have the flashy phone, pda, laptop, car, holdiays.

I'm surrounded by IT geeks who blow their monthly pay, they rent, they have flash cars, nice toys. I think that is the pressure wealthlyjay is talking about.

All the things you miss out on when you don't have to do the 9-5 office job.

Ignore the pack and do your own thing.
I'm an individual ..... was a good song to remember

Cheers
quoll

 

[Jimmyjamjars]

Perhaps unsuprisingly I tend to agree with Acey on this one.

HAHAHAHA!!!!!!!!!!!!
Ah Qaz, you kill me

 

[JohnK]

Hi WealthyJay,

It is difficult if not impossible to become wealthy when people around you including yourself, are tearing you down with consumer debts. Im with PT bear.

People I work with day to day, or around us when me and my partner are out, just dont get why we invest so heavily property when the topic gets mentioned. There faces cringe with terror and tell us a thousand and one reasons why we shouldnt get into so much debt blah blah. So negative and ignorant. Thats when we choose not to listen and try hard not to let it in, and you dont want it to because it brings you down to there level. It starts ringing a bell at the back of your mind. You start to believe, that maybe what they are saying is right and so forth. You must surround yourself with positive people.

How could anybody possibly hope to have a wealth mentality when people like that surround you? In order for us to become wealthy, we have to cut ourselves off from all of that. You have to put those people aside and you have to decide for yourself that you’re going to create your own path.
And I don’t mean say to your friends – get lost! But you have to choose not to listen.

As far as im concerned, my toys/liabitlies can wait till the very last and I will be having the last laugh while I see people who once looked at me weird, trading & pedaling the everyday cycle. There the ones who will always having to work harder, always looking where the next buck comes from, always trying harder at work until they get the next promotion or the next pay rise to buy those extra pair of shoes.

Its easy to get sucked into consumer debt! Sure go out and spend, live a little, enjoy....im sure we all do.. but dont put yourself into bad debt. Australia has the highest level of consumer debt in the worlds per capita. That’s scary!!


Cheers

 

[see_change]

We live in Sydneys north shore and have three kids at private schools. As a result we socialise with people who are genuinely wealthy and those who make a lot of money and spend most of it.

We did a subdivision , sold one block and built our dream home on the other. As things would happen , this ended up costing more than we anticipated ( Watch the little things... they add up and up and instead of having a low to minimal mortage we were back to were we were with the pre development mortgage , though the finished product was worth a lot more.

We ended up selling our nice new house and buying one for almost half the price which is more than livable, and happens to be on 3/4 acre of what has proven to be subdividable land. Several of my wifes friend made comments that " they have to be dead to leave that house...". A couple of the husbands were impressed that I'd been able to get my wife to agree to move.

Her initial reluctance has now changed , and we exchange comments about the silly things that some people are doing eg Husband is stressed out / working to hard, so wife goes and buy a horse so she can relax....

Many of the conservations seem to resolve around the husband working long hours , getting ahead in their profession , the latest deal , being constantly stressed out or constantly away on trips. The women are organising their latest "lunch" or going shopping.

After an initial hesitation , We're both finding we get asked about how our investing is going, it's just become part of the regular conversation. A significant minority ,through their work get involved in start ups or private equity deals , and I find as I talk about my investment properties and shares , they start talking about the deals that they are putting together and there has been a starting of a trickle of " we're looking for some more people to put money in xyz ....are you interested ".

As a result of this I do talk about my investing and I am finding there are always some people who have an interest in investing and if you share some info , what comes around comes around.

We have no problems with the fact that most of the people around us are spending alot more money that us ( though we're the one's going for two weeks skiing in Canada this year . Maybe a few less lunches , and a normal car instead of the big fourwheel drive and we would have had company.

See Change

 

[skater]

At the end of the day, it is your choice what you spend your money on. For instance, when we bought our PPOR (only a few years ago now), we decided that, although we could afford a nice new place, not far from Hubby's work, that our lifestyle was going to suffer in the long run. We need a hefty amount of $$ each week for the sport of our choice, as well as extra available for our investments. Instead, we bought a rundown ex-housing department house (on a sub-divideable block with second house already built) for substantially less than the newer house. End result is that 1/2 the mortgage is tax-deductable & we earn an income from the second house.

Hubby's co-workers were aghast. Why would you want to live there? And they are right, its not the most desireable place to live, but you know, we keep to ourselves & have no problems with the neighbours. You can be happy, no matter where you are, its all a state of mind.

At the end of the day, we are very happy with our choice of where to live, as it will give us options in a few years that we would never have had . Hopefully hubby can retire within the next ten years.

The surprising thing is that his co-workers are now asking him for investment advice, when once they thought he was crazy.

 

[wealthyjay]

Advertising!!!

If you don't watch commercial TV, if you don't have kids, you might not see as much pressure.

How many co-workers / friends / etc have the flashy phone, pda, laptop, car, holdiays.

I'm surrounded by IT geeks who blow their monthly pay, they rent, they have flash cars, nice toys. I think that is the pressure wealthlyjay is talking about.

All the things you miss out on when you don't have to do the 9-5 office job.

Ignore the pack and do your own thing.
I'm an individual ..... was a good song to remember

Cheers
quoll

Thats it! and the well meaning friends/family telling me what I could be doing with all my equity and income Its even worse since I now work in the Petroleum industry with a good income, and the assumption now is that I can afford anything. I get called tight when I say I am saving to invest instead of consume till I drop .

like skater we live in a very ordinary house in an area which has seen very good growth over the years which bought very cheap, hence minimal mortgage/outlay. this is great since we have a good amount of income for investments etc This gives us our security and our pride. we know where we are going, and we go by the idea that we are doing well if we don't have to work.

Ammokkus, I hear ya, if there is one thing I have learnt is that you don't need someone to like you for what you have not who you are. unfortunately the young are wired for externals until the wakeup call of maturity. Patience grasshopper and you shall find what you seek

Thanks for all the replies, it has been helpful. As I am reading in the Millionaire Mind one of the big factors in milllionaires is strength of mind, so I guess this is part of the path we travel along. this is what makes those that are wealthy relatively unique I suppose. At least I am not alone in this.

 

[XBenX]

In Response to this thread,

IMO the younger generation aged between 25-18 who have come to realise what needs to be done to achieve financial freedom has the most peer pressure to overcome.

As part of that age group and with my social group mainly made up of that age group I too would agree - most realise what is needed - very few act.

Im probably not the best example - I fully realise the impact of my conspicuous consumption - I just choose to ignore it - its fun spending money - its also fun making it...

Ive changed my consumption from "delay gratification" to "want it, have it" - in the end Ill probably settle somewhere in between.

To me life isnt about accumulation - its about "fun"