The Arrogance Of Wealth

Pretend for a moment you’ve won the lottery.  What would you do with the money?  

Most of us tell ourselves we wouldn’t waste it…like all those other lottery winners.  We would invest that money and put it to work.  Right?

Guess what —  If you’re reading this, you’ve already won the lottery.

Odds are good that you were born in a wealthy country.   The odds are also good that you have food, and shelter.  You probably even have access to great education and health care.

If your income is greater than $10,000, you already have an income greater than half of the world’s 7 billion people.  You’ve already won the wealth jackpot.  If you make over $50,000 annually, then you are the 1%

Don’t complain you don’t have enough — Be thankful for what you have!  You already have more than most.  You got the golden ticket in life.  What you do with that wealth is entirely up to you.  

Do you really think you won’t waste it?

Wasting Wealth

Could you use your amazing wealthy status to buy financial independence?  Yes, you could!  Unfortunately, financial independence is very rare.  

The reality is, excess wealth leads to arrogant wasteful behavior.  I see it all the time.  Waste is everywhere.

As I write this on the 4th of July (U.S. Independence Day), all my neighbors are setting off fireworks.  I can’t help but think what a waste it is.  Fireworks — lighting money on fire for a quick flash of light, and a little bang.  

What does a pack of fireworks cost these days?  Maybe $5? (I haven’t purchased any in decades)  Most people would probably say it’s not expensive, and think it’s good to celebrate a little.  

Try thinking about it this way though — $5 is roughly what half the world’s population makes per day…and we just light it on fire.  How dumb is that?  

Dumb enough to head back to work on Tuesday.

Burn Baby Burn!

So much of our wealth is wasted.  Wasted on luxury, convenience, and excess.  Do people forget that millionaires are made five dollars at a time?

Maybe you’ve seen this kind of waste too.  How about in your next door neighbors?  You know the ones I’m talking about…

The people with new luxury SUV’s parked in the driveway of that giant McMansion home.  The ones that have high incomes and act like it.  They spend every dollar they can on the appearance of wealth — New clothes every year, new cars, cable tv, giant flat screen TV’s, expensive cell phones, dinners out, expensive wine, and useless hobbies.  The list of excess and waste goes on and on…and yet they’re still working class wage-slaves.

“It’s Not Luck”

One problem with wealth is that it breeds arrogance  — Wealthy people frequently believe they are solely responsible for their personal success.  Sure, hard work and education are definitely contributing factors….but I believe it’s more likely they were just lucky.  

Lucky to pick the right field.  Lucky to have been born in the right place, to the right parents, and have the right skin color.  

Most successful people don’t believe their success is luck.  Go ahead, and ask them…they’ll never say it was luck.  They’ll attribute success to long hours at the office and a superior skill-set.

If that same person was born into a third-world country, could they replicate that same level of success?  It is highly unlikely!

Whether we realize it or not, most of us 1st-worlders have had incredible luck in life.  We got to start-out way ahead of everyone else.  Our success was practically inevitable.  

Remember that next time you want to go blow your annual bonus.


Wealthy people think they’re smarter than everyone else too!

Surprisingly, wealth is not directly correlated with intelligence.  Many of the world’s smartest scientists are not wealthy people.  Success in one field does not necessarily mean success in personal finance.

Most readers of this blog come from countries that are supposed to be merit based.  In merit based societies, hard work and intelligence are supposed to be rewarded.  People with greater intelligence should see greater rewards, right?

Sometimes it works that way, but it’s just as frequently false…the wrong people get rewarded all the time.  Plenty of stupid people manage to worm their way into high-paying jobs.  

Wealthy people can be stupid just like the rest of us.


Believe it or not, maintaining a high income for a long time is a hard thing to do.  The wealthiest income earners in the U.S. rarely maintain a top level income for very long.  Top incomes are fleeting…yet individuals behave as if their incomes and lifestyles are sustainable over the long term.  They usually are not.  This is what I call the “Fallacy of Permanence”.

Wish I'd Saved Some

Jobs are no longer permanent.  Jobs come and go.  Incomes swing up and down with the economic cycle.  I’ve had several opportunities to experience this myself over the years.

Given a successful high-paying job, most reasonable people believe that success and income will continue until age 65.  Unfortunately, it isn’t true — Income tends to peak in middle-age (45-54) and begins to decline thereafter.  Why does income begin to drop?  Possibly because workers begin to retire at that age.  It could also be age discrimination, or another reason.

Either way, you’re going to have to live on less (almost 50% less!) at some point in your life.  Start getting used to that level of spending now.

If you learn to live (happily) on less, there’s a smaller chance you’ll experience disappointment in your retirement years!  You’ll also end up saving more!

The Tako Experience

I live in the Pacific Northwest, not far from the city of Seattle.   It’s a pretty wealthy place.  There’s lots of technology companies with offices in the area — like Microsoft, Adobe, Amazon, Facebook, and Google.  

These tech companies employ a lot of highly paid workers.  That in turn, pushes up all salaries in the area.

A highly educated workforce with high salaries — a recipe for arrogance?

Sound like a recipe for real wealth creation?  In many cases, people are worse-off here.  I’ve found that all this success leads to arrogance, waste, and short term thinking.  

For example: My neighbors drive a Porsche Cayenne, and live in a four bedroom home (only two people).  They work completely normal jobs outside the tech-sector.  If they lived in a humble city, they might only drive a Toyota and have a two bedroom condo.  But humble isn’t how things work here.

The workers in this area waste their golden ticket on ostentatious displays of wealth.  The appearance of wealth, is a waste of wealth.  Waste is everywhere.  Expensive cars, and fancy houses seem to be favorites.

So, I’m writing this post as a reminder.  A reminder to myself, my family, and my readers to stay humble.  Don’t get arrogant.  Remember the little people.  Keep your head out of the clouds.  Don’t show off.  You’ve been lucky so far, but success is often fleeting.  

That gravy train of wealth doesn’t last forever.  Are you prepared for when it ends?


[Image Credit: Flickr1, Flickr2, Flickr3, Flickr4]

21 thoughts on “The Arrogance Of Wealth

  • July 6, 2016 at 12:10 PM

    I totally agree with you that many people pour their earned money in the trash. It is all about how people feel. Some people feel exceptionally well when they can show off their tangible belongings to others – car, home, gadgets, etc. Especially, those people want to show off something their surrounded people don’t have. Others feel good when they have something intangible like knowledge, experience, culture, etc. From my own experience, I chased tangible items when I started making significant money because I was immature. Now I chase intangible things because I don’t need to show off anything to anyone and am no longer immature.

  • July 6, 2016 at 12:10 PM

    I have been saying the “luck” thing for a long time. But the people, like some people I know on Wall Street, don’t like acknowledging that, while yes, they are probably very skilled in their field, luck played a significant role (some may actually say overwhelming role) in their success…

    One thing I really want to instill in my children is to help them recognize the sheer luckiness of their position. To have (if my may be ever not so humble) great parents, food, toys, family and most everything a kid could want. I watch on TV and the Internet (and have seen with my eyes in Afghanistan) the true level of poverty that exists in the world. Where children don’t even have enough to eat every day (the story that has destroyed me this year was of a 2yo on the streets in Nigeria…. I am not prone to being a emotional but if that picture doesn’t emotionally hit you I don’t know what will).

    As my parent’s would say, “There but for the Grace of God go I.”

  • July 6, 2016 at 1:04 PM

    Wow, I totally agree on the luck factor! That point alone has been an argument between me and a friend for several years now. He thinks he’s a self-made man and owes nothing to nobody (you know, the kind of people who refuse to pay taxes, lie on their tax return, and try to justify it like that?). I keep telling him he’s “lucky” to have been born in the right country, with the right parents, combined factors that gave him a roof and the right education. Nobody’s “self made”.

    I’ll agree to disagree on fireworks though. Not that I buy them myself, but fireworks in Summer are a huge reason why I love Japan so much, even if it’s a gigantic waste of our collective wealth.

    • July 6, 2016 at 9:03 PM

      Japan does know how to put on a good show. The Christmas lighting displays are really nice too (and just as wasteful).

      Unfortunately, Japan has one of the lowest savings rates among developed countries…

      A mere 2.4%. Maybe they should waste a little less and save a little more.

      • July 13, 2016 at 1:15 PM

        It’s such a shock for a country that saved almost 1/4 of their income (23.1%) back in 1975 and now just recently passed to a negative 1.3% savings rate! Japan consumers started using debt (like it’s heavily used in the US) and are now living above their means to live the “Dream”.


  • July 6, 2016 at 5:05 PM

    I can’t agree more with you on the luck side. Many times, possibly around a home brewed coffee or something as simple as that, my wife and I would tell each other how lucky we are to have it so easy. Yes we have studied for many years, we work long hours at a (sometimes) stressful job, but who doesn’t?

    Since I started my journey to FI, I do tend to practice ‘stealth wealth’ and I almost caught myself feeling bad for people that I see driving around in Bentleys, Porsches and other Maseratis.

    Thanks for reminding us that we’re so blessed !

  • July 6, 2016 at 5:09 PM

    I save most of what I earn. We spend mindfully. Purposefully.

    By far the most expensive thing I have “purchased” is my financial independence. It cost me roughly your net worth, but worth every penny.


    • July 6, 2016 at 8:47 PM

      I think you’ve set the gold standard for physicians PoF! Doctors (in general) have a reputation more along the lines of spender rather than saver!

  • July 6, 2016 at 9:51 PM

    Thanks for the article Mr.Tako.
    I’m with you on not being wasteful and living a life of Financial Independence. At the end of the day though, it’s their lives and they should do what they want to do with their lives . To each their own and we need consumers and spenders to keep the world going or who would keep purchasing the products from the companies of stocks we own? 🙂
    Cheers Tako.

    • July 6, 2016 at 10:36 PM

      To be clear, I’m not against spending! I spend lots! I’m just against excess and waste.

  • July 7, 2016 at 12:34 AM

    Nice article, Mr. Tako! Helps to put things into perspective. There’s always someone out there who has it worse (and better) than you do. Practicing gratitude often is the best way to feel wealthy in my opinion. Life really is whatever you think it is. Cheers!

  • July 7, 2016 at 1:28 PM

    These are great points. Buying only the necessities in life can put someone on a path to success when we’ve won the lottery in living in one of the best countries to live in.

    If I may take an opposition view / know your view a little further, why do you think rich people saying they earned all of their wealth is arrogant? It may be luck that they were born into a wealthy country but if they were born in a third world country, couldn’t they move to put themselves in a position to succeed? I am all for the environment playing a huge part in life choices and wealth status but I believe that it’s someone’s job to get to that place. It’s hard and I’m not saying I figured it all out, but I just wanted to ask for your thoughts further, if I can 🙂

    • July 9, 2016 at 10:05 PM

      We stand on the shoulders of giants, and live in a country with unprecedented economic mobility. The unfortunate reality is, this is unusual. In much of the world, if your parents are farmers, then YOU are going to be a farmer. There is money for little, other than survival.

  • July 8, 2016 at 8:26 PM

    Good post. The challenge, however, for all us ER types is that our comparison set is NOT the 95%+ who don’t have what ER folks are blessed with. The comparison set is the vast ‘long tail’ who are part of the top 5% or top 1%. Even for those in the top 1%, there is a vast difference in wealth between the top 0.5-1% and top 0.1-0.5%. I know a person in the top 0.1% wealth level who is wealthy beyond my dream, but he is so driven in his work to reach the billionaire status someday so he can be in the top 0.01%!! What difference does it make, I wondered. The difference, as he says, is he is only able to rent private jets and rent private islands for his vacation rather than own them like the 0.01% do! Just then I realized, this race never ends unless you choose to end it wisely and keep the sanity. He also knows he doesn’t need more money, but views money just as a metric to keep score among his peer set! He is perennially running around trying to get into rarefied club at the top.

    • July 8, 2016 at 8:52 PM

      “Only” rent an island….ha! That’s *if* he has time for a vacation.

      I was just reading about a billionaire today that owned a whole archipelago of islands. Crazy what those guys in the 0.1% can do.

  • July 11, 2016 at 6:12 PM

    disclosure: I do live in an area with a bunch of tech bro kids. This drives me nuts.

    I certainly will remind myself to stay humble. There are way too many people trashing their wealth. Leasing one luxury car to another; spending thousands of dollars on game tickets; taking luxurious vacation; tipping excessively as if the waitress saved his life. The tipping part really gets to me, because this drives up the expectation of the area, and sooner or later I will be tipping 30%+ even with bad service.

    One skill I attained as I transitioned from eating out to cooking, is my culinary skills. Love cooking now.

  • July 20, 2016 at 10:15 PM

    Around here, friends/neighbors/colleagues average $200-$300 for their fireworks spending! My thought……craaaaaaazzzzzzyyyyy!

    • July 20, 2016 at 11:06 PM

      You got that right…$300 for fireworks? I could feed my small army with that for a month.

  • July 24, 2016 at 7:42 AM

    90% luck, 10% hard work!

    Just being in America is so lucky.

    I used to have this perpetual fear the gravy train will end. I do fear a 2 year downturn now. But I realized a while ago that even in the worst case scenario, life is damn good still b/c we live in America!


  • October 8, 2016 at 4:42 AM

    Oh my. I am comfortable. I have friends of great wealth. As I watch TV, with this election cycle being reduced to lowest form – both sides, I am reminded of arrogance. The lie that great wealth tells you is that you are above it all. On one hand they like to pontificate about global warming and mans impact, only to fly in a carbon footprint. Only to have mega homes that are huge carbon footprints. The food waste that I witness is undeniable. Big boats. Private jets. I don’t begrudge them these wonderful additions to their lives, but do object to them pontificating how everyone else should live. One of my very wealthy friends, as if to pat you on the head because you don’t quite have that degree of wealth, uses this wealth for very self indulgent things. House in Nantucket. Home in Palm Beach. All the big car toys to impress. Even her estate is structured to leave a large chunk, not to the incredibly loyal helpers and assistants who have made her life a dream, but to the the Palm Beach something or other so that she will have recognition in death to carry on the legacy that will be forgotten on the wind. I have such a profound appreciation for those who do help me. I feel more of the people than of the great wealth. As I’ve said many times, I would love to see what would happen to the Palm Beach lifestyle, if all those caring workers simply didn’t show up for a week, a month. Would anyone of the swells even know how to screw in a light bulb. Not all are like this but a great number. Look at the Hollywood entitlement types. The sport overpaid, super star prima donnas. It’s been rather interesting to watch the different series on TV that spotlight people giving up their larger homes to live tiny. They say that it frees them up to do real things with their lives. I totally get that but I would need a larger space because I am not one to sit still and need projects to do. I am just an old geezer in the winter of my life waking up with purpose every day with the hopes that I will contribute in some way. Me and my German Shepherd.
    I feel solidly aligned with real people. If you ever get to know regular real people, the ones who keep our lives going, you would be amazed just how well informed they are. Don’t know why I’m venting in what feels like a safe place but here I am.


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