The first time I realized how much some people pay for status was when my boss purchased himself a Ferrari in 2014. Until then, and with me being a bit of a car enthusiast, I (naively) thought only car buffs purchased high-performance sports cars. But when I saw my boss pull up in that new Ferrari, I asked him about then engine – is that a V8? His answer – ‘I have no idea, but it’s fast!’. I couldn’t believe that someone would pay so much money for a car they know nothing about. I realized then that he purchased the car not because he had an interest in cars, but because he had an interest in showing others that he drove a Ferrari. It was a status purchase. A four hundred-thousand-dollar status purchase.

Early in my career, I spent a few years living in the very status-conscious city of Dubai, which was a big change having grown up in a smaller city in Canada. In Dubai, it seems like everyone is driving a nice car, wearing lavish jewelry, and carrying expensive handbags! It’s common to see someone driving a million-dollar Bugatti, wearing a Patek Philippe watch worth $300,000, or posting social media photos of their holiday in French Polynesia. Do you think these people would be buying these insanely priced items if no one could see them? Of course not. When looked at from a utilitarian perspective, the Patek Philippe watch is very heavy, fragile, and inaccurate when compared to a cheap quartz watch or a smartwatch. And, due to its strict maintenance schedule, low ground clearance and poor visibility, the Bugatti is a very inconvenient car to drive. And, travelling by plane for 27 hours one-way to Pacific islands where it often rains is exhausting! In all cases, these buyers are spending excessive sums of money to be inconvenienced by (relatively) poor timekeeping, challenging city driving, and long and arduous flights. Again, the buyers are paying for the prestige.

Now, although the previous examples may seem unrelatable, I challenge all readers to think of purchases they have made or items they would like to (or dream to) purchase in the future and decide if status has had any influence. Maybe you have made a comment like ‘I want to own a BMW one day’ or ‘I want a 1-carat diamond engagement ring’ or ‘I want a Rolex watch’ or ‘I want to attend an Ivy League University’. Once you identify one of these desires, ask yourself – would I still want this if no one could see it? Chances are that you are not interested in the BMW because of its safety rating, or the diamond size because you are a gemologist, or the Rolex because you have an appreciation for mechanical movements, or the Ivy League because you are an aspiring academic. You, like others, are influenced by the desire to achieve apparent status. It is important to be conscious of this influencing factor and to understand what is driving your purchases – if it is really for you, or if you’re purchasing to impress or appease others. Ironically, chasing status by overspending on things you can’t afford will prevent you from achieving true financial success.