Life is a game, and we’re all stuck playing. What most people don’t realize is that there are different ways to play. In fact, there are different games altogether. In the realm of money, there are really only two games: the status game and the wealth game. Which game you decide to play is up to you.
Money is a tool, and people use it in very different ways. You may choose to use it on new experiences like travelling the world or going to the Super Bowl. Others may choose to buy new things with it like a new car or a house. Maybe you don’t want to use it at all. Maybe you just want to stash it away for a while until you don’t need any more income for the rest of your life. Whatever you do with money is your business. It’s why you use your money that matters.
The Status Game
Morgan Housel in his book The Psychology of Money talks about the evolution of the American consumer mindset. As Housel argues, the American consumer attitude stems originally from World War II. As soldiers returned from the war, many feared that there would not be jobs or opportunities for them. This sparked new legislation to make it easier for veterans to buy a house and go to college–and this legislation was widely viewed as necessary and beneficial to society. What they didn’t realize is the long-term consequences of these new laws.
With everyone on equal footing, we started to develop an equalist attitude. No matter what your background or current economic status, you could have a good life in America. The idea of the “American Dream” had come to fruition. This was the 1950s.
This lasted for a while, but all good things have to come to an end. The 1980s came around, and the world had drastically changed. But we were still the same. The wealth gap widened while our attitudes were unchanged. Regardless of wealth, we still held the expectation that we are all equal. No matter how much money we made, we all deserve the same stuff.
This expectation still remains today, even as the wealth gap widens further. The upper class members of society are living their best life while the middle and lower class tries to keep up. Here lies the problem: keeping up.
People who try to keep up are naturally comparing themselves to others. The equalist attitude that our parents had from the 1950s still rings in our ears today. We see our rich neighbor’s new Ferrari and fancy trips to Spain, and we tell ourselves we need that, too.
“If you want to be at the same level as these people, you have to own what they own and do what they do.”
This is the status game. By measuring your success by the successes of others, you have decided to play someone else’s game. Your competition, not you, determine the score. By playing the status game, you give up your control.
The Wealth Game
The wealth game takes a different angle. Instead of keeping score against the Joneses across the street, a player in the wealth game competes against themselves.
Let me tell you the story of a man from my hometown. Let’s call him Jim.
Jim was born and raised in a town of less than 2,000 people. This town had one stoplight and boasted the only movie theater in the county. Jim’s parents were immigrant farmers from Poland who could barely speak a word of English.
After Jim went to high school, he married his high school sweetheart and found a job in the same small town. They bought a two bedroom house a block away from the school.
Even though they didn’t have any kids, Jim and his wife would go to every school function they could. Football games, parades, concerts, you name it. They were avid supporters of the community and always had smiles on their faces.
After 33 years of marriage, Jim’s wife passed away. Jim would live another 15 years. At the age of 68, Jim passed away.
Months later, the local newspaper revealed that Jim’s net worth exceeded $5,000,000.
With his passing, Jim donated more than $500,000 to the local library, and more than $1,000,000 to the local high school. He donated the remainder of his fortune to cancer research.
Jim was playing the wealth game. He wasn’t interested in having the biggest house or owning the nicest car. He lived in the same house since he graduated high school, and he only owned 3 cars in his lifetime. Jim was interested in wealth.
Jim is far from a rare case. These scenarios play out every day, but the stories are rarely told. The people who play the wealth game are tough to find, but they are there.
And you can be one of them.
Playing the status game can be lots of fun–if you’re rich. You’ll end up with lots of cool gadgets and toys to play with. You’ll also end up with a nagging feeling of always wanting more. People who play the status game never end up wealthy.
People who play the wealth game do. Playing the wealth game removes the pressures of the outside world, and let’s you focus on yourself. That’s what really matters.