How To Stop Playing Status Games
Do you buy expensive shoes?
I don't collect shoes, but I've been eyeing a new pair of white Nike Air Force 1 that cost about $170 AUD.
In truth, I don't need them.
I already have a pair of shoes that do just fine and cost way less.
But, why would I want them?
It'll elevate my status in the social hierarchy by showing I can afford such a shoe.
Then, I'll self-justify the purchase by saying:
"I've never bought white shoes, and I'll look good in them."
In reality, we all play status games.
The car we drive, the job we have, the clothes we wear, all signal status.
There is another side to this coin: the wealth game.
For this article, I'm here to argue why you want to play for wealth and not status.
One focuses on immediate social approval, the other on long term gains.
However, we can't stop playing the status game, it's only to the degree we play it.
Wealth Vs Status
What are the rules of these games?
Status is a zero-sum game.
In order for me to raise my status, someone else's status must go down.
+1, -1 = 0
In the context of owning a Lamborghini: to show the world I have one highlights someone else they don't.
In order to win, I must show and outspend everyone that I have enough income for pointless and generally useless purchases.
(The whole point of luxury brands.)
The wealth game?
An all-sum game.
It's quite possible for everyone to win by creating and providing value to the market.
(The pie that everyone slices from becomes bigger. That's the beauty of Capitalism)
Everyone has a problem they encounter; if everyone can provide a solution, they will be paid for it.
"Wealth is what you have left over after you spend money on things." – Morgan Housel, Psychology Of Money
There's two aspects of the equation: generating the income and minimising expenses.
Income – Expenses = Wealth
So, if you gamify your income, by setting a new high score (low score in this case) for your expenses, you're winning.
The better game to play, is the one where you can win by simply playing.
An infinite game, as Simon Sinek mentions.
Wealth is that game.
Status, how many times you try, someone will out beat you in any other way.
You have a Lamborghini, they have a Ferrari. You have a Grand Seiko, someone has a Rolex. You have a brunette, they have a blonde.
(Less so on the last example!)
In saying that, we will still have to participate in the status game knowing we're social creatures.
As a solution, you can create a form of the status game where you're only competing with yourself.
I think of the best status games you can play without others are those that don't require any upfront capital at all.
Working out, being socially competent, body posture, etc.
These traits do not require money, and will give you higher status without you even knowing.
What's The Purpose Of These Two Games?
Why Status?
Simply, social approval.
I buy the Air Force 1's to show others I can afford them and associate myself with the brand Nike.
In theory, people should like me more, or see me in a more positive light by the status I'm signalling.
In practice, most people won't care.
In fact, after seeing a pair of the new shoes, they'll imagine themselves owning and wearing them for the same purpose you have worn them.
Why Wealth?
Two things: abundance and independence.
To be wealthy means to have more than enough to sustain your current lifestyle.
The amount needed is in proportion to what scale you want it to be expensive.
Also, the ability to give and help others around you from a full cup.
Independence is having the ability to choose what you work on without the need of working in a job that is outside your interests.
Like the idea of F.U money, where you can say "fuck you" to anyone without repercussion.
The one thing to screw this over at the beginning of your journey is buying a lot of stupid shit.
Slavery To Your Lifestyle
"People who live far below their means enjoy a freedom that people busy upgrading their lifestyles can't fathom." – Naval Ravikant
The trap we might eventually fall into is spending more as soon as our income increases.
Instead of being risk averse, we act under the idea that the money will always come.
(Nassim Taleb mentions salary as one of these great addictions.)
However, what would happen if that source of income were to disappear and our expenses still remained the same?
Would you feel the sting of a lifestyle that is unsustainable?
Or worse, have you taken on large amounts of debt to fuel this lifestyle?
The real risk is what's not accounted for in our decisions, and that risk when it comes to finances is unexpected costs.
This is where you can become a slave to your debts and the lifestyle you have created.
The cars you have on loan, the expensive clothes you buy, and the big house you pay a mortgage on: you are forced to work to pay them off.
If you have no debt, or a cost you are obligated to pay, you have a freedom unimaginable to those who don't.
The Sacrifice Needed For Wealth
Minimise unnecessary spending as much as you can
For the moment.
Arguably, what clothes you wear doesn't matter. What does is how they fit on you.
You do not need to buy the label. I'd recommend UNIQLO or buying from people their used clothes.
Can you afford to go out on a Saturday and make it look good for your instagram page?
Because, I sure as hell can't.
It's called delayed gratification for a reason, because you will get your pay off in the end.
No matter how unsure we feel about the outcome.
And, I want to add a bit from Alex Hormozi.
The 'killers', income producers, looked when they were young are not what they are now.
They are not the kid with the Lamborghini or the Rolex.
They were hungry and had a desire to learn as much as they can to increase their earning capacity.
They played for wealth, not status.
What We Truly Desire
My brother made an interesting observation about the kids he sees in high school.
A lot of them have gold watches.
I noticed this when I ran into one of them at an awards ceremony.
Wearing an all black, silk shirt, buttons half done, with a gold watch popping out.
Why would they wear these watches?
Signalling.
Wealth is what cannot be seen, being rich is what can.
(I don't know if these boys are actually balling in their bank accounts.)
It's not the materialistic stuff we want.
I'll take this idea from Morgan Housel from his book Psychology Of Money:
It's the respect and admiration from others, and we think the material possessions will help us gain it.
But what tends to happen is people do not respect you for the materialism.
In fact, you're not a part of their thought process.
They picture themselves in your shoes. Wearing the nice watch, the nice car.
And that's the game.
I know our egos want to show others that we're better than them.
But, we'll always lose.
You might end up a slave to debt and your lifestyle for someone to outspend you.
They'll have the nicer watch, the bigger house, the more expensive car.
However, we can't stop playing the status game, we're social creatures after all.
But the best game is where playing means winning, not losing.
So, what will you choose?
Wealth, or status?