Humphrey Yang: Keeping Up With Status Can Be a ‘Wealth Killer’ — 3 Ways To Avoid It
Written by
Adam Palasciano
Edited by
Cory Dudak
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The perks of being wealthy are abundant. The ideas of not having to worry about your finances and having the ability to spend on whatever you want alone seem like a dream for most of us. However, if you’re able to achieve wealthy status, it might become easier to give into a lavish lifestyle characterized by tons of spending.
Financial guru Humphrey Yang explained in a recent TikTok video that his friend’s night out in Las Vegas cost him an insane $5,581 dollars. How? Luxury venues tend to mark up the price of goods exponentially — over 1,500% in some cases. Yang then expressed in the video’s caption: “Status is one of the biggest wealth killers out there. If you’re willing to set your ego aside, you’ll be much better financially.”
As a wealthy individual, making financial choices like partying all night at fancy nightclubs might actually kill your wealth. Here are three ways to prevent this from happening.
Live Below Your Means
Living below your means is arguably the most important thing you can do to build and preserve your wealth for the long term. This refers to always spending less money than you’re comfortably able to. For example, it can be tempting to purchase a shiny new car, move into a nicer apartment and indulge in lavish dinners after you get a raise or promotion at work. However, succumbing to “lifestyle creep” means you’ll spend more money on wants and may not have enough money for your needs.
Choosing to live below your means will ensure you have enough money to cover the necessary expenses in life first.
Save and Invest Money Early and Often
The earlier you start saving and investing your money, the greater your financial growth potential over the course of your life. Consistency with your contributions is key. For example, starting to invest in your 20s versus your 30s can potentially mean a difference of hundreds of thousands of dollars once you reach retirement age thanks to the magic of compounding.
Additionally, the earlier you get started, the less money you’ll need to achieve your financial goals by a certain age.
Get Insurance
Insurance can be costly, whether it’s auto, health or homeowner’s insurance. However, opting out of insurance can mean the difference between preserving your wealth or being financially ruined in the worst-case scenario. For example, if you get into a bad car accident and choose not to get auto insurance, you may be on the hook not only for your auto repairs but for the other drivers as well. Or, if you need to go to the emergency room but don’t have health insurance, you could be stuck with a huge bill that you may not be able to pay.
Ultimately, these methods of avoiding lifestyle creep are all vitally important to achieving long-term financial stability and preserving your wealth. Together, these principles form a strong foundation for continued financial success.
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