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We buy stuff we don’t need to impress people we don’t know

8 October 2020 12:21 PM
Tags:
Gushwell Brooks
Debt
Personal finance
Consumerism
Mduduzi Luthuli
Luthuli Capital
social signalling

What is "social signalling?" Gushwell Brooks interviews Mduduzi Luthuli, a cofounder at Luthuli Capital.

Why do we buy cars we can’t afford? Or clothes on credit? Or expensive whiskey?

A Rolex tells the time as good as, well, your cellphone – but that’s not really the point, is it?

Perhaps you don’t feel special - the Rolex “signals” to others that you are.

We buy stuff we don’t need to impress people we don’t know.

Looking rich, but drowning in debt.

Related articles:


Old money doesn’t glitter. New money (read “debt”) burns like the sun

Research into the topic has shown that very few actually rich people flash their wealth, according to “The Millionaire Next Door: The Surprising Secrets of America's Wealthy”.

People who need to signal their success, however, tend to splurge on expensive items.

It’s not that rich people don’t practice “social signalling” – they do, it’s called “counter signalling” – showing off by not showing off.

Gushwell Brooks interviewed Mduduzi Luthuli, cofounder and Executive Director at Luthuli Capital.

They spoke about signalling (and counter signalling), conspicuous consumption and why we do it.

“Keeping up with the Joneses” leads to runaway lifestyle inflation and retirement sabotage,” wrote Luthuli in his blog.

“The driving force behind rampant consumerism is the need to fit in. To be part of a tribe. If you live in the nice suburbs, you ‘need’ certain things to signal that you’re part of that tribe. The luxury SUV, big house, and chemically manicured lawn.

“We all have egos; we all care at some level. When people think negatively of us, it usually bothers us. Acceptance from other people is a fundamental human need.

“What if you didn’t care? Or what if you cared less?

“To me, that sounds like bliss.”


Click here for the blogpost referenced above or here for all the rest.


For more detail, listen to the interview in the audio below.


8 October 2020 12:21 PM
Tags:
Gushwell Brooks
Debt
Personal finance
Consumerism
Mduduzi Luthuli
Luthuli Capital
social signalling

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