Wealthy people waste money on a certain type of purchase more than anyone else, says the founder of a popular personal-finance website

Courtesy of Chelsea FaganChelsea Fagan of The Financial Diet.
  • Wealthy people “waste money” on buying things to improve themselves, according to the personal-finance website The Financial Diet.
  • There’s a difference between spending to enrich your current life and aspiring to live a different life, said Chelsea Fagan, the site’s cofounder.
  • It comes down to intention: Buying a status symbol like a Rolex doesn’t inherently make you any different, but investing in a suit for a job interview can lead to career progression and thus improve your life.
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Can money help you reinvent yourself?

Some people think so – but according to a recent tweet from the personal-finance site The Financial Diet, there’s a right way and a wrong way to do it.

“The thing about spending money to become a new person – fancy clothes, a nice car, the right bars – is that you’re still you, just with less money,” the site tweeted. “The day you realise that you can’t buy your way to being someone else is the day you’ll start spending only on what truly matters.”

A follow-up tweet said: “There is a difference between setting yourself up with the right things to achieve what you want and buying things with the interest of improving yourself intrinsically, which never works. And wealthy people waste money on this more than anyone.”

Essentially, it can be hard to tell if your motivations to spend are based on enriching the life you’re living or aspiring to a different life altogether, Chelsea Fagan, a cofounder of The Financial Diet, told Business Insider.

“Most advertising (and so much of social media) is centered around a premise that a specific purchase, experience, social status, etc. will be the thing that ‘changes’ you, but it’s important to remember that you will always be yourself and that anything you can buy will ultimately just become part of the general fabric of your life,” she said.

Read more:
‘Being rich’ is an empty goal, says the founder of a popular finance website – and too many people are completely missing the point of building wealth

Something like a fancy new shirt, purchased just for status or show, will eventually become one shirt among many frequently overlooked in your closet, Fagan said. However, spending money on a nice suit for a job interview can ultimately help you feel confident and make a good impression, get a job offer, and lead to career progression – something that can improve your life in the long run.

“By reducing the expectation of what can come from any one purchase … we can gain clarity about which purchases truly bring us value in our real, everyday lives, and can look at purchases more for their utility than for how outwardly impressive they might be,” Fagan said.

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