Status Update: Why We Mistake Wealth for Worth

Too often, society now grants status based on a very narrow definition of success. This is very unhealthy on many fronts.

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The word “status,” not surprisingly, has Latin roots. (My dad, by the way, reads Latin. How cool is that? Useless, mind you, but cool nonetheless.) It comes from the Latin word statum, meaning standing — not as in standing up, but as in one’s ranking. In other words, one’s status is a reflection of one’s importance in the eyes of others.

Most of us crave status. Almost all of us care greatly about what others think of us. Psychologists have long lamented this situation and remind us how potentially unhealthy it is to have our self-esteem so directly determined by their perceptions of others. No argument there. That being said, with status comes flattery, social opportunities, respect for our opinions and attention. You know — all that horrible stuff.

Higher status? Bring it on! The problem from a financial-planning perspective at least, isn’t so much that we see status, that we seek status — that’s human nature — but rather how status has come to be awarded. Far too often, society now grants status based almost exclusively on a very narrow definition of success.

This definition pays woefully little attention to one’s family life, community involvement, or even impact on others. Instead, it focuses on one variable: perceived wealth. When you hear that John is “very successful,” what jumps to mind? He’s a great parent? He lives a balanced life? He’s a man of character?

Of course not. We all think the same thing. “Wow, John’s making the big bucks!” Even parents, subconsciously I hope, are often guilty of making “successful” synonymous with “financially successful.” Many times I’ve asked someone, “Hey, how are the kids doing?” And I’ve received responses such as this. “Oh, Mary’s a successful dentist, but Fred’s a struggling mechanic.”

Hey, perhaps Fred is a dud around cars and somehow his mom and dad have found that out. (Maybe through RateYourMechanics.com, I suppose), but more likely, they’re letting the children’s income determine the adjectives. What’s more, we even mismeasure this mismeasurement. We gauge people’s financial successes not by their net worth statements

(that would be bad enough — and of course, hard to do), but instead by their material possessions. Is it any wonder conspicuous consumption rules nowadays? Of course not. Many of our purchases are made with others in mind, whether we realize it or not. From the sizes of our homes to the logo on our clothes, to the brands of our cars.

We’re trying to make a statement about ourselves, and at its core, that statement is very basic. “Look at me — I’m worthy.” Ben Franklin said it best: “It is the eyes of others and not our own eyes, which ruin us. If all the world were blind except myself, I should not care for fine clothes or furniture.” Geoffrey Miller, one of the foremost experts in evolutionary psychology, assesses the situation even more bluntly:

“Modern consumers in particular strive to be self-marketing minds feeding one another, hyperbole about how healthy, clever, and popular they are through the goods and services they consume.” You know, a few things in life are more valuable than our self-esteem, yet we often willingly surrender to the opinions of others, and then we have to spend a king’s ransom trying to get it back.