That's What Rich People Buy
The purchases that signal wealth and quietly lose value.
"Buy what rich people actually buy, assets that appreciate, because the stuff that makes you look rich starts losing value the day you buy it."
Meet Travis. He grew up poor, walked away with about $5 million from selling his e-commerce store, and did what a lot of people who grew up with nothing do the moment the money lands: he bought the life he’d always pictured rich people living.
At the end of 2018, I sold my e-commerce store. After taxes, I netted about $5 million.
I grew up poor, the youngest of five kids, with my dad pouring concrete for a living. So I always assumed that when you finally made it financially, the next thing you did was buy all the things you never had. That's what rich people do, I figured.
When the money hit my bank account, I went on a spending spree: a boat, multiple brand-new cars, a badass $300,000 backyard swimming pool, and many other extravagant wants. When the spending was all said and done, almost $2 million was gone, spent on assets that were depreciating the day I bought them.
After selling my business and surrounding myself with actual rich people, I learned that the majority of real rich people buy things that go up in value, not down. So I sold off the depreciating assets, losing a ton of money in the process.
One saving grace: I didn't blow it all. Around the same time as the spending spree, I put $2 million into a low-cost index fund and haven't touched it since. It has nearly tripled in value. That's the difference I wish I'd known on day one. The rich focus on appreciating assets. The newly rich focus on depreciating assets that make them think they're rich.
Today, you would not know my family has any money. I live in the middle of a cornfield. My wife and I no longer have a boat, and we drive five- and six-year-old vehicles. These days I buy what rich people actually buy: appreciating assets. Not what poor people think rich people buy: depreciating assets.
Up next · Lesson 23 All In Twice How much of your net worth is too much to bet on one thing, including yourself. Read next →