Judging a Book by its Cover

Remember the phrase “don’t judge a book by its cover”?

We all learned it when we were 5 years old, and yet we do this all the time as adults. Worse yet, we make financial decisions based on those judgements.

Let me explain what this looks like.

One of your former classmates just bought a Range Rover and posts about it on social media. From that simple fact, you begin to construct a story in your head.

Buying a Range Rover = they are rich. They are rich = they are happy.

So you reason, in order for me to be happy, I need to buy a Range Rover!

All of this because of some story you made up in your head. A house of cards that comes crumbling down with just a bit of inspection.

We all know stories of people who bought something beyond their means. How do you know that isn’t the case here? Could your friend who you think is rich actually just be in loads of debt? Or saving less than you for their goals? Unable to go on a vacation with their family because that payment is destroying their budget?

Even if they are rich, we know that is no guarantee for happiness (do I even need to write this?)

For all we know, our friend driving the nice car is awash in monthly car payments, stressed about not saving enough for their goals, and not making as much money as we think.

Is that really something we want to emulate?

Heck, they may even be rich, happy, and love their Range Rover – that isn’t the point.

The point is we know nothing about the person driving the Range Rover. We don’t want our financial decisions to be dictated by the fantasies we tell ourselves about others. We want to avoid going into debt or postponing our life’s goals because we are competing with someone’s imaginary life.

So the next time you find yourself envious of that friend posting about their trip to Japan or their new home in Edina, remember that we know nothing about them.

And as difficult as it is, we need to stay focused on the only financial situation that truly matters, which is our own.

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Calvin McKenney

Author: Calvin McKenney

Cal is a financial advisor at Fortune Financial in Minnetonka, Minn. When you work with Cal, you receive a lifelong ally who is committed to listening to you, researching your options, weighing tried and true methods with the latest strategies, and finally, empowering you to make a decision that supports your overall wellbeing.

Calvin is a registered representative and investment advisor representative of Cetera Advisor Networks, LLC.

The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice, Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.