Social Status Vs Wealth- A story of my Neighbour
Kunal Shah, one of the most intellectual Startup Founders of India, started an interesting series on Twitter. Status Vs Wealth. In a series of tweets, he makes some mindblowing observations. What is the difference between the society which is Status Driven, as against the society which is Wealth Driven. According to Kunal Shah, the most crucial skill that any entrepreneur should have is to study Human Behaviour. If you study Humans well, you need not study markets, economy, trends or pricing. Human Behaviour has all the lessons and all the hints.
I have been observing Human Beings since the Childhood days. I realized this much later, but I had this habit to listen to every guest who would come to our home. I would prefer sitting in a corner and listen to elders talk than playing with kids of my age. I have always believed in this idea:
Everything is a Case Study for me. Every person I meet is a Case Study for me. Every experience of life is a case study for me. Good or Bad, Very Good or Very bad, there is some learning everywhere.
Bigger the sample size, more accurate you can be with your judgements and decisions.
Due to the Lockdown, I am at my home again. Nothing has changed. I would still sit quietly in a corner- observe, listen and think. There is a lot of learning in the household discussions.
It so happened, that one of our past neighbours lost their job due to the crisis. The friends and family were worried about them. One day the news came, that the neighbours have booked a Honda Civic. Everyone was shocked by this move. On the one hand, people were worried and offering sympathies and on the other hand, the neighbours bought a Car. Days later they got an I Phone for their son. This led to widespread gossips and discussions, and I was witness to all of them. From all the gossips, I understood a few points about Human Behaviour.
- Losing a job is perceived as diminishing status in society. Whereas in reality, it is a personal matter. Also, layoffs or salary cuts have been common due to the COVID 19 Crisis.
- Losing a job is a Financial Problem, not a Social one. And thus, efforts could have been made to manage the Finances well, instead of the Status.
- The shortest way to experience a rise in Status is to ‘show to the world’. Or in the words of Kunal Shah “Those who suffer a sudden drop in social status, try to regain it quickly using various means and often use false methods or status products to signal the sustenance of lost status.”
- A Car, an Apple I Phone, the brand Honda City, are still considered status symbols. The brands have smartly projected themselves as status products.
- People are more concerned about their drop-in Social Status viz a viz drop-in Financial Status.
- People are fine living a life with low Financial Status but high Social Status.
- If an individual has to choose between Financial Stability and Strong Social Status, the societal pressure will force the individual to choose the later.
- This is the reason why people focus less on building Secured Long Term Investments, Substantial Savings and Financial Stability. And focus more on building a strong Social Status in society.
To paraphrase the words of Angel Investor Naval Ravikant, Don't play Status Games, Play Wealth Games. Status Games get you nothing in the long run. The short term pleasures won't help you sustain at an age when you won’t be able to play the wealth games. I wish the neighbour had taken a smart decision without thinking about the societal viewpoint. It leads you nowhere.
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