When Simplicity Becomes a Luxury: The New Cost of Looking Poor
We live in fascinating times where the lines between wealth and simplicity have become increasingly blurred. The last century has brought unprecedented technological advancements, making it arguably the best time to be alive.
Yet, an intriguing paradox has emerged: behaviors and lifestyles once associated with poverty are now embraced by the well-off, particularly among the middle and upper-middle classes.
Consider this: what once screamed wealth — luxurious homes, flashy cars, and extravagant vacations — is now complemented by a new kind of status symbol: the ability to live simply and intentionally.
This shift in perception is reshaping how we define wealth and success.
The Paradox of Wealth
You see, things that seemed poor 10, 20, or 50 years ago are now done only by people who are more well-off. It’s strange, and while I don’t want to compare the people below the poverty line or the ultra-wealthy, I want to focus on the middle class or upper-middle class because it’s more relevant to that earning bracket.
Dr. Juliet Schor, a sociologist who studies consumer culture and sustainable lifestyles, explains, “As material wealth has become more accessible, the affluent are seeking ways to differentiate themselves through less conspicuous consumption and more meaningful, experience-based lifestyles.”
The Psychological Phenomenon
If you’re in that group with a nice house, car, and two vacations per year, you most likely don’t feel that rich, do you? Or at least, you don’t feel that other people having the same thing signifies great wealth. The paradox is that you might feel wealthy because you have those things, but not when others have the same.
Daniel Kahneman, a Nobel laureate in psychology, discusses this phenomenon: “Our happiness and sense of wealth are largely influenced by the social circles we move in. When everyone around us has similar material possessions, we seek other ways to stand out, often through lifestyle choices.” In a room where everyone is the same, how do you differentiate?
The New Flex: Not Working
A noticeable trend among the middle and upper-middle class is the “flex” of not working traditionally. Both my husband and I are digital marketers. We own a few websites and blogs, mostly run by just us. We outsource some tasks, but at this time, we have no employees or clients, and we like it that way.
You might be wondering what we do. A simple explanation would be that we recommend products as affiliates, as well as sell or resell courses. Now, I don’t want to focus too much on my business model as this is not the article about that, but if you want to learn more, [Go Here].
Our lifestyle might look like a flex because we have good income while spending much of our time gardening, cooking, and cleaning. This can be baffling to others in our social circles who work non-stop. Seeing us work a few hours a day and spend the rest of the time on personal interests can be hard for them to comprehend. But does this come at a price?
The Cost of Living Simply
Now, while I can’t complain about our income today, this was not always the case. I come from a lower-class family that moved to the United States when I was 11. Even in the States, most of my life was spent dancing at the poverty line. Worse was when my daughter was about to be born, my fiancé (now husband) was laid off. This was back in 2009, still reeling from the 2008 financial crisis. We had to live off one unemployment benefit, around $300 per week.
So, I believe I have a good understanding of both worlds. Interestingly enough, the way we live now versus in 2009 is not that much different. We still spend most of our time with the kids, don’t focus on luxuries, and share the housework. The main difference is in 2009 we did it out of necessity, now we do it as a choice.
This baffles many people we associate with these days. They are shocked we have all this time to spend on things like gardening or even preparing our own cold cuts and baking our own bread. They see it as a conflict between spending time making money versus spending time on things like I do. Which makes sense in their words as the less they work the less money they have. Which in result will decrease their wealth and status. It’s another paradox. But I’m not the only one that notices this.
Robert H. Frank, an economist specializing in wealth inequality, notes, “In today’s economy, the value of time has outpaced the value of material goods. The wealthy often choose to invest in experiences and personal well-being, which are seen as the ultimate luxuries.”
The Economic Equation
If you think of it from an economic point of view, it makes total sense. Let’s say you make $100k per year, which is roughly $50 per hour. Now, if you decide to take 3 hours off work to prepare a nice fancy meal for the family, even without counting the cost of ingredients, those 3 hours will result in a $150 loss from a job. Meaning the meal prep cost you $150 plus the price of ingredients, so another $50 or more, depending on what you’re making. This makes more economic sense to order or go out eating.
Now, this would be different depending on your income, family size, and what you’re making, but it’s fascinating how the price of a home-cooked meal has increased and not decreased over the years. So, how does that differ from being self-employed versus working a job?
The Reality of Self-Employment
Owning your own business or even a website is not the same as working 40 hours a week. I don’t get paid an hourly rate, so working more doesn’t necessarily translate to more money. Plus, studies show that the average worker only spends four hours and 12 minutes actively working out of an 8-hour shift. So, translating hours worked versus real work is hard, especially when working for yourself. However, showing how we spend our time tells more about us than we think.
Faith Popcorn, a futurist and trend forecaster, offers insights on why the trend of living simply is gaining popularity among the affluent: “We are seeing a shift towards ‘minimalist chic,’ where less is more, and the true luxury lies in the freedom to choose how we spend our time and resources.”
Understanding Time as Value
To understand the phenomenon, you have to understand that time is the most valuable thing. This is not universal. If you’re working three jobs to put food on the table, you’re probably not in the space to think, “If I only work three fewer hours, I can make a fancy dinner for my family.” And if you are in a dire situation, hang in there, there is always a light at the end of any tunnel.
While time is valuable, the exact value of time will differ at different stages of your life. That’s also true during different periods of history, so it’s not clear-cut.
David Landes, an economic historian, provides a historical viewpoint, noting, “Throughout history, the markers of wealth have shifted from visible material abundance to more subtle forms of status, such as education, leisure, and personal fulfillment.”
Making Choices
At the end of the day, it’s a choice. You do you. I know people making around the same as us who just complain all the time about not having enough time or money. They are often delusional to the point it’s hard to speak to them. For example, spending $9k on a three-day family trip and then complaining that they are living paycheck to paycheck.
Now to someone who only dreams of taking a vacation like that, it might seem absurd to spend so much and to only have enough until the next paycheck. However, these people will explain it as needing that vacation to relax, or putting the vacation above the value of money. It’s a vicious cycle. However, how can you get out of that?
The Role of the Internet
Before the internet opened up the possibility of an online business, people like me would have to own physical businesses to live a lifestyle like mine. Because even if you own a small business, you still need to do the day-to-day grind. You can’t take off without notice. That’s the case with some online businesses like services, and I ran one of those. It was like a job.
The internet has democratized the ability to achieve work-life balance and live a comfortable life while doing what you want. Maybe you’re not going to be the next Jeff Bezos or Elon Musk by balancing your life, but you can not worry about finances and spend as much time with your kids as you want. You will still have to sacrifice time, but it’s not a 1 to 1 ratio, which allows for an achievable work-life balance.
The Future of Work and Life
The interesting part? It’s most likely going to get even more evident as we move on with AI and technology. The need to cook or clean will become obsolete, yet people who can afford to cook and clean will look like royalty. Too much maybe, but the world is crazy like that.
I’ve experienced that firsthand, being perceived as rich enough to stay at home and take care of my family. Often, I’m thought of as richer than I am because of my approach to material things and work.
If you’re interested in knowing more about my work-life balance or even if you want to partner with me, head to profitwithanna.com now.
