A penny saved is a penny earned, until you reach the next financial class and find your old aphorisms do more harm than good

Financial skills in one class don't transfer from one to the other. The skills that enable you to move from the lower-class to the middle-class won't necessarily get you from the middle-class to the upper-middle class. For example, let's say that to get to the middle-class, you focused on your studies and lived within your means. You listened to adults, such as your counselors, who urged you to consider going to a good school. You didn't think twice about getting a student loan because everybody was doing it, and it had the blessing of the adults in your life.

The people in your income class were nearly always broke, and so everything you bought was a core necessity. Your edge against your peers was that when you got a little extra money, instead of blowing it in a bar, you spent it on something you needed, whether it was to fix the radiator on your car or to buy schoolbooks. All of this helped keep you in school and out of trouble.

All of a sudden, upon graduating, you get a job as a junior paralegal at a law firm. Upon receiving your first paycheck, you then apply it towards all of the things you've wanted to buy: maybe a new car, maybe health insurance for once. You still live within your means, but you justify the new expenditures because these are the core things you need. However, after a few months, you find yourself living hand-to-mouth because you never learned how to save.

What's worse, is that a whole new set of expectations have come up. Your peers are different, and they all live in a different zip code. At a mixer, you meet a real estate agent who encourages you to buy now. Eager to reap the rewards of your newfound success and fulfill those dreams you always had, you get the largest house the bank is willing to mortgage. The numbers on these term sheets are so alien to you that you just space out when you sign the paperwork. But you trust this process, because, after all, you went through the same thing with student loans, and look how far that took you.

A housing crunch happens, or the job market unsettles, and now this fairy tale has a tragic ending. What people fundamentally don't understand is that growth and achievement are much like the cycle of scientific revolutions: Phlogistons no longer make sense in the theory of atoms. Likewise, going from one class to another requires re-thinking every aspect of one's life, not just money. Even the notion of "financial goals" may only apply to people in one band of financial standing.

Moving from middle-class to upper-middle-class extends the above example. At that level of wealth, concepts from Ramit Sethi's I Will Teach You How To Be Rich would no longer apply. Controlling your spending and maximizing your income don't quite make sense when you're dealing with $100K+ tax bills. All of a sudden you need advisors, but the ones pursuing you are often sharks. The Goldman Sachses of the world are sharpening their knives, excited to skim from the nouveau fauna. Without the flexibility to adapt and reinvent oneself after a significant financial break-through, one may find themselves batted back down to where they started.

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Bargain Slumming

Being stingy or frugal when one can afford to spend more is, in a way, like slumming. Slumming is the act of living or participating in a lifestyle that is below what one can afford. The term is pejorative because it's inauthentic. To dip into living poorly is to show a false sense of struggle, and therefore elicit a false sense of endearment. Or to dip into living poorly is to temporarily taste alternative lifestyles, without any of the challenge associated with them, making for an incomplete or inauthentic experience.

Being frugal is usually considered a good thing, but the presentation is still inauthentic in the same way that slumming is. If a millionaire eats cheap burgers at fast food restaurants, they are presenting a false image to the rest of the diners. How you consume is the most telling indicator of class, and both the slummers and the frugal are guilty of consuming beneath their station.