The Gentleman Who Can Afford His Life

There is nothing sophisticated about appearing wealthy. The greater achievement is building a life you can actually afford.

THE JOURNAL · CHARACTER & MONEY

Words by A. Mercer

There is a particular kind of wealth that photographs beautifully.

The car.

The watch.

The hotel.

The table at the restaurant where obtaining a reservation apparently requires either extraordinary persistence or a minor diplomatic appointment.

We see the result. We rarely see the invoice.

Perhaps that is why modern ideas about success have become slightly confused.

We have become remarkably good at recognizing the appearance of wealth while becoming increasingly poor at recognizing financial security. A man can drive an expensive car and worry about the payment. Wear an impressive watch and carry a credit-card balance. Live in a beautiful house and privately dread the mortgage. Earn an extraordinary income and somehow require every dollar of it simply to maintain the life everyone assumes he can comfortably afford.

From the outside, he may appear successful. From the inside, he may feel trapped.

I have never found that particularly aspirational. Because a gentleman should certainly know how to spend money. But perhaps more importantly— he should know when not to.

LIVING WITHIN YOUR MEANS IS NOT LIVING SMALL

There is an unfortunate image associated with financial restraint.

Cheap. Timid. Unambitious.

A life spent clipping coupons beneath fluorescent lighting while everyone else is apparently drinking champagne somewhere in Monaco.

That isn't what I mean.

Living within your means does not require rejecting beautiful things.

I rather like beautiful things.

A good watch. A well-made jacket. A wonderful hotel. A memorable dinner. A car that makes you glance back after you've parked it.

The question isn't whether you should enjoy these things.

It is whether owning them improves your life or quietly controls it.

There is an enormous difference between the two.

A man who can comfortably afford a $10,000 watch may enjoy it enormously.

A man who finances the same watch while carrying debt he cannot comfortably repay has not purchased luxury.

He has purchased pressure. The object is identical. The experience of owning it is not.

THE MOST EXPENSIVE THING YOU CAN OWN IS AN IMAGE

There is almost no limit to what a man can spend maintaining the appearance that he has more money than he does.

The right neighborhood.

The newer car.

The larger house.

The business-class ticket.

The watch someone will recognize from across the room.

The club membership.

The clothes.

The dinners.

None of these things is inherently foolish and what becomes foolish is purchasing them primarily because of what we hope they will make other people assume about us.

That is an extraordinarily expensive audience, and they aren't paying admission.

You are.

There will always be someone with a larger house. A rarer watch. A newer car. A better table.

If your definition of success requires remaining visibly ahead of everyone around you, congratulations: You have selected a game with no finish line.

QUIET WEALTH LOOKS RATHER ORDINARY

Real financial security can be surprisingly unimpressive from across the street.

The car may be several years old.

The house may be smaller than the bank said he could afford.

The watch may have been purchased secondhand.

The jacket may have been tailored rather than replaced.

The holiday may have been paid for before the plane left the ground.

There may be no visible evidence whatsoever that the man could afford considerably more.

That is the interesting part. He doesn't need you to know.

There is tremendous confidence in being able to afford something and choosing not to buy it.

Perhaps more than there is in buying it.

KNOW THE DIFFERENCE BETWEEN PRICE AND COST

A purchase has a price. A lifestyle has a cost.

Those are not always the same thing.

The price of the car is printed on the window.

The cost includes insurance, maintenance, depreciation and the portion of your income that will belong to it every month. The price of the house is written in the contract.

The cost includes taxes, repairs, furniture, utilities, landscaping and the strange phenomenon by which owning a house apparently requires visiting a hardware store every eleven minutes.

The price of the watch is simple.

The cost may include servicing, insurance and the opportunity cost of the money sitting on your wrist.

This does not mean you shouldn't buy any of them.

It means understanding what you are agreeing to. A gentleman reads the whole bill.

NEVER LET YOUR INCOME BECOME YOUR MINIMUM REQUIREMENT

One of the more dangerous things about earning more money is how quickly yesterday's luxury becomes today's necessity.

The first substantial raise arrives. The car improves. Another arrives. The house improves.

Then the restaurants. Then the holidays.Then the clothes.

Eventually a man earning three times what he once did feels no wealthier because his obligations have been promoted alongside him.

This is lifestyle inflation and it is remarkably polite, it doesn't kick down the door.

It simply whispers: You can afford it now.

Perhaps you can. That does not mean you need it. Allow your life to improve as your circumstances improve. Just make sure your margin improves too.

Otherwise, you haven't become wealthier. You've simply become more expensive.

MARGIN IS LUXURY

There is a form of luxury considerably more useful than the things traditionally advertised as such.

Margin.

Money left after the bills. Time left in the day. Space in the calendar. Room between what you earn and what your lifestyle requires.

Margin allows you to absorb the unexpected without turning it into a crisis.

The furnace fails. The car needs repairing. Business slows. A family member needs help.

You need to leave a job. An opportunity appears.

The man living at the absolute edge of his means has very few choices. The man with margin does. And that is where money becomes interesting.

Not because it allows you to purchase more things.

Because it allows you to make better decisions.

SOME OF THE BEST THINGS SHOULD TAKE TIME

There is nothing wrong with wanting something expensive.

Save for it. Wait. Research it. Perhaps buy it secondhand.

Allow anticipation to become part of ownership.

We have become accustomed to collapsing the distance between I want that and I own that.

Credit makes this remarkably easy. But waiting does something useful.

It gives desire time to defend itself.

Many things we desperately want on Monday become considerably less essential by October. The things that remain? Perhaps those are worth buying. I rather like the idea of looking at a watch and remembering that it took three years before buying it. Or walking into a house knowing you waited until the numbers actually made sense.

Delayed gratification isn't punishment.

Sometimes it is how possessions acquire meaning before you even own them.

BUY QUALITY. JUST DON'T BUY IT TO PROVE YOU CAN.

Form & Character talks frequently about buying fewer, better things.

There is an important second half to that philosophy: You must be able to afford the better thing.

“Buy once, cry once” is catchy advice.

It can also become a wonderfully convenient justification for overspending.

Sometimes the $300 shoes are worth buying instead of replacing $80 shoes repeatedly.

Sometimes the $150 shoes are perfectly good and the $700 pair is simply something you want.

There is nothing wrong with wanting them. Just call the desire what it is.

Not every indulgence needs to be disguised as an investment.

A sports car is not an investment because it makes you happy.

A watch is not an investment because someone on the internet said the discontinued dial might appreciate.

A beautiful coat does not become financially prudent because you calculate its theoretical “cost per wear” until the number becomes agreeable.

Sometimes we buy things because we enjoy them. Good. Enjoy them.

Just don't lie to yourself about the arithmetic.

DO NOT CONFUSE FRUGALITY WITH STINGINESS

Living within your means should not make you ungenerous. Quite the opposite.

Financial discipline should eventually make generosity easier.

Buy dinner occasionally. Tip properly. Bring the bottle. Give thoughtful gifts. Support people you care about. Help when you genuinely can.

There is something rather hollow about accumulating money while becoming progressively less willing to part with any of it. The objective isn't to die with the highest score. Money is a tool.

Use some of it to make life enjoyable.

Use some to make other people's lives better.

Save some so tomorrow has options.

The proportions will differ from man to man. The principle should not.

YOUR FAMILY DESERVES SECURITY MORE THAN STRANGERS DESERVE TO BE IMPRESSED

This may be the simplest test.

Before spending significant money to improve the appearance of your life, ask whether the people who actually depend upon you are secure.

Emergency savings. Insurance. Retirement. Debt. Education.

The boring things.

They do not photograph particularly well. No one has ever received many likes for a fully funded emergency account.

But providing security is one of the least glamorous and most meaningful things a man can do.

There is little sophistication in having an impressive car parked outside while financial anxiety lives inside the house.

Take care of home first. The strangers at the traffic light will recover from not being impressed.

LEARN TO SAY “I CAN'T AFFORD THAT”

This sentence has become unnecessarily embarrassing.

I can't afford that.

It does not necessarily mean you are poor.

Sometimes it means: That isn't where I choose to put my money.

Or:

I could technically purchase it, but doing so would violate the financial standards I've established for myself.

That is a very different thing.

Perhaps your friends choose a holiday outside your budget.

Perhaps the group wants the more expensive restaurant.

Perhaps someone suggests upgrading something you have no reason to replace.

You are allowed to say no.

A man who requires other people to believe he can afford everything will eventually find himself buying things he never wanted with money he needed for something else.

There is no dignity in that.

THE FREEDOM OF NOT NEEDING TO LOOK RICH

Something interesting happens when you stop trying to signal wealth.

You begin making better purchases.

You buy the car you actually enjoy instead of the one most likely to be recognized.

You choose the watch because you like it.

You wear the jacket because it fits.

You stay at the hotel because the experience is worth the money.

You keep things longer.

You negotiate.

You buy secondhand.

You walk away.

And perhaps most importantly, you stop requiring possessions to perform the exhausting job of explaining your success to strangers. That job was never theirs.

A man's life should speak for itself.

THE STANDARD

Earn well if you can. Work hard. Build something. Invest. Save. Enjoy beautiful things. Travel. Order the good meal. Buy the watch you've wanted for years. Drive something that makes the long road home more enjoyable.

But do these things from strength, not performance.

Keep margin. Know what you owe. Understand what your life costs.

Let your income rise faster than your expectations occasionally.

Save before displaying. Provide before impressing.

Never allow the appearance of wealth to become more important than the reality of security.

Because the gentleman is not necessarily the man with the finest things in the room.

He may be. But that isn't what makes him one. A gentleman understands that restraint is not the absence of ambition. That enough is not another word for failure.

That money should provide freedom rather than applause.

And that one of the quietest demonstrations of confidence is being perfectly comfortable living beneath what the world believes you can afford.

There is nothing sophisticated about looking rich. Build a life you can afford.

Then make it a rich one.

— A. Mercer

Keeper of the Standard

FORM & CHARACTER

The Art of Living Well.