Now here’s a paradox. The rich sometimes look poor and the poor sometimes look rich.

The best book we’ve read on the lifestyles of the rich (and the pretenders) is called The Millionaire Next Door by Thomas J. Stanley and William D. Danko. This book is a real eye opener. They interviewed millionaires and found a surprising number of them live in modest neighborhoods and drive boring cars.

So who then is living in the big house in an exclusive neighborhood, and “paying” for fancy vehicles, expensive toys and vacations? It’s likely the lavish wannabe that has moderately high to high income, but little net worth. Everything they have goes towards the minimum payments on their expensive lifestyle. Their impressive house is making them house poor. They are working more hours than they would like to keep up the golden window dressing. Most onlookers envy their dazzling lifestyle and wrongly assume the lavish wannabes are rich. Nope. And they likely never will be.

And this “wanting to look rich” mentality has trickled down to the moderate income levels too, thanks to clever advertising and easy credit. How many times have you seen fancy newer rigs (way nicer than yours) parked in the driveway of a dumpy house or apartment building? Everyone wants to look more successful than they really are.

Trying to look rich before becoming rich is the surest way to the poorhouse that we know of. People must choose whether to look like they’re rich or to live under their income and save the difference like most millionaires have done. The true millionaire down the street is like a “sleeper” car that looks unimpressive, but can outrun anything in the neighborhood.