Entrepreneurs are price-sensitive and buy ordinary brands

In the article “Spendthrift or Tightwad? Tame Expenses and See the Difference”, we explored spending behaviour as the key reason many people are not as rich as they should be.

I dare say that many of the high income earners who also double up as high spenders are rarely aware that their spending habits are the reason they are not as rich as they should be.

In Texas, it is called “big-hat–no-cattle,” a philosophy driving people who spend in anticipation even before they earn the money.

As a renowned wealthy man once said, “If your goal is to become financially free, you will attain it. However, if your goal is to make more money to spend on the good life, you are never gonna make it.”

The wealthy are solid characters built under strong parental influence, not a house-of-cards kind of background. The wealthy are different from the rest of us to the core — in their thinking and resultant behaviour. Take for example, their shopping behaviour of household items like cars and clothes. They do not buy expensive cars. In fact, many affluent people take pride in driving vehicles that do not denote the so-called high status.

I have met two categories of people in my career. On one side are high status-seeking people. They are usually dressed to kill on a normal day, drive status cars, and cut an image of class in virtually all aspects. They make good money but also spend it as quickly as it comes. Quite often, they spend it in anticipation before they earn it — they live partly on overdraft paid off by the next pay cheque.

Then there is the simple-looking people who live quiet lives, but well within their means. They are simple in virtually all aspects. Some make good amounts of money while others make just enough.

Next time you are caught up in one of Nairobi’s endless gridlocks, take a look at the car in the next lane. You will see clear indications that many car buyers are not rich people. You can tell this simply by the maintenance state of the cars. With such hindsight, you would logically expect a potential car buyer to spend more time looking for good deals when buying a car. Unfortunately, this is not the case.

Should you take deeper a interest in particular car makes, their owners, and how they make money, you will notice a further distinction. For example, entrepreneurs are very price-sensitive and buy ordinary brands.

Patrick Wameyo is a financial literacy educator and coach. Email: [email protected]