In the inflationary world of 2021, some new cars are sold ten to thirty percent over their asking price. This is the primary example most media outlets use when they cover inflation.
It’s so telling of the time we’re living in. People would rather pay more for a new car than drive their existing one for another year. Consumerism at its height.
One of our family friends is a very wealthy man. His net worth is in the high eight-figure range. His favorite car brand is Mercedes because his father and grandfather always had one. So he and his brother are also Mercedes fans.
When I was in college, he always had an E-class. He once told me a story about how he and his brother upgraded their cars. “Once every four to five years, we go to the dealership and buy the exact same car, but the latest edition. The people there also know exactly what we want so we just go there to sign.”
It’s been a ritual for them. Same model, same color (he buys silver metallic, his brother black), same configuration, just newer. About eight or nine years ago, they switched things up. They went for the S-class. A great luxury vehicle.
It’s about time for them to go to the dealership again. But last time I heard from him (a few weeks ago), he was still driving his 2017 model. Buying a new car is not at the top of his list. My dad asked him, “When are you getting the new model?”
“It can wait.”
The truly rich people I know are not consumers. They are owners. They own assets, businesses, and debt. They are often lending money to individuals and organizations instead of borrowing it to buy consumer products.
The world’s economy is built on consumerism. The primary preoccupation of modern society is to acquire consumer goods.
We have jobs because we need money to buy products, experiences, and to acquire mortgages so we can “buy” houses. Most people don’t own income-producing or liquid assets.
Most people own products and are in debt.
Think about it. Why does a rich person wait to buy a new car? Sure, they probably don’t want to pay more money. One of the reasons is that rich people understand supply and demand.