Today we’re reading Exodus 37, Proverbs 13, Psalm 85.
This devotional is about Proverbs 13:7: “One person pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.”
Two of the best books I’ve ever read about personal finance were written by the late Thomas Stanley. They are The Millionaire Next Door and The Millionaire Mind. Stanley was a research professor who studied millionaires in America. He found that most millionaires did not come from wealthy families. Instead, they acquired wealth by owning their own business or businesses and being frugal with the money they made. They were far more likely to drive Ford F-150s than any make or model of sports car or luxury car.
In one of the books (I think it was The Millionaire Next Door) Stanley quoted a millionaire he had interviewed as part of his research. This man was a Texan and had a phrase to describe people who drove expensive cars and wore expensive clothes. That phrase was, “Big hat; no cattle.” The image is of a man who thinks he’s a cowboy because he wears a big cowboy hat but he’s not a cowboy because he’s got no cattle. A “big hat; no cattle” person, then, spends like he’s wealthy but, in part because he spends so much, he has very little actual wealth.
Thousands of years before “Big hat; no cattle,” was first spoken, Solomon observed the same truth. Here in Proverbs 13:7, he warns us to beware of appearances when it comes to wealth. On one hand, “One person pretends to be rich, yet has nothing.” This is able to project the appearance of wealth by spending money on expensive items. While he or she may have excellent taste in fashion, they have little to nothing in actual assets because they don’t make enough money to both save money and buy expensive luxury brands. Car leases with low monthly payments and easily available credit cards make the appearance of wealth easier than ever. But the fact that someone drives a BMW and wears Gucci shoes tells you nothing about that person’s actual level of wealth.
On the other side, Proverbs 13:7 says, “another pretends to be poor, yet has great wealth.” This is the person who spends far below what he or she earns. People in this category may have a high income or an average to low income but they spend as little of it on consumer items as possible. Instead of spending everything they earn, they put the money in savings. Once they have enough saved, they look to buy assets that build wealth instead of material objects that lose wealth. Which is better–to buy a $1000 iPhone or $1000 in Apple stock? The Apple stock is not tangible or visible. It doesn’t impress your friends or new acquaintances. But, if it is a good investment (and this is not investment advice, by the way), that $1000 can grow and keep increasing in value long after the iPhone has been recycled.
People in our world make snap judgments about someone’s wealth based on the cost of what they own but, the truth is that what someone owns has nothing to do with how wealthy they are. In fact, the more they spend money, the less likely they are to be building wealth. Those who become wealthy live frugal lives, save money, and invest it well.
This passage does not commend us to be greedy; it encourages us to be wise about what we do with the money that God enables us to earn. How are your finances? Are you saving and trying to build wealth as a good manager or do you spend every dollar that comes your way? Which of the two types of people described in Proverbs 13:7 would God want you to be? How can you get there?
Here’s an article from Dr. Stanley’s blog where he wrote briefly about all of this: http://www.thomasjstanley.com/2014/05/america-where-millionaires-are-self-made/