Saturday, January 30, 2010

Is being rich same as being cheapstake?

Reading an article on Time's money named "Guess Who's Cheap? People Who Know Lots About Money" provoked a thought inside.

I always hear lots of people complaining that "more money one have, more miser that person is". I think there are two perspectives of this:

1) As article talks, probably most of the rich people have become rich by saving their hard earned money, so they don't want to waste it. They have learned it by experience that every penny saved is much more valuable then penny earned, so they value savings and detest un-mindful spending.

2) Secondly I think psychology also plays an important role in their behavior. It’s very easy to spend small sums but very difficult to break a big sum to do a small purchase. For example if one has 10 Rs note and want to buy a 5 Rs item, many will not think even twice before buying the item. On the other hand, if one has 500 Rs and someone will tell them to buy a 5 Rs item with it; their mind will resist this purchase simply because it will be same as paying losing Rs 500 for Rs 5 item. I think this psychology plays an important role in why richer people are generally much conserved with their spending.

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