In 1991, a researcher named James Duesenberry proposed a theory that explains why people spend more as they earn more. He called it the “Relative Income Hypothesis.” The idea is simple: people don’t just care about what they have. They care about what they have compared to others.
This is why someone earning $250,000 a year can feel broke if their friends are making $500,000. It’s why the new Tesla Model S doesn’t feel as exciting once your neighbor gets the Porsche Taycan.
It’s also why flaunting wealth can be a trap. Not just financially, but socially.
The richest people you know—the ones who stay rich—understand this. They don’t flaunt their money. They don’t feel the need to. And that gives them an advantage most people don’t think about.
Why Flaunting Wealth is a Double-Edged Sword
Wealth signals status. And status is something humans have chased for thousands of years. But the second you start flashing your wealth, you invite a set of problems that can make life more complicated than it needs to be.
1. It Raises Expectations (And Rarely Ends Well)
In the early 2000s, a lottery winner in West Virginia named Andrew “Jack” Whittaker won $315 million. Within a few years, he was broke. His wealth made him a target—friends, family, strangers, and scammers all lined up to get a piece. His house was burglarized. He was sued. His relationships fell apart.
It turns out, the easiest way to make yourself responsible for other people’s financial problems is to make your wealth obvious.
The moment you show off money, people assume you can afford anything. That friend who wants to borrow $10,000? That cousin who thinks you should invest in his business? That fundraiser who “knows you can afford to donate more”? It never stops.
When you don’t flaunt your wealth, you avoid this problem entirely. You set expectations low. No one comes to you assuming you’ll foot the bill. That’s why people who build real, lasting wealth keep their financial success boring.
2. It Attracts the Wrong Kind of People
When someone buys a $100,000 watch, most people don’t think, Wow, they must be great at managing their money. They think, Wow, they must love attention.
Flaunting wealth doesn’t impress the kind of people who genuinely care about you. It impresses people who are interested in what you can do for them.
Look at Sam Walton, the billionaire founder of Walmart. He drove a used pickup truck. Wore the same clothes for decades. He wasn’t trying to prove anything. And because of that, the people around him—the ones who stuck around—were there for him, not his money.
Compare that to celebrities who surround themselves with people who disappear the second the money dries up. There’s a reason why “rich but lonely” is such a common story.
3. The More You Show Off, The More You Feel the Pressure to Keep Up
People who get rich quietly can live like they’re broke. And no one questions them.
But once you start flaunting wealth, you create expectations for yourself. You drive a luxury car? You always have to drive a luxury car. You wear expensive clothes? You always have to keep up appearances.
The more you spend to look rich, the harder it is to stop. That’s why many high-income earners live paycheck to paycheck—they’ve created an identity based on their wealth, and walking that back feels like failure.
4. The Smartest People Know That Real Wealth is Freedom, Not Status
When you break it down, money is just a tool for freedom. It lets you make decisions on your own terms. Quit a job you hate. Travel without worrying about expenses. Spend time with people you care about.
But the second you start using wealth as a tool for status, you give up that freedom. Now your spending is dictated by what other people think.
Warren Buffett lives in the same house he bought in 1958. Mark Zuckerberg wears the same t-shirt every day. Jim Simons, one of the greatest investors of all time, actively avoids media attention. These people understand that the best part of wealth is not having to care what others think.
The Real Flex? Letting People Underestimate You
The smartest people play a different game. They build wealth quietly. They live below their means. They let their investments do the talking.
And while others are caught in a cycle of trying to impress, they quietly get richer—without the social baggage.
Because the best way to stay rich is to act like you’re not.