How to Tell if Someone is Faking It or Making It

After years of studying and observing the rich and poor looking for differences between the two groups I’ve noticed one indicator that can be used with surprising accuracy to determine whether someone is faking it or making it.

The two key indicators have to do with their car and their house. By looking at those two things you can almost always guess which group someone belongs to and gain a lot of insight to their financial intelligence.

For the purposes of this article, those “making it” are known as millionaires or those with the ability to become and stay one. Those “faking it” is everyone else, including millionaires that run a high risk to fall out of the “millionaire club”.

The House

Rich people tend to take care of their residence first. Rich people live in homes that are usually in the top 25% of an area, which is usually at least $250,000 as far as homes values go, but the house value isn’t the final factor.

Some people gain a lot of wealth quickly or over extend and are able to afford expensive homes. If the home is recently purchased or doesn’t have substantial equity in it, then you might be looking at someone who is faking it on a temporary high. If the home is rented and it’s not a vacation home, you may also be looking at someone that is faking it.

These people invest into their home living conditions before anything else. Many try to pay it off or reduce their payments to create a sustainable atmosphere. The financial intelligence of someone that is “making it” is focused on how to pay for their expensive house if they end up with a minimum wage job, which many are able to do.

Therefore, instead of spending money on vacations and extravagant things you’ll find they save their money and apply it toward their house.

Do not get the word “invest” confused with the mindset of an entrepreneur. A home is rarely ever an investment and entrepreneurs do not invest in their own homes, they invest in businesses and things that will return money to them. I use the word invest to simply mean spending priorities.

The Car(s)

You may be surprised to learn that most people that are well off invest money into their cars last and only after everything else is taken care of. Yes, some well off people have very nice cars, but they are more than likely paid off, or their house and other major things already are.

You know who prioritizes cars over everything else?

Those that are faking it. People that want to be like the rich rush out and get the quickest wealth symbol possible — a fancy car.

Most cars can be bought within an hour by simply signing a form and using your credit. Even those without credit can get a “car of the rich class” by providing a down payment. It’s a form of instant gratification.

And guess who loves instant gratification?

That’s right, the poor and the middle class. Rich people have developed a patience that is not shared by the other classes. They will work hard or invest in something knowing that they won’t get an immediate return and that it might take awhile for their investment to pay off if at all.

The guy at your work that just bought the new Camaro or Mustang, he’s poor to middle class for life, but hey, he’ll live in the moment now and drive around thinking he’s cool. Later he may end up regretting his decision and later selling his car or not wanting to pay for it, but for right now, he’s super fly.

The person that just parked a brand new truck outside their mobile home telling everyone that they use their car more than their house or that their house isn’t really all that important to them, has a poor mindset and low financial iq.

The reality is for the cost of these new or fancy vehicles many people have started up multi-billion dollar companies with less. But you see, the people purchasing these vehicles aren’t in that mindset, they prefer instant gratification rather than a lifetime of not having to worry about money.

See how you can gain a lot of insight into peoples minds just by looking at their house and car?

The House Vs The Car(s)

So here’s where it comes together.

Some of you might have already noticed this but haven’t thought much about it. I can’t count how many times I’ve been to a house and been simply amazed by it. The kind of house where you walk in and you’re like wow this is impressive, I want this. At that same house I can’t even count how many times I’ve pulled up in a better car than they owned.

Drive passed a few houses in a local high end neighborhood and look at their cars. You may wonder why there’s an old Honda Civic parked in the driveway of a mansion. You probably thought someone was visiting or that it was the maid, lo and behold, its the primary vehicle of the homeowner.

Sure, you’ll see high end brand names like Lexus, BMW, or Mercedes. You’ll even see new cars, but most of the time they aren’t as expensive as you think. That new Kia in the driveway took them 10 years to decide to buy it and cost $20,000. That fancy looking BMW or Lexus you may find they bought used for the same price.

Now drive through your nearest mobile home district or lower income neighborhood. Drive through the middle class neighborhood while you’re at it too. Look at all of the cars parked in the driveway. You’ll notice a lot of cars that are more expensive than the “rich” district.

Cars that simply don’t belong outside of the homes you’re looking at.

Eventually you’ll find yourself driving around town and scoping out houses and vehicles while saying “faking it”, “faking it”, oh he’s “making it”. You can quickly and accurately identify both the mindset and financial position of many people.

To make this more accurate I’ve come up with a minimal ratio that has to be applied because you will see Ferrari’s parked in front of mansions and Range Rovers parked in front of middle class homes worth more than $250,000.

Take the minimum of $250,000 for a house. The ratio to use is 10 to 1. If the car outside of a home that’s at least $250,000 and is in the top 25% home values of your city is accompanied by a car that is 1/10th of the value of that home or less, than over 90% of the time you are looking at someone that is making it.

If that calculation fails, then you are looking at someone who is probably faking it.

Here are some examples:

You drive passed a million dollar house in your neighborhood that is among the top 25% home values in your community. Outside is a Ferrari that you know costs $250,000. That’s 25% of the home value, chances are this person is faking it. The only exception I’ve found is if you live in an area where $1,000,000 buys a house so far exceeding anything else in the area that it makes no sense to spend anymore or the home is a vacation home.

You drive passed a $500,000 home and notice a new Mustang sitting outside worth about $30,000. This is an appropriate car for the homeowner because it falls under the 10% ratio. The further below 10% the ratio is, the higher the chances that the homeowner is “making it.”

It’s that simple because wealth and financial intelligence is a state of mind. It’s not something only gifted people have; it’s a habit. It’s the way you do things. It’s taking that extra $50 and investing it instead of eating out every night. It’s putting money toward your home and working toward sustainability instead of buying new cars.

Can you maintain your current lifestyle for a long time if you lose your job?

You see, being rich is just a choice. Start doing what the rich people you admire do to save and invest. Don’t just try to copy their spending habits, they’ve earned those, you haven’t.

The majority of houses over $250,000 have a library in them, why do you think that is?