Save. Spend. Splurge.

Does being from a certain culture affect the way you look at wealth and money?

I’d say so.

It is no secret that Chinese people for instance, believe that the only way to become wealthy is to own a lot of real estate.

Houses = Wealth for them.

They’re pretty impressed when you tell them that you have 4 properties in your family, never mind that those properties are in a village in the middle of nowhere.. because it’s property.

If you DON’T own a house, you can’t possibly become wealthy. It just isn’t in their general cultural mindset.

(Of course, not ALL Chinese people think like this, I am obviously generalizing.)


I know a Chinese family that owns a property in each of these cities:

  • Tokyo, Japan
  • Lake Tahoe, USA
  • San Francisco, USA
  • Sydney, Australia

Do they actually live or rent out these places when they aren’t there? No.

No one in their family can really live in all 4 locations at once unless one of their kids decides to relocate to Sydney or Tokyo, but they refuse to sell because the Chinese mindset is that the more properties, the better.

Especially in prestigious cities.

In fact, I’d wager that most people think Houses = Wealth although not to the extent that the Chinese take it.

How many times has someone told you: It’s time to start owning a house and building wealth.

Or: Owning a house is the only way you’ll become rich.

Upon hearing this, have you ever questioned them whether or not a house equals wealth?

I am not saying owning a house does NOT equal being wealthy, but consider this:

Isn’t having a $400,000 house really the same (for all intents and purposes) as having $400,000 in maxed out retirement accounts and in cash in the bank?

I’d rather have the latter to be honest (although both would be nice!), but assuming they’re both equal, $400,000 anywhere you put it is considered to be “wealth”.

I just prefer liquid assets over having a fixed one, as it is more mobile and less of a hassle.


The risk is still the same no matter which asset class you decide to stick your money

With houses, you run the risk of it dropping in value from a market crash… but it’s the same if you put your money in investments on the stock market, in index funds, bonds, cash, collectibles, antiques, or whatever other asset classes you decide to put your money in.

Having money instead of a house, just means you can spread it out over different things (bonds AND stocks) a lot easier than if it were all stuck in one spot.

Wherever you decide to keep your wealth, the best rule of thumb is to make sure it is diversified across all assets of wealth, rather than in one asset class alone.

In other words, do not keep all your golden eggs in one basket.

You are only going to cause yourself a world of hurt if you decide to put 90% of your wealth in a house or 90% of your wealth in stocks but none in bonds because then everything you have saved and owned in life, is dependent on it.

Have you ever considered how your upbringing and culture affects the way you look at wealth and building it?


  • Dillon

    I love the cultural aspects as they lead to differences, very interesting stuff. In your 400k example, it is hard for me to say in a vacuum, – although if you are familiar with the SDI model, I’m a hub so I say “it depends” for just about everything anyway, ;). For the house, it would depend on the area/valuation/taxes, family size, intent (a house to just live in or one to sell/rent for profit) while for the account, I would want to know if this is a taxable account, IRA, Roth IRA, or some type of 401k/403b/457 in addition to the fund choices/fees. I’m inclined to agree with you probably in choosing the liquid amount but it wouldn’t take much of a scenario for me to see where the 400k house would be relatively advantageous. I’ve never liked the real estate adage that “if all else fails, you can live in your asset” or something along those lines but I suppose it is a kernel of truth. Like I said, it just depends on a lot of factors, for me a big one would be age and family planning and how useful or much of a hindrance a house would be to those plans.

  • Michelle...

    It’s a real “thing” to own your own home in New Zealand and people strive their entire lives to do so. But after a couple of earthquakes decimated my city, many people have learnt that investing in property is not the “safe” option they once thought it to be (lots of land has been “red-zoned” and is thus unable to be rebuilt on).
    Prior to the earthquakes we were working toward increasing our property portfolio (both residental and commerical). Now we recognise that we need to diversify and have been searching out alternative investment options.

    • save. spend. splurge.

      Yes, Esther has said that ( and she has remarked about how hard it is to buy a home there in the first place, and renting is no picnic either (mushrooms in the carpet!?!?)

  • Ksenija

    I am Serbian and I also believe that the social environment and upbringing influences your view on what matters in life. I am Serbian, but I trust that the view on wealth is the same in most of the former Yugoslavian states. Wealth = a lot of cash to buy stuff. A lot of stuff you don’t need, but you might. One day. Most of the people believe that there is no chance in becoming wealthy if one has a regular job. One must obtain a highly desired CEO position in a government company that goes with a large paycheck and many desirable bonuses, such as free car and absurdly cheap real estate properties, paid vacations, medical care etc.
    Most of the regular people work their entire lives to pay off one apartment, but even when they manage to do it, they do not equilize it with wealth, but some form of personal success.

  • Anonymous

    Sure! My parents left a communist country and both had very little growing up. They’re not Chinese. When I was growing up my mom pretty much made sure that I had a lot of opportunities that she didn’t have.

    I don’t know how to say this nicely because I love my mom but loves stuff. I’ve noticed that with other immigrants that come to the U.S. and other first world countries like Canada.

    Many of them give as much as they can to their kids. They felt that deprivation and don’t want their kids to feel deprived.My parents house is paid off but they don’t invest houses in other cities.

  • Taylor Lee @ Engineer Cents

    My ethnically-Chinese-but-not-in-China family puts a lot of emphasis on owning a business. I mean, they all own their own houses sure and purport its general favorability (in no small part because they live in a VERY touristy area that has undoubtedly seen real estate prices boom in the last 20-30 years), but I wouldn’t say more so than anyone I’ve met in the US. They do, however, keep a lot of cash in foreign currencies (i.e. the US dollar) because where they live now inflation sometimes just goes absolutely bonkers.

  • Ramona

    I am Romanian and we also value properties A LOT. There was a pretty nasty recession here as well and property prices dropped a lot, but people still put a lot of emphasis on owning your house. It’s understandable, since the rent market is not as regulated as in the US for instance and many tenants have horror stories to tell (being kicked out with a few days notice, landlord popping in at midnight to check on ‘something’, prices rising too much etc.).

    This is why most do get into debt for almost their entire life to at least have their own home.

    The Romanian Leu (our currency) has also gone through a very nasty inflation 20 years ago), so people are scared to save Lei, since they fear they could get again into the ‘nice’ situation when they can buy a pair of jeans with the savings for a car / house. So, even if our Leu is still doing OK (it’s 4 Lei for a Dollar – so about 25% in value compared to the USD) and it’s been stable for 20 years, people still fear another debilitating inflation.

    The private pension sector is still in its infancy, the State pensions are a joke, so real estate is actually a pretty sure bet for many. And gold, maybe.

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