Don’t Judge a Book by Its Cover

Being in the banking industry I get asked all the time whether I see archetype customers walk through my doors, i.e. the big spender or the tight wad. The answer is yes, we see these kinds of people, but what we don’t see is a stereotype. What I mean is, not all women are shop-a-holic’s and not all men wearing designer suits have matching bank accounts. What you see isn’t always what you get.

If I’ve learned anything it’s that people are surprising. I’ve had customers that have walked in dressed as a street urchin and smelling to high heaven. The natural assumption is that they are homeless and penniless – living off of welfare and our hard-earned tax dollars because they’re too lazy to get a job. But, when you look at the account it tells a whole different story completely. They’ve got money, and lots of it. Conversely, I’ve seen customers step out of million dollar cars and wearing designer suits walk in. They’ve got that swag, you know, the walk that reeks of money. But, when you pull up their account you’d find they’re usually overdrawn. How’s that for irony?

You can’t make a judgment about someone based on the clothes that they wear, the car that they drive, or the walk that they walk. You just never know!

I worked for a bank whose CEO was the kind who liked to make assumptions about people and their money. At one of our annual meetings, he flat out told everyone that if we were opening an account for someone with only $25 and someone else walked in with $1 million to deposit, we were REQUIRED to leave the customer with no money and talk to the customer with money. Color me stupid, but how is that a non-discriminatory practice? Furthermore, what does that say about the type of business that he runs and what does that say about me for working there? Needless to say, I didn’t stay long.

But, as an example of how that backfired on him, we had a situation where an employee did what he was told. There was a man who walked in with a few thousand dollars to deposit into a free checking account. The employee began opening the man’s account and as they talked, the employee made the assumption that this few thousand was all the man had. So, when another customer walked in and wanted to open an account with $100,000 – guess who the employee picked as the better customer? That’s right, the $100,000 man. As it turns out, the guy with a few thousand dollars was just giving the bank a try. He had over $3 million in total assets that he was looking to move because he was unhappy with his bank. Had the employee done his job instead of making assumptions, he would have discovered this information. But, he assumed the guy with $100,000 was a better customer and so he focused his attention there, leaving someone else to handle the man with a few thousand dollars.

Just in case you’re wondering, the guy with $100,000 turned out to be kiting money between three different banks – all of which was part of a much larger money laundering scheme. I doubt very much the employee is still in the industry. All he saw were dollar signs and incentives for him. He missed the warning signs of trouble and he snubbed someone with much more legitimate worth. I believe the CEO was also relieved of his responsibilities when his comments and this situation were brought before the stockholders.

Honestly, the biggest difference between those with money and those without are their spending habits. If you pulled an average three month statement for someone without money and looked at it, you’d typically find erratic spending behaviors – eating out is the biggest offender! If you looked at someone with money, you’d see less spending across the board and you definitely don’t see a lot of eating out.

So, let’s do the math. Let’s say you eat out three times a week, at least two meals each time (believe me, this isn’t a stretch, I’m probably underestimating). I live in Austin, so the average meal costs about $10 roughly. This takes into account sit-down meals and tip. So, on average, a meal costs an individual $10. At two meals, three times a week you’re talking $60. Multiply that by four weeks in a month and that’s $240 just to eat out. But wait! Take $240 times 12 months and you’ll see that people spend $2880 a year just eating out – this doesn’t include the additional money spent on groceries each month.

This example is one I talk about a lot, EVERY DAY! People come in and they can’t understand why their account is overdrawn, what could they possibly be spending their money on? When we pull their statements and look at them, eating out is a large chunk of where their money goes. And the thing is, it’s a tough habit to break. People reason that they have to eat and it’s no big deal – I’m guilty of that myself! But those who have money have learned frugal living – unless you’re Paris Hilton and have money handed to you, but that’s another story.

If you truly sit down and examine your budget, you can figure out a way to save money and build wealth. It may take some cut-backs and sacrifices, but it’s better than struggling month to month. I often wonder how those customers who pretend they have so much money actually live the lie. It’s got to be a lot of pressure and a lot of lying.

Bottom line: Don’t assume that you know someone’s worth just by looking at them. They may drive a beat-up Honda because they know a depreciating asset isn’t the way to build wealth. They aren’t concerned with outdoing the Joneses; they’re concerned with ensuring they have a financial future. On the flip side though, don’t assume just because someone has money that they actually know what to do with it. Take the fact that Jose Canseco just foreclosed on his mansion. He bought more than he could really afford given his financial situation and now he’s paying the price.

21 thoughts on “Don’t Judge a Book by Its Cover”

  1. What someone wears or how they present themselves has no connection to how much money they have. I’ve observed the same things – people who look homeless who are rich and people who look rich that are nearly homeless.

  2. I have had this happen to me several times in my life. When I was 19 I was looking for a new car. I had saved up my money and was ready to make my move. Most of the dealerships wouldn’t even give me the time of day. I ended up buying the car from a family friend. I sent a letter to the sales managers of those dealerships along with a picture of me with my new car and a copy of the check I used to pay for the car. I guess my business wasn’t worth their time. I still drive that car 14 years latter. I am looking for a new car now. Do you think I will have the same problem? Probably so.

  3. What I find insane is people on the higher end of the income scale not living below their means. I was ask by a woman recently what my thoughts were on wealth and in general money. I told her debt should be limited and one should live below their means. To her this was a friction point. I just was surprised by her stance that credit card debt and living BEYOND one’s means was okay. Funny because she told me she was looking for someone who was ‘REAL’. To me, a credit card debt lets you live a lifestyle which really isn’t yours. Thanks for the post.

  4. Great article! And very timely. I always try to remind myself of this when I see some of my friends with brand new expensive cars. This recently happened and I was a little depressed about my own situation with my 10 year old cars and a friend with a flashy new one. But I’ve been trying to remind myself that she’s pouring money into something that really has no value in life (at least not in mine) and will spend a lot more on that car than I will with my used, but well maintained Toyota.

  5. Funny — I’m just about to dash off a complaint letter to my bank. I recently received atrocious service. I’m going to let them know that they only have about 1/7th of my assets, because I was just trying them out. And then buh-bye.

  6. When my wife and I bought our first house together in the late 90s, I was doing pretty well financially and had a lot of dot-com shares that allowed us to pick a very nice house. We’d started looking here and there, but nothing really came up. One Saturday afternoon on the way back from a pizza joint, we noticed a new housing development going up and stopped by to talk to a salesman.

    I’ll never forget what he said when two underdressed, pizza-smelling, slightly dishevelled people in their early-to-mid twenties walked in and asked to be told about the large modern houses.

    “I’m sorry, but these houses *start* at $300 000″, with the unspoken hint that we should turn and leave before we embarrased ourselves.

    Undeterred, we politely said that was just fine with us and went on to buy the most expensive one they were offering :) Good times, good times…the salesman was actually a nice guy and we considered him a friend for many years afterwards, but he nearly blew it in those first few minutes.

    I’ve always remember this and always try to treat people the same no matter their appearance. I don’t dress nicely very often myself and try to watch for the same upturned-nose situation to happen again, but I must say I’ve never seen it again.

  7. The greater Seattle area went through this learning curve during the 90s. The Jaguar and Porsche salesmen either realized that a torn t-shirt and jeans can mean “Microsoftie” just as well as “bum” or they found other jobs.

  8. I do it on purpose even, dress down in situation where my REAL position is strong. It frequently exposes sellers and/or financial people which leaves me in a good bargaining-position as the other part is confused and/or trying to get back on track.

    It’s fun walking into a car-dealership, unshaved, wearing a pair of dirty shorts, a cheap and old t-shirt with “Free the Cows!” on it, and say you’re interested in a new Avensis. (a $75.000 car here)

    Then, when the seller comes to the topic of how you plan to pay for this (which he invariably does quickly as his main suspicion is you can’t at all, and you may not be a “customer” worth spending time on, I say that I don’t like to carry that much cash on me, so perhaps it’d be more convenient to just swipe my card. Not a credit card (I don’t do those), direct debit. Cash. This minute.

    Car-salesmen have a hard time negotiating effectively with their jaw on the floor.

    Plus, it’s good fun.

  9. You know something kinda similar happened to my dad once. He was doing some work around his apartment building (which he has paid off the mortgage for, along with our house) and ended up having a little issue with a trespasser. Anyway, he had a little gash on his head but wanted to make a big deal out of it (long story) so an ambulance comes out to take him to the hospital.

    The paramedics at first weren’t doing much for him, I mean he was in his dirty t-shirt and jeans since he was just working around the building, but the paramedics seemed to think he was just some homeless guy. Well, then they found out that he owned the building, and packages started flying open left and right, they had him in a neck brace, and couldn’t get him to the ER fast enough!

    I’ve heard similar stories from coworkers as well. I do taxes seasonally, and you’re always getting clients coming in with fancy manicures, fancy hairstyles, and expensive clothes and they’ve got 3 kids and their income is so low they get a ton of earned income credit and they qualify for food stamps. And then you get the little old lady who’s wearing this coat that looks like it’s older than me, and she’s making $100K+ in interest and dividends from investments. Go figure…

    I’ll have to remember this if I end up going car shopping soon. Even better, bring my dad along after he’s been working all day!

  10. Haha. I had this happen to me too. I saved up for a new car (first one ever, I had some good fortunes that year) and had $30K sitting in my checking account. I knew which car, what options and what price it was going for. I walked in on my Saturday (with my “rough” weekend wear and weekend “beard”). I wait for almost 45 minutes while the sales guys kept telling me “Just one minute, I need to take this other customer first” [that came after I did, but happened to be a nicely dressed couple or some guy in a suit].

    I went somewhere else and made some lucky sales guy a good commission for 10 minutes of “easy” no-haggling work.

  11. This seems to be the topic du jour, and an apropos one it is, too. As I commented in another blog this morning, I was discussing the high price of London with my lawnguy (yes, he’s hispanic and no, he’s not here illegally) who had just returned from a vacation there. When I asked him why he picked London, he said it was a promise he and his wife had made to each other as to what they were going to do when they saved their first million dollars!

    I’ve never seen the guy in a suit, but I’m dang sure he can afford one better than I can.

  12. I’m glad to know that so many people have moved beyond making assumptions about others. You just never know what their situation really is, and most people with money don’t feel the need to flaunt it. Grace, I think that’s an awesome story about your lawn guy. I’m sure most people assume that because he’s hispanic and working in the yard that he’s illegal. Good for him that he made his first million!

    In fact, everyone’s stories have been fantastic. It’s funny to me how people in sales base their decisions on how someone is dressed. As a personal anecdote, a friend and I went into Jared’s to pick out the ring he was going to propose to my best friend with. We were dressed in jeans and t-shirts as it was a weekend. We stood there for almost an hour and not one person greeted us, acknowledged us, or offered to help us. Everyone else, including those walking in after we did were dressed nicer and helped first. My friend was ready to leave, but me being me butted in on someone who walked in after us and politely told the saleslady that she had just lost a sale which would have been made in cash because she assumed that because he was hispanic and we were in jeans that we weren’t worth her time (she had looked us up and down once or twice, which is why I chose her). She looked at me a moment and I repeated the word cash and then proceeded to tell her for an engagement ring. The couple sitting down were laughing at the astounded look on the woman’s face. She tried to apologize, but we left and went to Kay’s. The couple she was helping left too. They said she was rather snobby when they told her they’d need financing options.

    Just goes to show….you can’t judge a book by it’s cover!

    Keep ‘em coming guys!

  13. Well, yes, that keeps happening. A couple of years ago, my husband and I (we are both hispanics)went to Gateway in Rt 22 NJ (it is not there anymore, I wonder why…) to buy a computer in CASH. Long story short, as everybody has been telling here, we waited over 30 minutes (which is a long stretch for my husband who gets annoyed if we are not greeted almost inmediately), we looked around, we aproched the salespeople (who were chatting in the back, there were barely any customers) and nothing… but there comes a blonde, white lady (dress in the same kind of clothes as we were, so not nicer) and ALL of the salespeople jump in to help her and she was only asking for directions or something, NOT buying or looking to buy… come on, that is no way of treating customers. Obviously we left and bought the computer somewhere else. People here keep thinking that because we look as hispanic as we are and talk to each other in Spanish, that we are not gonna understand what they say, that we don’t have the money to pay for stuff or that we should get used to being ignored… Come on, give me a break…

  14. It IS strange. Though one time when visiting LA a friend of mine wanted to shop on Rodeo Drive. Since we were wearing jeans and t-shirts, I thought we’d get the cold shoulder, but the salespeople were awesome. I guess they can’t tell if you’re a movie producer or not by your grotty jeans. :)

    I do dress nicely when I shop, because I work at home and get sick of being in shorts most of the time, but I do drive a beat up Honda. And I have enough money to buy any new car I want.

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