I'll comment on this. I came from basically nothing, and now I do pretty well. I've seen a lot of luxury, that people from my background don't usually see. I used to think it was just capricious and wasteful.

A few years ago, one of my mentors took me on a ski trip with him and friends - I was the only person there under 30 and who wasn't a millionaire. The guys are wearing Rolexes, Cartier, Patek Philippe, nice clothing, etc. One owns a helicopter, many own boats, most own multiple cars and properties. Money made in different fields - construction, commodities, finance. There was a risk assessor/professional handicapper, my mentor was running one of the most profitable architectural firms in Dubai. Stupid money at the table I was dining at.

Another: One of my closest friends was a self made millionaire at 24. He's 29 or 30 this year. Lives in a 3 million dollar beautiful modern house with all the nicest conveniences.

When his earned income dipped from $800k/year to $200k/year a few years ago, he had to scramble to replace it. He got into a couple not-glamorous businesses, undercosted competitors, paid suppliers huge signing bonuses ahead of time to get great rates and some exclusive locations, and so on. His gym membership is over $200/month for a luxury place that's not much nicer than my $40/month gym. He spends over $1000 a year on orange juice.

But I had a realization one day - first, these fellas are spending a smaller percentage of their money on luxury goods, consumption, etc, that then average person does. Someone who makes $4k/month and eats out a $20 meal now and then is spending a heck of a lot more than someone who makes $200k/month (as my mentor was) and eats out at $200 meals every other night. The extra consumption for many of these gents fuels extra production.

When my work started to fall apart during the banking crash, I had a year of savings in the bank, and I'm quite frugal. I didn't hurry to get into anything - but if I'd had super high expenses, I would've, and I'm capable. My lower consumption meant I wasn't forced to produce right away.

Beyond that - nicer things actually are much higher quality. I try to buy clothes that are meant to retail for a lot. I look to go to Saks Fifth Avenue during Summer Sale or Winter Sale for the 80% off, or go to fashion sample sales. I tell you, $300 jeans look better, fit better, and hold up better than any $40 jeans. (And I buy my $300 jeans for $60-$120 on sale anyways). Well made watches last forever. Good scuba gear and skis last forever.

You get diminishing returns after a while, big time, but a 2010 Skyline or a Cayenne does drive a lot nicer than my 1995 J30. I'm Captain Frugal over here. I only spend a lot on quality tools, experiences, and gifts for other people. But I understand why wealthy people do. You get better quality, it pushes you to produce more. It's also a signaling thing. I have an Andrew Marc leather jacket I got for $300 that normally retails at like $1200. I remember going in to talk to a VP of Citizen's Bank, the head of that particular branch. I wanted to get a loan, and he said, "Hey, that's an Andrew Marc jacket." I said, "That's right, yeah." I look more successful. I always wear that jacket when I go to a bank.

Finally, some expensive things mean you know everyone in the room will be of fairly high caliber. I don't like haughty places so much, but actually, the really exclusive nightclubs have much friendlier people in them to strangers than run of the mill less restricted places. People know that by virtue of being in, you're probably alright.

Eh, I'm rambling. Long story short, I used to think the way you did. But there's some legit reasons to spend lavishly on certain things, and you might actually wind up closer to your goals if you do. Certainly if you produce at a high level, intelligently increasing your consumption can at times make you wealthier than being ultra-frugal and hoarding. I'm only recently learning this lesson.