A fancy robe nearly destroyed a philosopher's life.

By the late 18th century, Denis Diderot had risen to prominence in Parisian high society as a deep thinker and intellectual celebrity.

The philosopher and writer had spent 25 years working on his Encyclopédie, a 28-volume encyclopedia that attempted to gather together all human knowledge to spread scientific and secular ideas. The massive undertaking, a clear challenge to the traditional religious and political authorities of the era, contained 71,818 articles and 2,885 illustrations. It is today considered one of the most influential works of the Enlightenment.

The work earned him prestige. Owning a copy of Encyclopédie became something of a status symbol. The original coffee table book for the aristocrats in Paris.

But for all the acclaim and success of his work, financial success evaded Denis Diderot.

The publishers pocketed most of the profits from Encyclopédie. He was, in a sense, an underpaid contractor on the project, rather than benefiting as its primary owner and promoter.

These modest means had never bothered Diderot. That is, until 1765, when he found himself unable to pay the wedding dowry for his only daughter, Angélique.

Caught in this bind, his saving grace came from an unlikely source.

Catherine the Great, the Empress of Russia, and evidently a fan of Diderot's work, offered to buy his personal library and commission him as her personal librarian to care for the books. She even advanced him 50 years of his salary upfront as part of the agreement.

Effectively overnight, Denis Diderot's financial means went from meager to extravagant.

Soon thereafter, as he outfitted himself for his daughter's upcoming wedding, he came to own a fancy scarlet dressing robe.

Diderot liked the status that the fancy robe conferred on him but quickly felt the remainder of his possessions could not compare to the beauty and prestige of this new one.

After all, how could he be expected to wear such a beautiful robe but sit in such a shabby chair, walk in such tattered shoes, or write at such a spartan desk?

So, in quick succession, he fixed those problems. He purchased a new leather chair. New shoes. An elaborate wooden desk. All of which seemed appropriately matched to his lovely scarlet ­robe.

Or, perhaps more important, appropriately matched to the type of person who wore such a robe.

In an essay later in life, entitled Regrets for My Old Dressing Gown, Diderot lamented the slippery slope:

"I was the absolute master of my old robe. I have become the slave of the new one."

I call this phenomenon the Scarlet Robe Effect:

A single status purchase can create a new identity. One that you become attached to. One that you want to continue signaling to the world. One that can lead to a spiral of additional purchases. Each new purchase chases the identity that the last one created.

I see too many people fall into this trap. Playing the status games that the world tells you to play. Attempting to buy improved social positioning, respect, and admiration of others through acquired status symbols.

I thought about it recently after seeing a young friend ask for advice on the pros and cons of buying a fancy watch.

It reminded me of an infamous tweet from a few years ago on the importance of buying a Rolex that sparked a veritable online storm. I'm still not sure if it was satirical or not, but the 30 million views clearly indicates it touched a nerve.

The rough argument in favor of doing this says:

• Buy Rolex (using debt if you can't afford it)
• Signal high status, positive attributes, etc.
• Experience the benefits of that signaling (be happy, be more appealing to romantic partners, be more appealing to do business with, whatever).

Obviously, I disagree with this logic.

Because the real respect, admiration, and trust you're looking for can't be bought. Status purchases rarely impress the people you actually want to impress.

And they rarely generate the reaction you expect. As my friend Morgan Housel wrote, "When you see someone driving a nice car, you rarely think, 'Wow, the guy driving that car is cool.' Instead, you think, 'Wow, if I had that car people would think I’m cool.'"

The truth is that nobody is really thinking about you all that much.

What's more, these status purchases are a road to nowhere.

As I wrote in my book:

Bought status is fleeting. It may improve your relative position, but only until the next level is unlocked and you’re right back at the bottom. It will keep you trying to enter what author C. S. Lewis famously referred to as the inner ring:

"As long as you are governed by that desire you will never get what you want. You are trying to peel an onion; if you succeed there will be nothing left."

But the allure of status purchases is very real. To ignore that is naive. No matter how enlightened you might be, you'll still feel the pull to purchase something in an effort to signal your success to the outside world.

I'd recommend asking yourself a simple question before you do.

I call it the Bought Status Test:

Would I buy this thing if I couldn't show or tell anyone about it?

This question cuts through the noise. Are you buying the thing because it makes you happy (great) or because you want other people to see you having it (not so great)?

• Are you buying the Rolex because you love the watch and it makes you happy? Or are you buying the Rolex because you want other people to think you're successful?
• Are you buying the car because you love driving it? Or are you buying the car because you want people to think you're cool?

The Scarlet Robe Effect is real. It's a reminder of the perils of bought status games.

True, lasting status isn't bought. It can only be earned. Through building and creating things that are real. Real, deep relationships. Real, tangible value creation. Real, visible health of body and mind. These things are the real status signals. They attract the right people in the right ways. This is earned status.

Instead of focusing energy on things you can buy, chase what must be earned. Not the things that look nice, but the things that feel nice.

Denis Diderot nearly destroyed his life. He didn't need a scarlet robe to signal his status to the world.

And neither do you.