Post by Seth Busetti

We’ve all heard it or even said it before…”Oh, they’re really making it, big city jobs and designer clothing!” “They’ve done well for themselves, Jack drives a BMW and Meg has her own jewelry company.” “Jeff is clearly good with money, he even has a house with a pool.” “Sue’s parents are big donors to their alma mater, so Sue obviously knows a lot about money.”

As Alexis and I have matured in our thinking about money, we slowly learned the lesson communicated in Stanley and Danko’s cornerstone book, The Millionaire Next Door. Most of the truly self-made wealthy people in this country “don’t live in Beverly Hills or on Park Avenue-they live next door”. And in a lot of ways they probably don’t look as superficially rich as some of our poor friends. Most “regular” people who actually have money got there through a combination of hard work and time, practicing disciplined saving, wise investing, and controlled spending for years and years. In contrast, the facade of wealth is cultivated by a desire to display the status culture immediately. To be in step with the lifestyle portrayed on television shows and commercials, you must buy brand-name everything, pay top-dollar for the newest whatever it is (iPhone?), drive brand new cars, attend the most expensive colleges, and eat out every night with your friends. What is the true story behind the people who are living this way? Perhaps it goes something like this:

Kelly graduated from college with $80,000 in student loans. It was really important for her to go to a top state school. And her high school friends were going there. The Division I football games were better too. There she met her husband Mark. This was clearly God’s will. She got okay grades, an okay degree, and now has an okay job doing office work at a reputable company. Her friends and family assume she is making a six-figure salary. Kelly knows the only way for her to get to that level would be to spend ten years with her company and climb the management track. She’s not sure she has the drive for that and she doesn’t like the idea of kissing up to her boss so much. Her last performance review was okay, but not likely enough to get her promoted. But she still wants a fighting chance, and has been coached that she’s got to dress for the part and act like she’s in the job she wants to hold. So she looks to the senior woman in the office, Elen, the high-power VP of such and such, who always has great makeup, great office clothes, drives a luxury car, has a maid, and lives in a big house in the posh part of town. Kelly doesn’t know anything about the VP’s personal life. But Kelly pays attention at work, and makes sure to buy the most expensive makeup and wear top-notch stylistic clothing and accessories. It must be working. All of her girlfriends tell her so. And her Pinterest page is all the rage, people from all over the world look to Kelly as a role model for “making it” in life.

Her husband Mark thinks she spends too much on “pampering”. She reminds him that her luxury items are way cheaper than his gym membership and truck payment (she doesn’t understand why he can’t drive a regular sedan, her payments are $100 a month cheaper than his). She tells Mark maintaining her chic professional look will all pay off when they both get promoted. Thursday rolls around and a friend sends a text…”Hey, K, we’re all going out tonight. Tina’s B-DAY! Are you coming?” Kelly is torn. She just paid some outstanding bills, wrote a check for the mortgage, there are still ten days remaining in the month and there’s just no money left. She replies, “Sorry, don’t want to spend money going out.” The friend responds, “You saving up for another island vacation? Come on!” Eventually Kelly caves in… this is about building friendships, making memories, and that’s more important than money right now. There will be plenty of time to buckle down later. And Mark always gets to go out to nice dinners with his work colleagues anyways, and he doesn’t seem concerned about their finances. He says he mostly agrees with the stewardship concepts they were taught in their church small group, but that doing everything right now isn’t practical. So in the end, Kelly decides to go out, she tells Mark she’s got an important social commitment. It’s okay, he’s working late anyways. She doesn’t know where the money will come from, but there’s probably some left that she forgot about, and she took that bracelet back to the store anyways, so she puts drinks, dinner, and a small birthday gift on her credit card. She knows that they’ll have to get things fixed before the baby comes. But 7 months seems so far away.

Maybe this story is like yours. Maybe you are Kelly, or Mark, or maybe you’re the friend. Maybe you are a few years ahead of this, with a kid or two, and you realize you never got around to cleaning up your money situation. Maybe you are a few years behind this, the college student, who is assuming it will all work out when that high paying job kicks in. In any case, this is a facade, a mask, wishful thinking rather than financial reality. If you owe on student loans, you are not wealthy, you are in debt. If you drive nice cars, but are making payments, then the bank owns the cars. They are rich, not you. If you are swiping nice dinners or entertainment or clothing on a credit card, in anticipation that it will all work out eventually, well that also is not “making it”, or “doing fine”, that is just digging a hole in order to subsidize the illusion of wealth. I worked with some young engineers who took their first big bonus and used it as a downpayment on a BMW, or purchased a glamorous condo, all the while they were swimming in student loan and credit card debt. Illusion. Our experience is that the facade of wealth will eventually come crashing down, one way or another.

If this is you, or if you are on this trajectory, please reach out to us. We want to help you build real wealth, real stability, and an honest financial lifestyle that you can be proud of! We have free resources, like our Excel Budget template, plus an ever-expanding archive of blog articles and videos. We also do personalized plans to help you get your goals and dreams aligned with knowledge, lifestyle, and behaviors. Our goal is to see you reach your goals, and truly live in freedom.

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