Perception vs. Reality

They have more money than God.

It’s a statement that the boyfriend makes frequently, when talking about this old-timer, or his ex-in-laws, or that person. When his parents needed money to pay the overwhelming heating bills this winter, he was shocked when several of his siblings scoffed at chipping in even $100. “They have more money than God. I mean, they bought a new house a few years back, he buys a fancy new car every few years. And they act like they can’t afford to help out!”

Yep, the boyfriend buys into the illusion. He believes that you can actually tell something about how much money someone has based on the car they drive, and the house they live in. But the reality is, you can’t. Those things are just the “window dressings”; They don’t say anything about the person’s actual financial stability. A big house probably means a big mortgage. A fancy car? Maybe it’s a lease. The fact of the matter is, they could be in debt up to their eyeballs, living paycheck to paycheck, without an extra penny their name. What others can see tells them nothing about your actual financial situation.

The funny thing is, the boyfriend should know better. I can imagine his siblings sitting around, saying the same thing about him. After all, he owns the big house on the hill, on acres of land. He drives the fancy truck, carries the newest smart phone and a nice laptop with him everywhere. He has several other vehicles, a Kabota, a tractor, and lots of other “toys”. He has a boat, and takes long vacations every winter. Obviously, he’s loaded!

Actually, it’s all just an illusion. The house has two mortgages, and the reality is, unless he wants to work the rest of his life, he’ll have to get rid of it before he retires. His retirement is 100% dependent on a union pension and social security. The truck, smart phone, and laptop? They all belong to the company he works for. The boat, Kabota, tractor, cars? Loans. The long vacations? Well, he goes really cheap, with friends, and has to work while he’s there. The reality is, he pretty much lives paycheck to paycheck; Sometimes he manages to save up a few grand, but it never lasts more than a year before he’s back at zero. Actually most years, he barely manages to make it through the winter.

He isn’t a lost cause, but he’s going to have to make several big changes to turn things around. And that’s hard, because everyone sees the illusion. He’s having a hard time getting his sons to understand why he wants to sell the house; They have the expectation that the house is “their’s”, and Dad’s being selfish to take it away from them (the ridiculous entitlement of two twenty-something men is a topic for another time). The boyfriend is struggling with how to address this issue. To me, it’s easy; you be honest with them, and show them the illusion. The boyfriend doesn’t “own” the house, the bank does! It’s not in the boyfriend’s power right now to give the house to his sons. And expecting him to work another 20 years so he can do that? There isn’t a day that goes by that he doesn’t threaten to quit his job. And physically, I don’t think he’d be able to handle the job he has now long-term. Or the stress. What happens if he has a stroke, or a heart attack, or gets injured? They’d lose the house anyways, and he’d have nothing saved. Where would they all live? Who would take care of him financially?

The reality is, lots of people live with illusions. The house, the cars, the toys. Mortgages, loans, leases, credit card debt. It’s easy for someone to make assumptions about someone else’s financial position, based on what you see. But the reality is, most people walk around in denial about their own financial situation. So many people have no idea exactly how much debt they have, or what their net worth is. They don’t have a financial plan, they just go according to the monthly payments they can afford.

If people don’t know their own financial picture, how can you?

– Cindy W.

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