“How is it possible?” “How do they do it? “Am I doing something wrong?” These are just a few of the questions and comments I hear from people when we talk about how their financial lifestyle compares to others. Financial envy isn’t new, but social media seems to have exacerbated the situation and left many wondering how others can afford things like a luxury home, high-performance car or boat, a holiday home or an exotic family vacation.
As a lifelong financial professional, I’ve had a front-row seat to how and why this happens and thought it was time to share some of the secrets behind what I call the mirage of silver. As you know, a mirage is an optical illusion caused by atmospheric conditions, such as the appearance of a body of water in a desert or on a hot road.
In the financial world, a financial mirage is an illusion caused by external conditions that make a person’s personal finances look better than they really are. Let me give you one of my favorite examples.
Also see: My wife and I are in our 50s with $300,000 in a 401(k) and $700,000 in a pension. Will we have enough to “live a simple life” in retirement?
How can this guy afford all this?
Imagine for a moment that you are enjoying a good breakfast at a local restaurant. You are caught up in food and conversation when you hear the rumble of a new Corvette as it pulls into the parking spot right outside your window.
When the driver gets out of the car, you realize it’s someone you went to high school with years ago. You’re impressed and hop on social media to quickly search for it and find a personal profile with photos of a lake house, jet skis and overseas vacations.
You can’t help but wonder how he can afford all this – and why you don’t enjoy the same fruits of labor since you have a good job, save regularly and have little or no debt.
On the surface, this person looks like a multi-millionaire who leads an ideal life of leisure. But here’s what you don’t know. It’s not his house, it’s his in-laws. He drives this car and has a nice boat because his wife works two jobs to support his hobbies and his teenage reputation.
To top it off, the other family members don’t come around much because they feel like he’s taking advantage of their parents.
Don’t miss: Three things to worry about when you retire – your future self will thank you
Behind the Facebook façade
You can quickly see how he created this silver mirage. It has zero mortgage payments, which makes owning a high-performance car and boat very affordable. With most of his income spent on toys, he has little to no savings and, as you might expect, he and his wife frequently argue over money and pegging. the debt that weighs them down. It’s a fragile life teetering on the verge of complete collapse.
In another situation, you see a friend on social media posting a very expensive kitchen renovation. The materials are top of the line and the attention to detail is impressive. You’ve dreamed of a similar remodel, but you think a six-figure kitchen remodel isn’t practical, let alone possible.
What you don’t know is that their grandmother just died and left them an inheritance that was supposed to help support them for years to come. However, they chose to throw everything into the kitchen, where they spent some precious time with her.
This example is important because in this situation they have created a narrative that says they are wealthy enough to afford such an overhaul, but that does not mean the rest of their life and home is in the same shape. They may have made the very emotional decision to honor Grandma with the new kitchen, but they still have car loans, credit card debt, and no idea how they’re going to pay college for their three children.
Lily: No matter your age, here’s how to know if your finances are on track
A simple exercise to appreciate what you have
I could go on and on with examples, but you understand there is usually more to the story than what someone presents in a series of posts. It’s also important to point out that not all financial success or accolades have a dirty or ugly secret behind them, only that when you’re hot and thirsty for more in life, it’s easy for someone’s online oasis. another to deceive you.
Also see: What can pensioners do against inflation?
Therefore, it is important to establish your own financial values, goals and definitions to help guide the many financial decisions you will need to make throughout your life. When we have realistic expectations, healthy boundaries, and a clear vision of what we want our financial life to look like, we’re less likely to be disappointed in what others are doing.
To keep your perspective, consider these steps:
Write down three financial successes that you are proud to have accomplished.
Write down three financial failures that you have experienced and do not want to experience again.
Now take both lists and write down the reason why you ended up in each situation. Be sure to include the thoughts, feelings, and behaviors you experienced.
This is a valuable exercise because what you will discover is that you already know how to be financially successful and you don’t need a lake house, a boat, a fancy car or a six-figure kitchen to feel happy and fulfilled. You just need to focus more on cultivating the same thoughts, feelings, and behaviors that helped you succeed rather than wasting time comparing yourself to others or wondering how they seem to have it all because that’s usually a financial mirage.
Robert Laura is a bestselling author, nationally syndicated columnist, and founder of the Retirement Coaches Association and RetirementProject.org. He is a seasoned speaker and trainer as well as a pioneer of “The New Era Of Retirement” which focuses on the non-financial aspects of life after work. He can be contacted at [email protected].
This article is reproduced with permission from NextAvenue.org© 2022 Twin Cities Public Television, Inc. All rights reserved.
More from Next Avenue: