I hoped the title of this article would grab your attention because it is really about you and your neighbors. This article is about you and your friends from college. It is about you and your family members. It is about time that we all say enough is enough and drop that front we are all putting up about how we can keep up with the rich and famous. That we can keep up with what our neighbor's are doing with these lavish kitchens, movie rooms, and fancy backyards. That we can match everything that all of our college friends are doing financially. The modern day rich and famous have led many people in mainstream America down the path of struggling and not so famous. Yet, we hide behind our egos just to make sure nobody knows the real situation.
I get the luxury of seeing hundreds of financial cases every year which is why I wanted to write this article. Among people in Generation X (those born between 1964 and 1979), I continue to see a pattern that we have to put the brakes on before we crash into the wall.
Many of these Gen X'ers got college educated and thrown into working for some type of large corporation right out of college. They worked for Fortune 500 companies in financial services, technology, and health care rising through the ranks into management and vice president positions. These companies paid them handsomely soaring incomes not only into the six figures, but many into the $200,000 to $400,000 range of income. They lured them into the good life with fancy vacations, stock options, and expensive dinners at the finest restaurants.
These levels of incomes have created a lifestyle for this generation. The mini McMansion in the suburbs, the country club membership, the fancy destination getaways at the nicest hotels, eating out four times a week, and buying all of the latest gadgets and brand names to have the 'life' of the rich and famous. Why? Because it seems like everyone is doing it around us so why shouldn't you be able to do it as well. You work hard. You make good money. You should be able to have it all. That is what you say to yourself based upon what you see on television and what is going on around you.
Look, the reality is people around you simply aren't doing it and you don't see their bank accounts, 401k statements, or what they have saved for their kid's college education. If you did, you would be frightened by the averages of what you would see on paper. The reality is that once people taste the good life, it's hard to go back to the simple life. The pressure that is amounting in Generation X hasn't been written about widely, but you will see it coming over the next five years as income, expenses, and debt all collide like you are seeing with our federal Government today.
Here's the practical advice for the people living the lifestyles of the rich and famous. The main flaw in your thinking is that the income level you are making now must continue in perpetuity. I'm here to tell you it can't and it won't forever. Somewhere along the way you'll hit a dip, a patch, or a gap that will put a dent in your lifestyle. If you don't plan prudently, your neighbors, work colleagues, and others simply won't be able to bail you out.
There is a famous saying that says there is no I in TEAM. Michael Jordan followed up that quote by saying, "but there is I in WIN". The way you win in this game to realize the people around you are doing what they shouldn't be doing which is spending all or most of what they make. They have a lot of stuff but not the stuff that counts. Be prudent and enjoy a few tastes of the good life and as my first boss said to me, "bank like a bunny" because you won't make hay forever. Real security comes from what you have in the bank not from who you owe.
Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc
oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice and Smart Money Moves to the X and Y Generation.
Phone 1.800.355.9318 or 770.777.0427
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