Upward mobility - it seemed to be on every body's mind a few years ago. It wasn't very long ago that a McMansion seemed to be THE American dream - and, for some people, only luxury would do. According to an article I was reading today, that's so 2005. The homes we live in, the cars we drive - did this really make us the people we are today? Perhaps many of us couldn't really afford our former lifestyles and today's economy is a true test of that. Those who have been able to maintain it all through tough times will surely have less left now for retirement. It's a whole different environment today and the reality is that none of us will ever probably be as financially secure as we had once imagined.
Living above our means and being pretentious all these years, what did it do for us? Did it help us forget the modest lifestyles we came from? Did it help us erase the poverty we were born into? Do you know what might have triggered you? For me, my own upward mobility came from trying to tap into a part of my privileged childhood that my parents had to put on hold once my father lost his job and found himself extremely over-qualified in his field and having to settle for mediocre pay by the time he was 50 years old. I was about 10 at the time - when they stopped sending men to the moon. That's what dad did best as a highly qualified electrical engineer working in the aeronautical industry. I remember the beautiful homes we had lived in and how I felt like a princess before my parents downsized to a modest ranch when I was in junior high school.
I'm not sure I ever saw it happening in myself as an adult. But, perhaps the pretense of having it all many years later made me feel less insecure as an adult. It didn't help that my modest lifestyle as a teenager was still an impressive one compared to my husband's upbringing. Together, we strived to achieve as much as possible and to better our lives. And, I know we were not alone. We were surrounded by a generation of baby boomers who had to have it all - and all for different reasons. But, I suspect it was all about feeding our egos. It seems most people I know live far better off than their own parents did. I even wonder now what message did our baby boomer generation send to the children we were raising at the time. This is a materialistic society which we created for them, as we were trying to achieve our own Yuppy status. Do I want my children to live happy and carefree lives as adults? I prefer to know that even with all their college education behind them, that my kids can afford to live happily, comfortably and carefree lifestyles without having to be workaholics and missing out on great life experiences because they have huge homes to maintain and are driving expensive cars? Heck no. That's not what life is REALLY all about.
As we became young urban professionals, many of us didn't even think twice about paying $4 for a cup of Starbucks coffee? And, now here we are today. As I get closer and closer to being issued that AARP card, I must wake up each morning wishing I had a dollar in my retirement account for every cup of Starbucks I've ever sipped. Do I have regrets? You bet.
And, all those years, I kept dreaming about a bigger and better house. What was I thinking? We've owned five homes - each bigger and better than the last. Now? Would you be surprised to know that a recent poll shows that the biggest white elephant of the 2000's is the McMansion.
Most shameful financial fantasy? - "The Secret"- the mega best seller which people insist was a way to think yourself to financial wealth (personally, I'm not surprised). At least I didn't fall for that. I can proudly admit I did not read it.
Yes, this article below sums it up and tells about these and other regrets many of us have today - and it actually inspired me to write this post.
Are you living today for something that is so 2005? Will you continue to strive to have it all? Or, will you resign to being modest and humble? - I am doing just that.
What other lifestyle fads are fading away? While thinking materialistically over the years, do baby boomers regret cash-out financing and how it allowed us to use our home equity to purchase new cars, take resort vacations, and pay off credit cards which helped fund extravagant lifestyles? Using home equity to pay for upgrades, swimming pools, home additions - didn't this concept ultimately reduce most people's net worth? Surprisingly, the above article touches on many real estate related mistakes.
Our society is now transitioning from dreaming and wanting for the lavish lifestyle to the reality of living modestly. I find that it has had a humbling experience on me. In fact, I am really okay about it. Perhaps it's because I lived my adult life as a parent striving for the best and always wanting more - for myself and my children, and had I not - things might have been different. If in the end, I might have only achieved two thirds of what I set out to accomplish, I will at least remind myself that I never anticipated hobnobbing with the jet-setters either. My goals were somewhat realistic.
What have I learned? What if I never achieve all that I set out for? Well, I am still the same person. As I get older, I realize it's all about all the fine qualities I project from the inside out that make me who I am today. It's not about material things - those only made me feel good about myself and usually the effect was only temporary. Nothing I was able to buy made me who I am today. My own drive, determination, focus and self-motivation got in the way of finding out that there is more to me than meets the eye. The house I live in or the car I drive, it has nothing to do with who I really am. I can't take it all back. Those $4 coffees are a thing of the past. I've watched my retirement account shrink. My big home is worth less than it was a few years ago. But, it's not about net worth. It's our own self worth which really matters more. On judgment day that is all that will matter. After all the disappointment of having to give up so much and settle for a modest lifestyle, my father once told me that it's not all about being the richest person in the cemetery. He is physically challenged today, but still a very wise man.
That was always the problem . . . people associating their personal value with 'stuff'.
Great Post.... I guess I may be lucky in the since that in the 90's I lived as a single mom with 2 kids and no child support. Money was tight but we did ok. I hit it big in 1998 in my field and made really good money but kept that single mom mentality. When I finally married after 13 years of being that single mom the mindset stayed with me.
I started real estate in 2003 and hit the ground running. I made over $125,000 in GCI my first year (in an area where the average home price is $140,000). My office manager when I first started asked me one day if I would do this $50.00 BPO for a bank. No one else in the office would for that measly amount of money. I didn't look at it as $50... I looked at it as (1) my water bill and (2) a way to learn the market better. Even as I made the $125K in GCI I continued to do the BPO's... One I would see as dinner out, One I would see as a Utility Bill, One I would see as Groceries or One I would see as more money in savings... even though I was making good money without them. I had a different mindset about them and I really did learn how to price and know my area better than some agents that had been here for years.
Now six years later and so many agents are begging for those "stupid, waste of time things". I sometimes think it is funny how things that were beneath you before are not so anymore... I still do them and I actually still do really well in real estate. I am one of the blessed ones I know.
I never had that mindset of being the super yuppy... I always had the mindset of being a single mom. Maybe we should all live that way.
[One I would see as dinner out, One I would see as a Utility Bill, One I would see as Groceries or One I would see as more money in savings]
That is so smart, Ursula! We always call 'little deals' 'beer money' even though I prefer tequila (hee) but they're the ones that keep the lights on in between the big ones.
We did the same thing - when the market was great, we kept the smaller house and didn't max out the equity. What goes up will come down. When market was way down, we were OK because we lived within our means.
It always amazed me to hear clients talk about the appreciation on their homes as if it would go on forever . . . despite my reminders to be sensible.
Great post Carol, a few years ago I read "The Millionaire next door" [by Thomas J. Stanley and William D. Danko] and what I learned was that most self made millionaires did not show their wealth, not all drove BMWs and Mercedes, surprisingly the most popular vehicle for millionaires was the ford F150 pickup. Their choice of homes where in established middle to upper middle class neighborhoods. And most of the time they preferred to send their kids to public schools.
A lot of people have equated a large car payment and a large mortgage with wealth; that is a mistake. We need to get back to the basic rules.
Live below your means
Save, invest, re-invest
Use credit to buy assets [mortgage] not for consumer items.
Again, great post; thank you.
Carol, if you read my blogs you know I believe in abundance and not settling but primarily abundance of the heart. Love is where it is at. You do outgrow things over time and I sense you are crossing that line in life from success to significance. Success can be a been there done that state, and maybe it is in your rear view mirror now and you are focusing on significance. I know I have for many years now. BTW, I saw through The Secret message too and am one of the few like you that did too.
The greatest line I heard was - Last year when we used to be rich! What were we all thinking? and half the stuff that we bought like my expensive washing machine work no better than the cheap stuff - we just bought it all because we could!
As one who grew up very poor, I've never lived lavishly. Starbucks? I always thought that coffee was too high priced for me to enjoy. More people are probably now thinking the same way.
Carol, this is a wonderful post! I think that you are speaking for a lot of us here.
I just had to include this pic . . . sorry! But your blog made me think of it . . . so I wanted to share! (Barbara's comment reminded me of this!)
Your post -- spot on! I have a very good, modest life. I lack for nothing and I want for nothing!
Love your Dad's philosophy. Mine used to say, "Gail, I've never seen an armored car following a hearse"!! I always remember that and chuckle. My Dad was all about integrity. He taught us our hand shake was our bond. I live as eithically as possible and try not to take too many short cuts for the sake of fortune or fame!
Thanks for the post. You're very lucky to not only still have your Dad but also that you appreciate his wisdom. I miss my Dad, God rest his soul :)
Great Blog! I do not regret any of the home improvements that I have made. Our house is still modest for where we live and it's important to maintain the value of your home. I do wish that I have gone to Starbuck less often and chosen cheaper cars to drive. What a waste!
Thankfully long ago we had some financial hardships that formed our lifestyle habits. Yes - I say thankfully! My kids would point to some of friends with hot cars, lavish mansions and be envious - but I knew that we had no debt and actually a greater net worth than the examples they envied. Some of these have lost their assets and "things" never made anyone truly satisfied. There can be abundance and value in a life well lived - not a life seeking more material goods!
It's just someone's opinion about the McMansion. I get the feeling that there is something else hidden behind the words here. There is nothing wrong with striving to better yourself except now many are just burned out from the process. The Secret to me is just thinking positive with postive affirmative thoughts. It's really no 'secret'. Maybe they should have called it 'the suggestion' for a better life?
Great Blog Carol.... Its crazy how so many people thought there would be no end to the GOOD TIMES. But as history has taught us, we have a very SHORT memory. We had similar GOOD TIMES during the big DOT com stock market run. Close your eyes and pick any high tech company from the stock listing and you had a WINNER. Real estate had these same GOOD TIMES and bubble bust with all the major investing speculators for Condos in the sunbelt states. Run in and put a contract on a condo. Before the condo is finished, sell off your contract for a profit... Sounds very close to the speculating during the DOT com era.
Will EVERYONE learn from our past financial mistakes? I doubt it, but maybe a few will recognize their mistakes and change from their bad financial habits to a better, more simple life.
Thanks for the blog Carol.
I used to waste a lot of money. After the failure of my last business I became a miser. Even with money in the bank I do not like to spend. We shop for discounts, we shop at Good Will for clothes and we go to Walmart. I refuse to buy a big flat screen TV, we have been given 2 very excellent older TV's that happen to be a little bulky.
I have no desire to be rich. I do want to feel secure. However, what I am finding is it is about learning to trust God. He is my security and my provision.
Oh yes! The times we live in do tend to sober us all. We are sometimes quick to rebut the unmitigated greed of our peers but find ourselves too often weighed in the balances ourselves. Difficult? Yes....but a trend that may eventually help save individuals, families, and hopefully country.
Very good reminder for all of us. My wife happens to have a very good job, and we continually remind ourselves of how blessedwe are. We love being able to give to others and help them in their life's journey.
@ Gene: I agree with you on most of your points (esp. trusting in God), but I am a big techie and have the big screen TV =)...I'm glad that yours are working out for you though!
THis post was a good one. YOu have some awesome comments here. When I got into real estate in 2005, I was selling homes to people who would have a huge payment and was like," HOW are you going to pay for this house? What do you do that you make that much!!!???" I sold homes even though I had to rent a room with my husband in our brother's house with 1 other brother, 1 roommate and their girlfriends who came and went and friends that came and went and was actually envious. I tried not to be though, since I knew we couldn't afford to purchase in that market no matter how hard we worked. And it worked out for us in 2007 when the market started dropping and we found a house in the mountains that we could afford, that worked for us.
We have put money into our house to refurbish it(built in 1925) but we have paid cash for everything that we've done and if we didn't have the cash, we didn't do it. I never read the Secret also, because to me listening to people invite you over for a Secret get together to watch the movie that would change your life, to me that sounded like a cultish bunch of new age hooey. I put my faith in God and like Chad and Gene, trust in Him for my success and my life. I am also fortunate to have a husband with a steady career to help when home sales are slower, and we have been able to bless others with the income we have by tithing and giving money to friends that we know need it more than we do. Sure, maybe I could have spent that $650 on something cool or put it into my savings, but when my friend had a newborn and whose husband spent over $3000 of their savings on drinking and partying before the birth, she needed it more than I did. God has blessed us and we wanted to share that with others.
Chad, I concur about the big screen...HAD to get one when it was that cheap at Walmart(see Gene?!)and we LOVE it. Although, we watch a lot of movies to save money on not going out (friday night is homemade pizza night) so we needed a good entertainment system. Still, saved money at Walmart!!!
Great post and a philosophy more agents need to live by.
Hi Carol,
Thanks for all the information, I am glad you can share this great information with us.
Thanks,
Deb
Just as important as not conveying to our children the attitude that success or contentment lies in the things we have is conveying to them the idea that working hard and being diligent in every area of life will yield the best rewards (which may or may not be monetary in nature). I'm glad that I got a chance to read this. Even though I'm not a baby boomer, I'm the son of one, and I see the changes that are taking place now as a result of this need to shift our priorities. It's good for all of us to embrace a simpler way of life.
I was just talking about 'the old days' when my husband and I had a retro-fitted van (that we 'remodeled' ourselves) for camping, and now people need these $50,000 monstrosities. She said that they had one of those vans too. We both agreed that we had so much fun in those 'hippie' vans, we'd rather have one of them than a de-luxe RV any day. Ahhh ... the simple life.