The Deceit of the Debate
Fake Rich
Every book on millionaires suggests that true wealth is built up over time. However, if you take a drive through your neighborhood, observe what the majority of people aged 21-35 are driving. Notice the cell phones in their hands as they drive, or perhaps even a gourmet coffee.
My 2006 Highlander looks invisible and bland around these late model SUVs. Can they afford that expensive shiny SUV? No, not most if we do a little research.
In nearly every "I'm Rich after Being Deceived" book, they warn you of the many pretenders. This is often because the authors themselves were such pretenders.
Because of our financial mistakes my wife and I never got to participate in this status game much. We never looked wealthy unless you think Toyota Camrys are "the ultimate driving machine".
Moving forward, it's noted that over 70 percent of credit card users are unable to pay off their balance each month, incurring substantial interest charges. This raises the question: why would anyone choose to engage with companies perceived as unscrupulous? In some views, they are likened to upscale loan sharks, though perhaps without the 'upscale' part.
It is likely not a contentious point to say that three-quarters of Americans might be considered "fake rich." This may come as a relief to those who feel they are falling behind.
At first glance, one might think we're impoverished. My wife drives a Camry that's a decade old, and I get around in a 2006 Highlander. I'm writing this blog on an ancient HP laptop that I acquired in my teaching days during the 2010s. If I disconnect it, I've got roughly 15 minutes before it shuts down with a battery warning. My gaming collection includes a Sega Genesis with games I've yet to play, an original Xbox with a similar backlog, and a PlayStation 3. I had a used PlayStation 4, but I sold it before we moved because the collection was becoming too much.
That's essentially the situation with all the things we've accumulated, yet here I am, able to blog while the baby sleeps. Meanwhile, most people have to work to maintain the facade.
My wife will need to work for approximately four more years to sustain the standard of living to which we have become accustomed. We wouldn't be in distress, but certainly, some adjustments would be necessary. The huge issue for us now is Health Insurance.
Healthcare represents a significant challenge in retirement. In the past decade, we've allocated more funds to healthcare than in all our previous years of marriage combined. We anticipate the next decade to be similar, if not more demanding. Once healthcare expenses are wrangled, retirement will become much more manageable.
The significance of housing diminishes when one can comfortably reside in a one-bedroom, one-bathroom dwelling anywhere in the nation with minimal complications. It's quite astonishing how infrequently we entertain visitors from out of town. This observation prompts me to wonder about the necessity of two additional bedrooms for everyone.
But I digress............................
Here's our journey from the illusion of wealth to the reality of impending retirement.
Debt free: This milestone is monumental. We settled our last debts around 2015 and have avoided incurring any new ones since then. Encouraged by our parents, we also paid off the mortgage. This phase was likely the most crucial in our financial journey.
Cars with cash: Purchasing cars from private sellers is now the preferred method for us, as it's often where the best deals are found. It's advisable to invest $100 in a trusted mechanic to inspect the vehicle thoroughly.
Emergency Funds: This fund has been a lifesaver—like when we needed a new roof for our townhouse four years earlier than anticipated. It's set aside for the unforeseen yet inevitable events: car collisions, appliance malfunctions, hailstorms, fires, plumbing failures, floods, physical ailments, pet illnesses, and even job layoffs. We've established a fund for nearly every conceivable situation. It may drive my wife up the wall, but in times of widespread crisis, this fund is as comforting as mink.
Invest: We fully contribute to our 401K and HSA; simplicity is key. The complexity of a financial instrument equates to higher risk for us. If it's not understandable, we avoid it.
Insurance: Retirement brings many challenges, and one of the biggest is ensuring financial security. Insurance plans are crucial to prevent significant financial losses. However, the most substantial expense we face as we age is health care. Health insurance represents the final and most formidable mountain to climb. Studies indicate that an elderly individual could spend up to $300,000 on health care, even with insurance coverage. Securing robust health insurance is essential.
The "fake rich" often prioritize possessions. With an extra $600,000, one could purchase a luxurious house or a flashy car, yet the question remains: who will take care of our healthcare expenses? It's clear why this is a contentious issue.
How we know when we are no longer "fake rich"? Priorities shift.
Here are a few unmistakable indicators for us. If my wife were to come home today and say that a truck had ripped off the front end of the Camry, my primary concern would be her well-being. I would insist on her being thoroughly examined by a doctor first. In this blog, we will discuss insurance extensively. A serious health crisis could quickly lead to bankruptcy. Interestingly, I never considered health insurance seriously until I reached my late forties.
Regarding the cars, we have the cash ready to purchase another Camry. Moreover, if someone were to inform me that our Highlander has been damaged, we have the funds to travel to any location, acquire a replacement with comparable mileage, and drive it back home as if nothing occurred. It's not a significant issue anymore. Car insurance is nice and all, but we've learned some hard lessons in that area.
If houses, cars and stuff are second thoughts, you've probably moved beyond the "fake rich" crowd. We need to move from accumulating funds to distributing funds in retirement. If there are no funds to distribute.......................well, there's your answer.
I'm tired............................
The Warped Perception of Status
Let's examine this flawed logic. We must break this cycle of thinking, or we will face painful consequences. A decade ago, the 2005-2006 Toyota Highlander Limited and its Hybrid variant were the most reliable SUVs available. And they still hold that reputation. On Cars.com, a 2006 Toyota Highlander Limited is listed with a reliability score of 4.9 out of 5.0. Interestingly, a newer 4Runner also holds a reliability score of 4.9 out of 5 on the same site. Understand that the 1st Generation Highlander still holds this high score, and scores typically drop as cars age. Will the 4Runner maintain this high score? We don't have a crystal ball.
Furthermore, My Car Angel and Scotty Kilmer on YouTube state that, "in my opinion these are some of the best Japanese cars ever built," and "these things run forever, I've seen them with 400 to 500 thousand miles". And so far, both YouTubers have been dead accurate.
So much for leveling up in vehicle, eh? Only in the status seekers mind.
The 4Runner is more than an SUV; it's essentially a truck with comparable fuel efficiency. It's designed for the serious off-roader who prefers cruising around the campsite over just reaching it. In contrast, the Highlander navigates effortlessly, ideal for urban dwellers like us. It's akin to a lifted Toyota Camry, offering all the associated benefits, which is just what we need.
The latest Highlander model features a turbocharged four-cylinder engine. Historically, turbocharged cars have had less reliability. To add to the concerns, Highlanders are no longer manufactured in Japan, which, in my experience, makes a noticeable difference. https://tfarabees.blogspot.com/2024/04/how-long-will-my-toyota-last.htm
When we are cycling in a distorted view of status, logical explanations like the ones above are unwelcome. They bounce right off as we spin. We just sense that something is amiss and believe it won't be resolved until there is money spent. If not, this sense of depression will persist like a burr in our saddle.
The status issue plagues the insecure. And most of us have insecurities. We think friends, family, and neighbors will notice and be impressed with our whatever. A few shallow people might be impressed, but not as much as we like to think. They are thinking more of their whatever.
I'm sorry to 'rain on the parade' of why most Americans get happy buying something new. But most people don't really notice or care what we drive from point A to point B. Most modern cars come with a lot of luxuries like air-conditioning, sophisticated electronic gadgets including a kicking stereo, and on and on. And does it take a huge salary to get these gadgets anymore? Nope. Just a ball point pen.
Indeed, it's said that over 70 percent of those driving expensive vehicles are merely posing. In Texas, there's a saying for this: "Big Hat, No Cattle." Recently, I encountered a young man in a parking lot climbing into an enormous, glossy black hyper-diesel truck. It seemed lifted too high to be of any good hauling use. Curious, I inquired, "How can you afford such a vehicle?" He replied with a grin, "The bank says I can," before speeding off with the roar of a drag racer.
What are our real needs? This blogger has discovered that there are some real needs in this world, just not the ones indoctrinated into the American mindset. And they are very affordable.
At this moment, I understand that every individual requires hope, love, oxygen, water, food, clothing, and protection from the elements. According to the Bible, to achieve contentment, we need only strive to secure the latter four necessities. The first three are provided by God, even to those who are atheistic. In America, access to clean drinking water and affordable food does not require much work.
In fact, people consume strange gross food in this country, despite having the financial means to choose healthier options. That's why we have hot dogs and McDonalds. Yuck!
Here is what I interpret when someone says that "The American Dream is Over!" or it's Unaffordable to live in America now!"
I'll use myself as an example. Ready?
As a retired schoolteacher residing in Northwest Montana, I'm finding the cost of living increasingly prohibitive. Cabins on the lake, a mere five minutes from my home, are priced in the millions. At the local Toyota dealer, a new 4Runner is listed at around $50,000. Nearby, a ranch is on the market for 6 million dollars. Consequently, we've had to significantly reduce dining out. On average, a meal at Montana Club, Famous Dave's Barbecue, or Hu Hot Mongolian Grill costs us about 70 dollars each time.
What happened to the American Dream?
Oh, the untold suffering, eh?
That's what I hear from ads and people with a 'warped perspective of status'. They will almost always continue to struggle financially. We'll talk about slow and steady gains in this blog.
I hope I communicated effectively the last few days. It's been hard to concentrate. My adorable grandson has a virus or something. Bless his sweet little heart. The last time I got blasted by a baby was 1994.
I'm tired......................................need to take a shower.
The Education Deception
What is Social Security?
The End of the World Deception
The Safety Deception
Also, there are a lot of distracted drivers out there. This man lives in La La land. This scenario plays out every day with folks lying in their own pool of blood.
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