The folks over at Our Next Life recently posted an article entitled “The Retirement Lie.” As with most of their articles, I found that it paralleled a lot of my own ways of thinking about life – BUT, it was not the article I thought I would be reading!
When I read the title of the article, The Retirement Lie, I thought about what I would call the “soft lies” that stem from the majority of society confusing their personal consumerism with personal finance.
While personal finance is, quite often, not a socially acceptable conversation, personal consumerism is a favored topic:
- “Check out my new car!” (not said: “Which is a lease that I rolled negative equity from my last lease into…”).
- “These schools just aren’t good enough; my kids go to private school.” (not said: “I hope they get good jobs one day – I’ll need them to support me when I can’t work any longer).
- “OMG, I looooove that new sushi restaurant, I have lunch there with my Starbuck’s Posse once a week!” (not said: “I’ve had a steadily rising credit card debt for the past decade; it’s now larger than the GDP of the Republic of Nauru.”).
- “I’ll be out of the office next week – it’s our annual Hawaii trip!” (not said: “My retirement plan is to work until I’m dead”).
- “We’re putting an addition on our house! (not said: “I will never pay off this house” and “If I’m out of work for more than a month, I won’t be able to make my mortgage payment anymore”).
When I get roped into these conversations, either at work or in social situations, I always feel uncomfortable. I’m the outsider. I’m the one doing something wrong. I should be joining in to talk about private schools or my new car / gadget / house addition / exotic destination.
Here are a couple of recent examples from colleagues at work:
Colleague #1 – Husband (wife is stay-at-home mom), father of two school-age kids. Has made $90K+/year for at least the last five years, currently makes significantly more. Drives a new, high-end Ford Mustang to work every day (financed). From prior conversations, I know him to have more than $20,000 in credit card debt. Recent conversation: His current frustration is that despite having made his interest-only mortgage payments on-time for just over 10-years, he’s having trouble getting a FHA loan to upgrade to a newer, bigger house in a better area – oh yeah, with Zero down-payment.
Colleague #2 – Bachelor. Makes about $85K/year. Drives either his “top-of-the-line” (his words) Jeep Wrangler (financed) or his Chevy Corvette Stingray (leased – “it’s too expensive to finance” (again, his words)) when he comes into the office. I say “when he comes in” because, despite having two new vehicles, he is officially a Work From Home employee who comes in once or twice per month for meetings. Recent conversation: Very excited to share with everyone his “system” for rolling is credit card debts to new 0% APR cards when their intro offers are about to expire, then closing the cards. According to his system, credit cards are free money and, because he is smarter than the card companies, he shouldn’t ever have to pay it back. He currently has “somewhere” north of $30,000 across seven (7!!!) 0% APR cards.
With Colleague #1, I empathized with him and did my best to express shared frustration (since he’s clearly demonstrated he’s responsible, so why shouldn’t he be given $460K contingent upon the sale of his current home?). The whole thing felt like a lie and a waste of my time… you’ve been in an interest-only lone for over 10-years? REALLY? You may as well have rented, saved yourself the upkeep and property tax and avoided a contingency clause when you wanted to “upgrade.” Not to mention Buy a house you can afford!!! But these aren’t socially acceptable things to say to people…
With Colleague #2, I also lied and gave him the positive feedback / validation that he was looking for… Wow, you beat the credit card companies at their own game! All I could picture was a ticking-debt-bomb waiting for its opportunity to destroy his life. What happens when that debt doubles and the next 0% card doesn’t come?? Why, oh why, does a bachelor need two expensive cars??? Oh… and how do you sleep?
No one has an issue with people talking about how much money they spent (wasted) on something, but even the girl in my HR department treats me like I’m a jerk after she called me up to kindly let me know I had mistakenly set my 401(k) percentage too high and I explained “no, that’s intentional… I want max it out.” Is it just me or is there something Bizarro World about that?
I imagine Mr. and Mrs. NextLife encounter the same issue. I envision them wanting to tell all of their colleagues “No, I don’t have that fancy gadget or problems with my loans and I haven’t ate at that fancy restaurant… I do have the problem of figuring out what I’m going to do with all my free time after I retire later this year.” But, like me, I figure they probably “soft lie” by pretending to identify with them or by telling them how awesome their fancy new debt-mobile is… (turns out, they’ve got a year-old post on this very topic).
With rampant consumerism the “in” thing (what was the last rap song you heard that talked about a reasonable savings rate?) and real conversations about money being taboo, I guess I’ll just have to get used to these “soft lies” to keep us all friendly!
Am I alone here? Anyone else feel like doing right by your yourself and your family financially makes you the weirdo? Please comment below.
There’s so much in here we can relate to! And that story about HR questioning your 401(k) contributions — whoa! That’s pretty nuts. I’d say now, a year after writing that “double life” post, the double life feeling is probably even more intense than it was, but mostly because of the blog and the friends we’ve made in PF land. When dealing with friends and colleagues in real life, we’ve actually gotten better at finding responses to these kinds of crazy things that help pivot into just the slightest hint of advice without going fully judgy on people. Like with the guy trying to get the FHA loan, we might say something empathetic first and then pivot, like, “Oh, we were totally there! We had our eye on the perfect house, and it was just a bit over what the bank wanted to loan us. But you know what, we totally sleep better at night in our lower priced house that we ended up in. The bigger payments just would’ve stressed us out too much — even that killer view wouldn’t have been worth that.” Certainly not everybody wants this kind of a response, but at least then we open the door to taking a different angle, and in a few cases people actually bite. I think it helps to relate a bit (even if that’s an exaggeration) but then talk about why we’re happier having not taken the expensive option. For whatever all of that’s worth! 🙂 Soon we’ll be able to quit and then we won’t have to do this little dance at all anymore!