Financial planning for the Audi generation

[scottish]

This is an article by a fee based financial planner.   He gets many non-mustachian clients.   I found it a fun read because it clearly illustrates the scenario most of us have avoided.   Some selected quotes

As a white-collar professional in North America you and your partner may be earning
$150,000 to $500,000 a year and never know what it feels like to have to budget money

With your bank account always full of pay cheque money, there is absolutely no need to pause
and reflect on spending. As I said, life is good. As you roll through your 40’s and 50’s with your
career advancing and you spending away, there is rarely a pause to reflect on the distant
future. After all, as long as you keep working then the money keeps rolling in and you can
keep spending, right?

Somewhere around age 50 you may wake up one Sunday morning, look at each other and
realize time is passing. The first child going to university this fall at $25,000/year. You still
have a large mortgage when your parents didn’t at this age. And Tom and Sue next door are
retiring this year – honey, where are we at with that? Bang, bang, bang, life’s three major
financial goals hit you between the eyes all at once.

And the couple walks out of my office knowing they could get to $3 million in savings for
retirement but likely won’t – they’d have to cut back the fun stuff too much today

Linky  http://www.kurtismycfo.com/eNewsletter/The%20Audi%20Generation%20and%20How%20It%20Will%20Ruin%20Retirement%20for%20Boomers.pdf

[redbird]

Good article, though what he said isn't Antimustachian. Just too many of his clients are.

This is also exactly why I'd never want to be a financial planner. Even if you try your best to help your clients with their financial situations, if they 1) are unwilling to make changes and/or 2) come to you so late in their life that it is extremely difficult to reverse any mistakes, it feels like it would be frustrating.

[Kashmani]

I read that newsletter as well. Very honest, and it does a great job of highlighting the power of normative cues.

I spent a decade in one of those "high-consuming" upper middle class professions. When everyone around you takes expensive vacations, has a big house, drives a Mercedes SUV, wears a $4,000 watch, etc., it takes a tremendous amount of discipline to be the guy in the condo with a 12-year old station wagon who only owns three suits.

Switching into government half a year ago was an eye-opener. I am now considered a big spender because I bought by bike new instead of building it from parts and I wear a $400 watch instead of a $40 one. I am still frugal, but it is just so much easier when the normative cues around you match your value system. I am no longer wasting a bunch of valuable willpower resisting high-consumption normative cues every single day.

I would expect that a lot of upper middle class $250,000 a year folks simply never have particularly deep interactions with anyone who is not like them. That makes it hard to gain the perspective that the high-consumption lifestyle is entirely voluntary, unless one consciously focuses on it.

[bacchi]

It could use some editing but it's a good article. He does sound bitter. As redbird noted, he's probably frustrated that he gives good advice but most of his clients ignore him and continue on buying shit for happiness.

[scottish]

I'm always amazed at the amount of money my colleagues spend on stuff.   I remember being aghast at the price of a new car (I think it was an Altima at $25K in the '90s), but the people I worked with didn't think twice.

And it's worse now that I work with more senior people.    Most of them drive BMWs at the same time they complain they won't be able to retire.    Luxury vacations on cruise ships.   Second homes.   $800 winter coats.   

Once at lunch I commented that my truck was 13 years old and I might have to buy a replacement in a few years.   Everyone was encouraging me to go and buy a new truck on the weekend.    Aiyiyi. 

[Just Joe]

I kind of enjoy the cultural confusion our old cars cause to the people around us. Are we poor or cheap or something else?

We'd much rather be the "poor" millionaires.

[JHoward]

They are more likely to invest in marijuana penny stocks tomorrow looking for a ten-bagger stock than they are to save 20% of their pay cheques and have a common sense financial plan that reflects their goals and resources.

Is this an idiom that I've missed out on or can you really buy stock in weed in Canada?

[PizzaSteve]

They are more likely to invest in marijuana penny stocks tomorrow looking for a ten-bagger stock than they are to save 20% of their pay cheques and have a common sense financial plan that reflects their goals and resources.

Is this an idiom that I've missed out on or can you really buy stock in weed in Canada?

Legalised weed stock is genuinely a hit item this year.   Canada has a long history of penny stock boom bust cycles (as does the US for that matter, who are many of the speculators).

[marty998]

Marijuana stocks have been the best "asset class" globally this year by a very long margin.

One stock in Australia was a 36 bagger if I recall correctly.

[A Definite Beta Guy]

Sent this to my wife with a big, bolded "I do not want to be in this position!"

Sadly, we have a few close friends this describes to a T. Both just purchased massive homes, larger than they will ever need, and exceeded their original budgets by $100,000+. They both require multiple luxury vacations a year, and both have very high living standards that require dining out several times per week.

Thankfully, they aren't car crazy...but I doubt they are saving up enough to fund their lavish lifestyles in retirement. So far their parents have helped them out a lot, as the parents are independently wealthy, but the kids just aren't in the same financial spot.

[ysette9]

I read about this an intellectually I know it exists, but we don't live in a bubble with people who live like this. I am profoundly grateful that we don't have to burn energy resisting a consumerist crowd around us.

I moved to a new role late last year and the lady who sits near me buys lunch pretty much every day. Sure, I'm sure she can afford it since most people here earn in the $100k-$200k range, but it stands out because she is such an outlier. It's more likely that someone around me brings a lunch from home, and that is only partially because the cafeteria in the building SUCKS.

It must be so sad to arrive at age 50 and be facing the choices described in this newsletter. I can understand the frustration of the financial advisor who has the tools to help people succeed but sees them choose otherwise.

[Car Jack]

I read that newsletter as well. Very honest, and it does a great job of highlighting the power of normative cues.

I spent a decade in one of those "high-consuming" upper middle class professions. When everyone around you takes expensive vacations, has a big house, drives a Mercedes SUV, wears a $4,000 watch, etc., it takes a tremendous amount of discipline to be the guy in the condo with a 12-year old station wagon who only owns three suits.

Switching into government half a year ago was an eye-opener. I am now considered a big spender because I bought by bike new instead of building it from parts and I wear a $400 watch instead of a $40 one. I am still frugal, but it is just so much easier when the normative cues around you match your value system. I am no longer wasting a bunch of valuable willpower resisting high-consumption normative cues every single day.

I would expect that a lot of upper middle class $250,000 a year folks simply never have particularly deep interactions with anyone who is not like them. That makes it hard to gain the perspective that the high-consumption lifestyle is entirely voluntary, unless one consciously focuses on it.

You wear a $400 watch?

Don't you have a cell phone?  I used to sort of collect unusual watches.  I realized last year that I had not worn one in 10 years.  Kept a 1963 Longines that I inherited from my dad and eBay'd the rest.  It was at the beginning of my decluttering phase.

[Goldielocks]

I read that newsletter as well. Very honest, and it does a great job of highlighting the power of normative cues.

I spent a decade in one of those "high-consuming" upper middle class professions. When everyone around you takes expensive vacations, has a big house, drives a Mercedes SUV, wears a $4,000 watch, etc., it takes a tremendous amount of discipline to be the guy in the condo with a 12-year old station wagon who only owns three suits.

Switching into government half a year ago was an eye-opener. I am now considered a big spender because I bought by bike new instead of building it from parts and I wear a $400 watch instead of a $40 one. I am still frugal, but it is just so much easier when the normative cues around you match your value system. I am no longer wasting a bunch of valuable willpower resisting high-consumption normative cues every single day.

I would expect that a lot of upper middle class $250,000 a year folks simply never have particularly deep interactions with anyone who is not like them. That makes it hard to gain the perspective that the high-consumption lifestyle is entirely voluntary, unless one consciously focuses on it.

You said this so well.

This is the powerful message that I got from reading Millionaire Mind (Stanley), and then re-reading it later, the "Economic patient outcare", (which inflates our childrens' expectations of normal), and the driving idea that if you move into a neighborhood where you will be in the top 10% of richest folks, you will find the secret to feeling rich, while keeping your money.

[Goldielocks]

They are more likely to invest in marijuana penny stocks tomorrow looking for a ten-bagger stock than they are to save 20% of their pay cheques and have a common sense financial plan that reflects their goals and resources.

Is this an idiom that I've missed out on or can you really buy stock in weed in Canada?

Here is the kicker -- I believe Shoppers Drug Mart applied for a distribution / warehouse/ home sales mailing type of license, and you can definitely buy shares of Loblaws on the stock exchange.   They haven't started yet, but put in the application to corner the private market, if it takes off.   (Note -- I may have mis remembered the chain, but it was a large retail chain)

[LadyMuMu]

Interesting article. All the typos and grammar errors make me cringe though. If you're putting out a professional piece, get someone to proofread first!

[Fomerly known as something]

I read that newsletter as well. Very honest, and it does a great job of highlighting the power of normative cues.

I spent a decade in one of those "high-consuming" upper middle class professions. When everyone around you takes expensive vacations, has a big house, drives a Mercedes SUV, wears a $4,000 watch, etc., it takes a tremendous amount of discipline to be the guy in the condo with a 12-year old station wagon who only owns three suits.

Switching into government half a year ago was an eye-opener. I am now considered a big spender because I bought by bike new instead of building it from parts and I wear a $400 watch instead of a $40 one. I am still frugal, but it is just so much easier when the normative cues around you match your value system. I am no longer wasting a bunch of valuable willpower resisting high-consumption normative cues every single day.

I would expect that a lot of upper middle class $250,000 a year folks simply never have particularly deep interactions with anyone who is not like them. That makes it hard to gain the perspective that the high-consumption lifestyle is entirely voluntary, unless one consciously focuses on it.

You wear a $400 watch?

Don't you have a cell phone?  I used to sort of collect unusual watches.  I realized last year that I had not worn one in 10 years.  Kept a 1963 Longines that I inherited from my dad and eBay'd the rest.  It was at the beginning of my decluttering phase.

I hadn't worn a watch in many years until I moved to a position that doesn't allow for cell phone to be taken into work space.  A couple of months later I noticed that yes every single one of my co-workers wore a watch just like I had started too.