Below One's Means

Wifey and I have always been on the same page about finances:  we live very well within our means.  When I met her, she was 26 and paid off her credit card bill monthly. I didn't HAVE a credit card.  For the first years of our marriage, we made conservative choices -- we could have afforded a first house of up to $125K, but chose one for $86K.  We bought Mazdas when our friends were getting their first BMWs...One minor argument we had was over a car: Wifey wanted a Mazda RX7, because she loved the hidden headlights, and I convinced her to settle for the much cheaper Nissan Pulsar, which turned out to be the one Japanese car we ever owned that was a piece of crap.

As the years went on, we became very fortunate, financially. The big change came in 1992 -- I made a huge fee on a case I brought in, and the homeowner's insurance paid us off extremely handsomely after Hurricane Andrew.  D2 was  born in 1992 -- I like to think she brought us the financial luck.

We're blessed to live very, very nicely, but still buy far less than we could.  I lease a car -- a Lexus, and really prefer the 400 series. But the monthly price tag is now close to $1000 -- the smaller 300 for just about half that amount suits me very well.

Today I got a call from a business acquaintance -- someone who consults with our firm. He has made a very, very nice living over the years, and has decided to move to North Florida.  He has his house sold at a nice profit, and wanted to buy a new one worth about the same. I have to think that a $1M house in Miami equals a palace up near the Georgia line, but the man's wife wasn't having it -- she fell in love with a $2M place.

The couple believes they will inherit a lot of money when an ailing relative dies -- and the man said he was "freaking out" because the bank wouldn't approve him for the jumbo mortgage he needed to buy his wife's dream house. Would I consider a bridge loan to let them make the purchase -- to be paid out of their inheritance.

I would not, I quickly told him. In the first place, I will never loan money to friends or family again. If I can make a gift, and choose to, I shall, but no loans.  Secondly -- I believe strongly in living well below my means -- the last thing I would ever do is loan someone money to live above theirs.

The fellow understood.  His wife was raised very wealthy, and he has spent three decades trying to make her feel she didn't "marry down" since he has no college degree.  His wife is apparently driving him crazy -- she "dreams" about the new $2M place. 

Maybe, I told him, he ought to tell his wife he doesn't want to take away her dreams...if they have to rough it for awhile in the little $1M cottage, she can continue to aspire to greatness.

I wish him well as he enters the new stage of his life.  Our conversation ended with him asking me whether I thought about moving to North Florida.  I chuckled -- if I couldn't live in Miami-Dade, or possibly Monroe County, I wouldn't live in Florida.

But hey -- to each his own, whether they can afford it or not...