by: Pash Brar
This is a real-life story of someone I know. Him and his wife are turning 70 within a few months and retired. Or so I thought. I recently went to visit them in Arizona, where they had moved for retirement two years ago and was quite shocked to see how they were living. It reminded me of my father confronting my former brother-in-law in 1993. I had overheard my dad lecturing him. The brother-in-law was crying as I heard my dad calmly say things like, “You are behind in life. Your parents are behind in life. You have no money and earn less money than my daughter.” As my dad continued his lecture that day what he meant by “behind in life” was that my ex-brother-in-laws parents’ home was not paid off when they were well in to their 60’s and now here their son was unable to earn a down payment to purchase a home in his 30’s. My dad built a large home in 1981. He already owned the lot and there was never a mortgage on that house to this day. His ideal is to have everything paid off as early as possible.
The people in Arizona spent a lot of money. I noticed they made a brand-new dinner each night. I have no idea where those leftovers went because I did not see the leftovers ever again. It was wasted. I also saw them throw lots of food out from the fridge. They were constantly buying things in the stores and spent so much money on themselves. I was quickly adding up totals in my head throughout this visit.
The wife was an alcoholic. How do I know? She drank a bottle of wine each and every night. She ordered multiple drinks at restaurants, and they ate out a lot. Lunch in my opinion shouldn’t be more than $15-20. Her bill was $50+ with the drinks added in. There wasn’t a day she didn’t drink. Drinks cost a lot of money.
They shopped in a very expensive grocery store. This store had a Rolls Royce, a Bentley, a Porsche, multiple 7 series BMW’s, S class Mercedes and a brand-new Nissan NSX in the parking lot all at the same time. I saw the prices and they were much higher than the other grocery stores in the area. The exact same products could be bought for much less just a few minutes away.
The Ford F-150 they drove was not paid. It was on payments. He changes vehicles every 2-3 years. He keeps getting a brand-new truck and losing a lot of money on the depreciation of it. He also had all the latest gadgets, including the newest model Apple iPhone, iPad, Apple watches, huge new TV, surround sound and Microsoft Surface computer.
Their two children live in other states. The family all see each other at least 6 times a year with each of the family taking flights and the parents paying for the flights, even though the kids are in their 30’s. I have family in France and Australia and only get to see them every few years.
When this couple moved for retirement, their original home sold for almost $900,000. The home in Arizona cost less than $400,000. The home in Arizona has a large mortgage. I asked how is this possible? How can the new house not be paid in full? Apparently, the previous house had two mortgages on it, and they had very little equity. Also, the couple has no life insurance. So, if one of them is to pass away, the other will most likely not be able to keep the house because they won’t qualify for the mortgage alone.
As I watched this couple spend and spend, I finally told the husband: “You’re spending well in excess of $100,000 a year on crap.” He didn’t deny it but blamed the wife, saying “she’s not in touch with reality.” Reality is BOTH are out of touch. In fact, we had to go enquire about the husband going back to work because they are running out of money. Can you imagine going back to work at age 70 because you NEED the money? I was completely shocked. They are living way beyond their means and as my dad says, “behind in life” because my dad believes certain milestones should be reached by a set age.
I am sharing this real example because I believe we can all learn from these people. If you are planning to retire, I would hope after working for a lifetime you can live off a pension and savings worry free. I hope you don’t spend money on things you don’t need or keep buying the newest things unless you have the money to do so. I hope you will drink only socially and only travel if you can afford it. I hope you can leave a home, savings, or life insurance to your kids instead of debt. But most of all, I hope you don’t have to go back to work at age 70 because you have no money. I saw where the money was spent and shook my head at these people. The apple doesn’t fall far from the tree because they just paid for a plane ticket for their 35-year-old child to visit because she also has no money. Her money is spent mostly on alcohol as well, she doesn’t own a car, has no savings, no life insurance and will never qualify for it, or own a home. She works full time. Again, as my dad says, the child learned from the parent and is behind in life just like the parents. I may sound harsh, but am I false in thinking that the dream is to be comfortable and not worry about money when we retire?
Living beyond your means is a serious issue. It’s not just this couple, but it’s in many homes. I see it when I pull credit on people every day. That giant few million-dollar house with the Range Rover and BMW in the driveway are not paid for, so who are you trying to impress with your huge debt? My dad’s old school ways of spending only when you must, aiming to pay your home off by age 50 or less, keeping cars until they need replacing, and only travelling every few years seems to have worked for him. If you want to spend freely, then have the drive now to save and invest while you’re still working, so when you do retire there is no fear of running out of money. The biggest thing I noticed about the real-life couple in Arizona is that summer is here, and they’re still in Arizona. The rest of the neighbors all leave the excruciating summer heat because they have multiple homes elsewhere and lots of money. This is the most obvious indicator of living beyond their means because they’re the only one’s left behind. Left behind in the neighborhood and left behind in life.
