The visual illusion versus the hidden truth...

[MJ DeMarco]

In another thread @LightHouse posted this:

just because someone APPEARS to have wealth, doesn't mean everything they tell you is correct or you should follow them because of it.

Whenever you're stuck in traffic, take a look around you. Look at every car, from the Lexus, to the Chevy, to the Mercedes. More than likely, the car you're looking at is financed or leased. That means, more than likely, that dude in the Mercedes you *think* is rich is no different than that dude with the Chevy Malibu. They both can't afford their car, at least enough to pay cash for it.

Don't be fooled by a visual illusion when the statistics prove there is actually a hidden truth...

 

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[Rawr]

Yep...I remember when around 2008 a hustler told me, 'look around this restaurant, 4 out of 5 people here live on their credit cards'. Everyone, everyone, everyone wants illusions. We want our dreams fulfilled, acted out. When reality is bestowed upon us, the realiza.... rationalizations help. So make sure your expected outcome is VIABLE within the parameters of your world no matter the dream.

 

[Knugs]

I absolutely agree. Financing has become a big hit in Germany and the UK too. Everyone drives a new shiny mercedes and I know that people blow a considerably high % of their net salary. Why not go for a cheaper car?

For me this is totally the opposite to wealth. You blow money on a car you cant theoretically afford. Its literally asking for trouble, financial problems. They are poor in my eyes.

 

[LightHouse]

Not to mention the loan terms are stretching to incredibly long timelines. And now you can finance everything you can't fit on your maxed out credit cards, like your Bed, your TV, all your furniture, etc etc.

Imagine what the world, or the US specifically, would look like if you could only pay cash for everything but your main home.....

 

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[DrkSide]

Not to mention the loan terms are stretching to incredibly long timelines.

I heard an advertisement for one of the local car dealerships the other day. 84 month loans on a vehicle and I don't even think it had to be a used one.

With that said. I will purchase a new/used vehicle in the next year probably and it will be financed or leased. It will not be because I need to but it will be because it is so cheap to use other people money and I won't have the initial outlay of cash.

 

[masaldana2]

link of the article

http://www.consumerreports.org/cro/news/2013/09/car-financing-on-rise-loans-and-leases/index.htm

 

[TTG SS]

When I was in Scottsdale, AZ a few months ago, I was absolutely amazed by the cars driving around. Bentley's, Ferrari's, 911 Turbos, Lambo's, even saw a brand new Aventador SV. Coming from the Northeast you are lucky to see a couple exotics all summer, and it is usually limited to Gallardo's, R8's, and 458's.

After reading MJ's book, it has kind of been engraved in my head "they have a Lambo, they must have paid cash" since IMO that is the only way you should be buying one. I guess I was ignorant to the fact that there are plenty of people financing these high dollar machines and paying $3000-5000 a month for them. I even read on a Lambo forum that a sales person told a buyer that more than 80% of their sales are financed.

 

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[hellolin]

My Mom just told me she knows a colleague who was almost broke almost a year ago because he has no patient to visit his medical office, now just bought a $120k Mercedez, even though he did pay half of the car with cash, it was still a heck a lot for a car. I'd think with the last recession people would learn that if you always save for a rainy day that day might never come...but I guess not, and now Wall street can package those auto loans and spread them around the world just like they did with the mortgage...now for the smart shoppers you should prepare yourself for a pretty good deal on a used car in about 2-3 years...

 

[AndrewNC]

Not to mention the loan terms are stretching to incredibly long timelines. And now you can finance everything you can't fit on your maxed out credit cards, like your Bed, your TV, all your furniture, etc etc.

Imagine what the world, or the US specifically, would look like if you could only pay cash for everything but your main home.....

Thank you for your valuable post.

Now I can stop sleeping on the floor and finally able to afford a bed! Might as well get a new TV with it too!

 

[Bouncing Soul]

Not to mention the loan terms are stretching to incredibly long timelines. And now you can finance everything you can't fit on your maxed out credit cards, like your Bed, your TV, all your furniture, etc etc.

Imagine what the world, or the US specifically, would look like if you could only pay cash for everything but your main home.....

I think what is most remarkable about debt is how fast it happened. In my grandparents' day, they still usually didn't borrow money to buy their homes until they were older. My grandparents were volunteering at a food bank during the depths of this last recession and it was tearing my grandfather up. He said the Great Depression was easier in a lot of ways. Sure, everyone was broke, but nobody was losing their home. It was one of the most remarkable conversations about personal finance I've ever had.

 

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[JohnZ123]

I know this friend of a friend who is 25 years old that hangs out with the second generation rich. These second generation rich all have fathers at least 10+ million networth. This friend of a friend on the other hand works as a taxi driver but spends majority of his money leasing new BMW and buying Gucci clothing.

 

[mws87]

In another thread @LightHouse posted this:



Whenever you're stuck in traffic, take a look around you. Look at every car, from the Lexus, to the Chevy, to the Mercedes. More than likely, the car you're looking at is financed or leased. That means, more than likely, that dude in the Mercedes you *think* is rich is no different than that dude with the Chevy Malibu. They both can't afford their car, at least enough to pay cash for it.

Don't be fooled by a visual illusion when the statistics prove there is actually a hidden truth...

View attachment 11425

Reminds me of an old manager I had preaching to and lecturing me about "making money" and being financially successful. "You see that AMG?" (he drove a $100k Mercedes) "That's what hard work gets you." I wasn't buying it. Come to find out, the guy was in $170k+ of debt and was financing the car for $0 down. This came to light after we asked him why he was trading his car for a base model Lexus. The shadowy guy giving advice.

 

[Buickestate]

One of the points that I took home from reading TMF is the fact that both sidewalkers and slowlaners like to fake wealth . If you were to take the time to study the people in the cars around you at that intersection, your eyes would be opened by the fact that their debts would reflect their income, higher the income higher the debt. More expensive the car, higher the debt. It's all an illusion, smoke and mirrors. These people are just one or two paychecks away form disaster, with rent/mortgage, insurance (here you can't finance a car without having it fully insured), they are trading their time for their faux lifestyles.

I like to think that most of the people on this forum who have read TMF are already doing better than 90% of the people in traffic around them. By now they should know better than to fake the fastlane by financing their mobility appliance. (I'm sorry but if your "car" can park itself, if your cup holder isn't sitting in the passenger seat next to you, then what you have is a modern a mobility appliance.)

One of my favourite subject in university was sociology, what I took home from that course is that you learn more by observing and listening to people than you will by talking. Learning to read people is a very important skill to develop. Learn to see through people's illusions. It will not only protect you, it will also help you to better help them.

Don't blindly follow a person simply since they look the part, say the right things. The guy in the Malibu might actually be the fastlaner in the traffic around you, pay attention to your surroundings.

I'm not always driving older Buick estate wagons, if the weather is nice and the mood hits me I'll take one of my Malibu Classic Coupes for a cruise.....

 

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[The-J]

With that said. I will purchase a new/used vehicle in the next year probably and it will be financed or leased. It will not be because I need to but it will be because it is so cheap to use other people money and I won't have the initial outlay of cash.

How many people of those 84.5% actually THINK this way, though?

Financing can be Fastlane. It's simple*: if the cost of the financing is lower than your expected return, you finance it and put the cash you would have paid into what will get you the return. This fits the Fastlane.

Although cash flow is on people's minds... they only care about delaying cash outflows to the point where they can max out their entire income. Can't afford a Mercedes? Well Joe makes $3000 a month, he can finance a Mercedes for like $600 a month, his rent's only $1000 a month, and his minimum payment is only $200 a month even though he drops $1100/month on clothes, nights out at the club, and steak dinners! Therefore, he can afford it and the rest of his money? F*ck it, spend it on shit too! Take a vacation to the Caribbean! Why not?

It's been said a million trillion times: this is the problem with our society. We all want it now, whatever it is. Shit's getting more expensive but interest rates are still low!

We want the tasty food, the models and bottles, the German sedans, the feeling of 'making it'. F*ck it, trade my freedom for the feeling of having made it! I don't mind being in debt for the rest of my life, I just want to live the dream!

Welcome to America.

*not always this simple cuz of risk levels and bla bla bla corporate finance 201

 

[luniac]

and if u don't fake it people make fun of you. I came to the united states from israel when i was around 10 years old. As far as i remember there was no "materialism" in our minds as kids when i lived in israel. But when i came to the united states people started noticing that i wasn't wearing nike sneakers or some shit... that i shouldn't be caught wearing payless or fabco shoes.

As i got older and ipods came out, then iphones, and everyone and their mother got them shits, i didn't get a smartphone until 2013, and it was a shitty andriod with no plan for testing my apps. A simple trackphone is all i need.

my best friend leased(or financed?) an audi a few months back, and now hes "kinda" regretting it because he could of saved that money for food or to move out... i told him not to get a car from the beginning, but of course if you're slowlane you're gonna ignore me...

With the social state of things nowadays, im actually proud of myself for never feeling peer pressured into buying into the whole "materialism" bs. The most expensive thing ive always owned was my pc video card so i could play nice games maybe my destiny was to find the fastlane all along, ha fingers crossed lol?

Same thing goes for the whole living fast in your 20's, then settling down in 30's, and having kids wife and mortgage by 40's and blah blah blah... WHO SET THIS IN STONE DAMNIT... i can't go out of friday in good conscience while my finances are in the hands of my employer, is that not logical!?!? whatever.... makes me an old fart at 25?

Not that i'm hating on owning nice shiny things, if you can afford it then go nuts! i sure plan to enjoy my money when i have more of it, but never live above my means because that leads to the sidewalk. It'll be easy for me though, i've been so poor all my life that even my 32k salary made me feel rich for awhile lol

It's not what you own that makes you who you are, it's what you think... or something?

 

[Contrarian]

I used to think like this too. Monthly outgoings < my salary and expected commission = I can afford it!

I just paid a lump sum to clear my outstanding motorcycle finance last month, which I'd originally taken out on a four year finance agreement with 0% down. If I'd waited six months to buy it in the first place, I could have paid cash and saved the 21% APR. Ironically when everything went wrong for me it ended up sitting in the garage for several months because I couldn't afford to service and insure it, but I still had to pay the finance. Never again.

It's just one more part of the greater societal entitlement disease. I was having a discussion with my friend the other night, about how even on fairly modest incomes (in a country with a much lower average standard of living than the USA) we live better than kings did 100 years ago, or even 50 years ago. My girlfriend's parents used to grow their own vegetables and make their own clothes to save money. They're slowlane millionaires now, still buying, renovating and selling houses in their 70s, and living in Spain every winter. Well earned. People don't appreciate what they have, or the opportunities available to them.

 

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[PureA]

It frustrates me on a deep level. People would rather raise their stress levels compromise there quality of life etc (payments/maxed out cards) JUST for the sole purpose of looking like you have plenty of cash.... The irony is if they weren't pretending they would actually have the cash to spare.

Forever grateful that you guys on the forum have been able to shape my mindset before I fell into this life long trap of chasing the dragon, and trying to impress people I don't care about.

 

[The-J]

I could have paid cash and saved the 21% APR.

What the F*ck? I have credit cards that have better rates than that. How is that legal?

Good on you for getting out.

 

[Almantas]

Straight-to-the-point, solid post. It's funny how many people fall pray to this Illusion of Wealth - the hidden truth of a slowlaner's life (hey, sounds like a next book title, lol).

Anyways, IMO there's no Illusion of Wealth at all - there are idiots who buy toys they WANT but... can't afford and there are other idiots who... believe everything they see is truth and never try to see between the lines of reasoning.

 

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[Contrarian]

What the F*ck? I have credit cards that have better rates than that. How is that legal?

Good on you for getting out.

As the saying goes, there's a fool born every minute!

 

[redline]

So true. Unfortunately, the banks depend on people who take loans to buy their stuff. If there wouldn't be that many stupid people, the system would crash within a few months. Watch "The Big Short", a really good movie about the subprime mortgage crisis, the result of consume debts.

 

[Lex DeVille]

Straight-to-the-point, solid post. It's funny how many people fall pray to this Illusion of Wealth - the hidden truth of a slowlaner's life (hey, sounds like a next book title, lol).

Anyways, IMO there's no Illusion of Wealth at all - there are idiots who buy toys they WANT but... can't afford and there are other idiots who... believe everything they see is truth and never try to see between the lines of reasoning.

What's funny is how many posters here are so quick to assume they are any less blind than the man who finances cars.

Half the people here would write off advice from the man who isn't wealthy because he doesn't have what they want.

How many actually question whether what the guy has to say is actually useful.

Opportunity is all around. But it won't be seen with closed eyes.

Doesn't matter if you're a "Fastlaner" "Slowlaner" or something in between.

MJ didn't say all people who finance cars or make poor choices are stupid fools.

He said pay attention so you can tell the difference between what is useful and what is not.

But this is the Fastlane forum, and conviction is a nasty beast.

It's why most of the world believes the Slowlane lie in the first place.

They believe it's the way the world works. The way life works. They believe so strongly they refuse to question it.

And here we believe the Fastlane is the right way. We believe others who don't see it our way are fools.

Very few are willing to question their own beliefs to discover the truth.

The only thing that matters is whether or not your beliefs help you achieve what you want.

Sure we can ignore a man's tip because he financed his car. But what if that tip was your ticket to wealth.

Who's the fool then?

The wise man steps beyond his own beliefs to find out what is useful in the context of his own reality.

 

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[luniac]

What's funny is how many posters here are so quick to assume they are any less blind than the man who finances cars.

Half the people here would write off advice from the man who isn't wealthy because he doesn't have what they want.

How many actually question whether what the guy has to say is actually useful.

Opportunity is all around. But it won't be seen with closed eyes.

Doesn't matter if you're a "Fastlaner" "Slowlaner" or something in between.

MJ didn't say all people who finance cars or make poor choices are stupid fools.

He said pay attention so you can tell the difference between what is useful and what is not.

But this is the Fastlane forum, and conviction is a nasty beast.

It's why most of the world believes the Slowlane lie in the first place.

They believe it's the way the world works. The way life works. They believe so strongly they refuse to question it.

And here we believe the Fastlane is the right way. We believe others who don't see it our way are fools.

Very few are willing to question their own beliefs to discover the truth.

The only thing that matters is whether or not your beliefs help you achieve what you want.

Sure we can ignore a man's tip because he financed his car. But what if that tip was your ticket to wealth.

Who's the fool then?

The wise man steps beyond his own beliefs to find out what is useful in the context of his own reality.

no slowlaner ever gave me good tips... just "ideas"...
in the context of life and money that is...

 

[Lex DeVille]

no slowlaner ever gave me good tips... just "ideas"...
in the context of life and money that is...

Ah yes, I forgot the past indicates how the future always is. My bad.

Hope you were born with everything you ever wanted in life.

Otherwise you're screwed. (Based on what your post implies.)

 

[luniac]

Ah yes, I forgot the past indicates how the future always is. My bad.

Hope you were born with everything you ever wanted in life.

Otherwise you're screwed. (Based on your reasoning. Not mine.)

lol I still listen to what people have to say before forming an opinion...

 

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[Lex DeVille]

lol I still listen to what people have to say before forming an opinion...

That's why I adjusted the parenthesis on my post.

 

[hellolin]

Ah yes, I forgot the past indicates how the future always is. My bad.

Hope you were born with everything you ever wanted in life.

Otherwise you're screwed. (Based on what your post implies.)

This is the impediment of the fixed mindset, I am reading the book "mindset" right now. I always thought that I am a fast learner that I already have a growth mindset whenever comes to the intellectual side of stuff (Because college was easy for me even with a part time internship), but after reading though the book I found that I have a lot symptoms of a fixed mindset. I think most people on this forum have a mixed mindset, since they read books like TMF and mostly are like me who is in a transition phrase where we start questioning everything we see in life.

 

[SteveO]

Don't be fooled by a visual illusion when the statistics prove there is actually a hidden truth...

@LightHouse

I think a lot of times that the people who see wealth where there isn't any are also the same people that are intimidated by others that try to show power.

 

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[LightHouse]

@LightHouse

I think a lot of times that the people who see wealth where there isn't any are also the same people that are intimidated by others that try to show power.

SteveO, I'm not super clear on what you mean. Could you elaborate please?

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Regarding the topic of this thread, the main point behind it all is don't be a follower, and don't look for directions. I try to take everything I hear as opinion, and I use it to form my own facts. Wether it be someone successful or someone who has nothing materially, it makes no difference.

This why the idea of "success" badges is the worst idea that has come across this forum, lol.

 

[SteveO]

SteveO, I'm not super clear on what you mean. Could you elaborate please?

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I just meant that the same people that usually see wealth where it is not at, also see power in individuals that attempt to persuade how powerful they are. Even if it is all a farce.