If you are feeling a little shameful about how you spent your money in the past, you are not alone. Welcome to the new era of "Luxury Shame".
Bye-bye, bling-bling.
Each year at this time I am reminded of the following sales pitch I used as the former owner of an auto leasing company: "Gee, don't you want to drive up to Christmas dinner in your brand new shiny Mercedes?"
This line was used by me in an effort to avoid the old "I'll just wait until after the first of the year." And it worked well.
Then.
At the end of every year, people who have a successful year often "reward" themselves with a new car. A trophy car, if you will, to let the rest of the world know, too. Justified often by: "I need this for my business image".
During those boom years, luxury quest was out in full force during the holidays. Fueled by credit cards and lines of home equity, some economists referred to this as an era of the "competitive consumer". The average Joe didn't resent the upper class as much as he aspired to BE the upper class.
When a twenty something kid buys a $500 purse instead of paying her rent, you know the train is off the track. You just weren't thinking it would be a train wreck of this magnitude.
I am reminded of other times in my life that this same anti-luxury sentiment settled right into our normally upwardly mobile mind-set.
True story: During my first years in real estate (in the 70's) it was so IN STYLE to be poor that I sewed patches on my jeans even though there were no holes in the jeans (sheesh, we were "hippies" then...).
I made a lot of money my first few years in real estate, being way too stupid and way to young to even know we were in a "downturn". I carefully hid this fact from my friends. You know, my friends who morphed into BMW driving work-a-holics with an insatiable appetite for California real estate only a decade later.
Next came the early 90's when, as the owner of the leasing company, I watched people completely lose their appetite for luxury cars. I ended up driving a succession of 3 Jaguars because NO ONE would be caught dead in a Jaguar. The value of everything luxury simply tanked, and we could not sell those cars to ANYONE.
(Recession or no, I loved those Jaguars...especally the dark charcoal one with the red leather interior. But I digress).
Although separated by a couple of decades, real estate was at a virtual stand still during both of these times when all things luxury were shunned. Not the free fall we have seen in this market, but it is predictable that when people are suffering, when people lose jobs, lose houses, lose retirement savings?
Luxury seems pretty darn stupid.
Do you see now why I was able to predict the auto bailout long before it was front page news?
My question is this: Is the party over? Will we join our depression era parents who never trusted the economy again? Will we forever be waiting for the next big depression that is just around the corner?
Will we ever want to drive a Mercedes again? Live in a McMansion? Go shopping for sport and carry a $500 purse?
And what is to become of our children who spent the first 2 decades of their lives being showered with all the excesses by their baby boomer parents? Parents who also felt guilty because Mommy went to work (when our own Mommies stayed home and cooked)?
Somewhere, deep in our collective sub-consciousness we must know this: There is an opportunity here to re-think what really matters. To bring forth an economic attitude adjustment that will set the tone for the next generation.
To understand what really matters.
Maybe we have maxed out more than just our credit cards. Maybe it will be different this time.
Let's hope so.
Written by Janet Guilbault, Mortgage Lending Specialist Based Out of the San Francisco Bay Area
Confidential to my readers and subscribers: I have missed you and I am back.
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It is time to rethink what erally matters. I'm glad I didn't get caught up in the need bigger and better to impress thing, many did.... Simply things are my biggerst pleasure. thanks for sharing you did a nicwe job on this post.