This post is 773 words, about a 4-minute read. Enjoy!
I couldn't believe it, but those four words create a ton of strife with a friend of mine. Her reaction to me asking that question was like I had just insulted her entire being and cursed the day she was born.
Back story.
I have a friend who wanted to buy a car. She needed it too. Her car was on its last legs (wheels?) and needed replacing. She was listing all the cars she wanted and dreaming about the features she would want in the car. It was exciting to go through the exercise with her. However, knowing her financial position, the cars she mentioned were not going to work for her financial position at the time. But those cars stayed on the list.
When she decided on the car she wanted, the Lexus NX-250. It would cost about $40,000, but the monthly payment would be "only" $835/month (total cost of ownership). Everyone she asked just hyped her up and told her to get it. Saying things like:
You deserve it.
You work hard, and you should reward yourself.
You just got a nice raise, enjoy it.
Here's the problem, I KNOW HER FINANCES. A $40,000 car is not something she could afford at that point in time. With all the excitement, I asked the one question that had been in the air but avoided at all costs. I pulled my friend aside and asked, "Can you afford this?"
I might as well have told her she was the worst person on earth. She got upset with me for even asking such a question.
I learned an important lesson from that experience. In these United States, asking “Can You Afford it?” is basically telling someone you're poor.
And in the US, there is no greater insult than being called poor.
We will do almost anything to ensure we don't look like “we don't have it.” It permeates every single decision we make. From the clothes we buy to the toilet paper we buy. Like, why would anyone not buy the Kirkland brand toilet paper at Costco? It's literally made in the same place as the name-brand toilet paper. However, it doesn't send the right signal to others. Using the Kirkland brand says you're basic and must not have it like that, so you gotta buy the cheaper option.
It is the same signaling we do with:
Our cars: Do you really need a massive SUV with your one passenger in the car?
The stroller parents buy
The types of stores we go to (Target vs Walmart, Publix vs Aldi)
The dishes that are used when visitors come to the house
The types of vacations we take (Disneyworld vs Six Flags, Road Trip to the local beach vs Flight to Cancun)
The things we post
The restaurants we go to
The truth is actually "having it like that" means not playing these status games. It's buying what you want and what works for you, rather than what makes you look good to everyone else.
Actually, "having it like that" is knowing your numbers. From your savings rate to your monthly expense percentages.
Actually, "having it like that" is knowing when you will have your debt paid off.
Actually, "having it like that" is knowing when you can afford something and when you cannot, and being okay with it.
Actually, "having it like that" is being brutally honest with yourself about your finances.
Actually, "having it like that" is having an emergency fund.
Actually, "having it like that" is investing regularly.
Actually, "having it like that" is knowing that you are actively saving for whatever expense you want to make. Whether it be a vacation, a new car, going to a fancy restaurant, traveling around the world, etc.
Actually, "having it like that" is not hyperventilating whenever an unexpected expense comes up. But rather having a plan of how to attack it.
Actually, "having it like that" is not allowing society to determine what you choose to do with your hard-earned money. Doing the hard work to figure out what you love and care about versus what you don’t.
Actually, “having it like that” is remembering this quote from Morgan Housel, “Wealth is what you don't see. Spending money to show people how much money you have is the fastest way to have less money.”
So, get comfortable asking yourself, “Can I afford this?”
And answering that question honestly.
It is the only way you will “Actually have it like that!”
Remember Generosity>greed!
God Bless You!
✌🏾
Recommendation Section
There is almost no writer I trust more than Morgan Housel. His ability to zoom out and think through finances and life from a 50,000 feet view is so good. He recently did a podcast on Tariffs. He provided history to give such good perspective on what is happening, My Thoughts on Tariffs, Economic History, and the Market Decline.
Callie Cox in Houdini's Law, uses the sucker punch that killed Houdini to explain why the tariff announcement is killing your portfolio. Key quote:
Often, the worst hits to your portfolio are the ones you don’t see coming—like sucker punches you didn’t have time to brace for.
We were all sucker punched, and the selloff hurt like hell. The S&P 500 recorded a punishing 10.5% drop over two days, then proceeded to swing the most since COVID. The VIX – Wall Street’s “fear gauge” – spiked to 53, among the top 1% closes for the index in history. Extreme fear, expressed through a rush for options.
Jack Raines in 28% Loaded, talks about the beauty of mid-20s and growing older. A key quote of life:
I think the key to actively “living life” is to continually optimize for what’s fun, while accepting that your definition of “fun” changes as you age. Having a good feel for what excites you at different stages of life is how to decide where to go all-in. Misunderstanding what actually excites you now and instead optimizing for what “should be” or what “used to be” fun is how we screw up.
Scott Galloway in "Earners vs Owners", perfectly explains how I think about taxes. It's not about Rich vs Poor but rather those who own things and those who don't.
Nick Maggiulli in "The Price of Peace: Why Diversification is Difficult, but Necessary" challenges the popular saying, “Concentrate to get rich, diversify to stay rich.”
Doug and Heather Boneparth in "Invest For Kids" provide the ultimate breakdown of the best investment to make for your kids, or in my case, future kids.
There are hidden costs in almost everything we choose to purchase. Doug and Heather Boneparth have a series covering many of them. The latest topic is on Tariffs
🎙️Podcasts I love:
50Fires. It is by Carl Richards, a recovering Financial Planner and Advisor. He could help other people with their finances but had a difficult time talking about money with his wife and children. It has quickly become one of my most anticipated podcasts to listen to every week.
Money For Couples by Ramit Sethi. Ramit is no one new to the world of money and personal finance. In his podcast, he talks with couples about their finances and helps them better enjoy their money or better get aligned. This is very important podcast for me as I enter a new stage of life.