A Temple Of Ego and Debt.

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Yesterday I went up to Gables Honda in Wesley Chapel to get the first oil change on my motorcycle. I brought my walking shoes because I also needed to go to the bank and wanted to get breakfast during the 2 hour wait.

They got a Waffle House right there and I had a hankering for a pecan waffle.

There is a cluster of stores and dealerships right off the Wesley Chapel exit, and I had heard about the new Lexus dealer but had never walked in the building. I had time to kill, why not check it out?

Of course, the building is beautiful, with high ceilings and chrome accents. The $110,000 Lexus sports car is sitting there gleaming on the showroom floor. It reminded me of the first time I walked into the casinos in Atlantic City when I was a kid, minus the racket of slot machines and the old ladies smoking Newports.

Even then I remember thinking: if this place looks so fancy who is paying for all this?

In 2016 in the United States over 55% of new Lexus models sold were leased!

In the last few years Audi and Mercedes Benz have also built dealerships in this area.

This goes hand in hand with the upscale subdivisions that have been built in this area, places like Estancia where the cheapest homes were $250,000 but now range up to $1 million or higher.

I don’t have an issue with someone who buys a luxury car, they have beautiful interiors, powerful engines, etc… but how many folks buy a luxury car mainly for the chrome logo on the front and the back? How many of these leases are about impressing other people?

If you have to lease a luxury car and you’re also carrying a huge mortgage you’re probably are trying to look more prosperous than you actually are. No one will notice when you pay off your home and retire your mortgage, but everyone will see that shiny new Mercedes in your driveway.

Old Texas saying: Big Hat, no cattle.  

This is just old fashioned ego at work, if you read the book The Millionaire Next Door the author talks about how many people with a high income tend to live in expensive homes in ritzy subdivisions with expensive cars, yet they don’t have savings when times get rough.

Theses folks are trying to impress the world, but if they lose their job or have a financial reversal they lose all of it.

Of course, there are also the folks who buy their home and their Mercedes with cold hard cash, I run into this type in solar sales… they put half down on a $30,000 solar array and pay the remaining balance when the panels are installed. You see this from folks who retire down here from up North, normally in their 50’s.

This is where I aim to be in the next few years.

I used to drive a used Lexus, with a nice watch on my wrist… and then I decided to pay off my debt. I’m not there yet, I still hold a modest mortgage on my home… but I drive a 2013 Chevy Volt (that I bought used for $14K). My home is modest, plenty of room for me, my 2 daughters and a little cat named Ms. Lemons.

If I had rough times financially I could sell my home and live off the equity for a long time… and in the least year or so I’ve gotten to the point where I live on less than HALF what I earn. I have less stress in my life, and when I have a really big month in sales that’s even better. My sales income goes up and down, so when I have a big month I can pay down extra debt, or travel, or buy a motorcycle.

My roof is being done this week, followed by a solar array up top that will generate over $30,000 in electricity over the next decade. That’s tax free income!

If I sell this house I can get more for it because of the solar, but if I decide to stay here my expenses will be very low once my mortgage is gone: just insurance, the water bill and property taxes. I like having those options.

As for the folks leasing luxury cars? Good luck when the next recession hits!

Ben Alexander

February 2018

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