To live like the rich you have to be rich

January 19, 2003|By Jim Sollisch

CLEVELAND - Once every few years, I meet with a financial adviser, usually in January after the party is over. This year, I'm sure my adviser will help me figure out how to invest every penny of tax relief the president promised me in his economic stimulus package.

These meetings are an experience not unlike going to the dentist. I can stand the pain - it's the promises I make that are so humiliating, like my annual promise to floss twice a day. I have never flossed. I would rather rewire my house every morning.

The financial adviser extracts promises from me, too. "Yes, I'll read the brochure on long-term care insurance. I'll up my 401(k) deduction. And I'll re-start the Roth IRA. Yes, I admit that was pretty immature to stop the automatic deductions two months after we set them up."

If I followed this guy's advice, I would have a very nice retirement. The problem is, I'd have to wait until then to buy a toaster or other small appliances, such as a toothbrush.

Like everything else in our society, the ways of the rich have been imported and repackaged for the rest of us.

Once, only the rich had second homes. Now any of us can have a time share. Once, only the rich visited spas and had plastic surgery. Soon Wal-Mart will offer these services for the rest of us. Once, only the rich could get rich in the stock market. In the late 1990s we all thought we could.

But after the stock market lost its exuberance, the rich were still rich while we were right back where we started. It used to be that only the rich had financial planners. Now if you make more than minimum wage, you need a financial planner, too.

The truth is, we just can't keep up with the Gateses, but that hasn't stopped many of us from trying. It seems like every kid from every middle-class family has his or her own car and cell phone. We all shop at the most exclusive stores, if not in person then online. Even our ordinary, working-class pets have their own stores. This may sound like democracy, but it's really just capitalism punch drunk on revolving credit. The average American household, in an effort to live the lifestyles of the rich and famous, has credit card debt of more than $8,000.

You would think financial planning is exactly what we need. But most of what financial planners recommend is merely designed to make us feel horrible when we can't afford it. And if you want to have any quality of life, such as buying groceries, you can't afford it. My wife and I are solidly in the mid-range of middle class.

Financial advisers tell us we should already have a huge college fund for our kids - the oldest is two years away from college and the youngest is seven years away. We should have about $500,000 of life insurance on me, the primary breadwinner. And disability insurance, of course. We should be deducting the maximum on our 401(k). We should be putting at least a couple hundred dollars a month in a Roth IRA or other mutual funds.

And now we're being told to consider long-term care insurance so our estate isn't squandered when we need home health care or nursing home care. I'd like to point out that I don't have an estate. I have a very average four-bedroom house. Rich people have estates. Where did we get this idea that all of us could live like the rich and retire early to a life of plenty if only we made the right investments?

The truth is, most of just can't afford to be rich. It's too expensive.

Jim Sollisch is a free-lance writer who lives in Cleveland.

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