Friday, October 19, 2007

The Unspoken Obsession of 2007


ORANGE COUNTY, Calif. -- We are reminded daily of the addictions afflicting our society: alcohol, tobacco, drugs, eating
disorders and gambling, to name a few. Now another destructive behavior is brought to our attention, courtesy of plummeting real estate values, one just as pervasive in terms of financial ruin but rarely discussed.

It's the unspoken obsession: the need for celebrity, for status, for plumage.

Tom Scott, a 30-year financial advisor based in Irvine, CA, says many
people in Orange County have overextended themselves financially. He
believes that in most cases, their spending addiction reflects the need to
gain attention, admiration, significance.

Says Scott, "You don't have to look far to see people with tenuous
financial underpinnings driving triple-digit supercars or living in estates
worthy of an oil magnate. Where affluence is ubiquitous, being noticed
requires opulence. What was considered lavish a decade ago is now
commonplace, particularly in wealth-laden Orange County. As a society, we buy not what we need, but what we have the credit to borrow. Cars, boats, jewelry, clothing, homes -- excuse me, compounds -- virtually anything that is visible to the neighbors and tangibly demonstrates we are special."

Scott's professional duties often involve valuing investment assets for
divorce proceedings. Statistics identify financial stress as the principal
cause of divorce, but what underlies this stress? In Scott's experience,
"it is almost always financial overextension, money spent to acquire
plumage to impress... who? People we don't know who see us driving our
Porsche and think, 'Wow, he must be somebody important'?"

There's nothing innately wrong with pampering ourselves occasionally or
enjoying some of life's tactile pleasures. We can enjoy a glass of red wine
with dinner without having to drink a magnum of Chateau Lafite every
evening. We can live comfortably in a home lacking Italian marble floors or oceanfront access.

Those who avoid financial overextension and accumulate sufficient funds
to live comfortably without financial stress don't always earn more money
than their compulsive counterparts, nor do they necessarily deny themselves life's pleasures. According to Scott, what they apparently do differently is:

1. Learn to live without having the best of everything, and
2. Find healthier, more meaningful ways to enhance their life.

When asked for an example, Scott cites the pleasure he derives from
being one of the top players at his squash club. "It costs very little, it
doesn't jeopardize my financial well-being or retirement, it causes no
sleepless nights," he notes. "I think there's nothing wrong with the desire
to be seen in a positive light by our peers and society, we just need to
find more positive ways to do it. The genuine thrill of seeing your
charitable works improve the lives of those less fortunate is another
example of directing your resources towards more rewarding activities."

Scott, a registered rep with LPL Financial and Principal of Scott
Wealth Management, concludes that people would be happier and find greater satisfaction if they simply ignored their neighbor's plumage, adding, "Forget about keeping up with the Jones; they have the same financial issues you do."

Contact: Tom Scott 949.265.1086 or Mike Dubes 800.835.1700

SOURCE Tom Scott

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