Living a Life of Luxury

Luxury is defined as the state of great comfort and extravagant living.  Is this an accurate description of your current lifestyle?


Ok, you can stop laughing now.  We know that most people who have been successful in building a significant net worth have done so over many years through hard work and disciplined saving.  Even when times are good, spending money can actually be difficult for some people.  On the other hand, what about those who enjoy the thrill of the spend?  Can a person live a life of luxury and still be prudent and disciplined when it comes to money?


Of course!  The secret is in how you garner your “luxury”.


The basic idea here is that we (and that means everyone) have something inside of us that makes it very unappealing to go backward in life.  For example, no one likes to gain weight or lose fitness.  We all want better lives for our children and grandchildren.  It’s a pretty straightforward concept, but watch what happens when we apply this to a lifestyle.  Assume you just bought a $50,000 car.  What are the odds that you will desire a less expensive car in the future?  How quickly we become accustomed to our accoutrements!  Chances are that you were probably ecstatic as you moved into your 1,000 sq. ft. starter home back in the day.  How would it feel if you had to move back there today?


Our advice is to be very thoughtful about what you splurge on and how you reward yourself.  One-time experiences can be totally luxurious, but they don’t demand that you write them a check once a month for the next 30 years.  Once you adopt a certain daily lifestyle, however, it’s no fun to cut back.  If you allow your fixed costs to get out of hand, they will derail your financial plan and threaten your future goals.  Even if you pay cash for items like pools, boats, and vacation homes, make sure that you have also considered all of the ongoing costs associated with those luxuries.


Here’s a brief checklist of things to think about before parting with your hard-earned cash:

  • Reward yourself and others with special one-time gifts and experiences
  • Always consider the “all-in” cost (maintenance, repair, replacement)
  • Don’t use debt to buy a depreciating asset
  • Think hard before adding recurring monthly fees (subscriptions, memberships, services)
  • Perhaps most importantly, evaluate your spending habits to make sure they reflect your values


In the end, living a life of luxury is all about perspective.  Regardless of our current financial position, we get to live in one of the most desirable cities in the country and in one of the most prosperous countries in the world.  Anything we can do to help improve our own financial security and sense of well-being is simply gravy.