They could be in a neighborhood near you.
They could be your friends.
Or friends of someone you know.
They look wealthy, live in lavish homes and neighborhoods, drive nice cars, wear designer clothes and dine in exclusive restaurants.
And they’re broke.
These people are… the Pretend Millionaires.
Some of these people may make $40,000 a year or even $2 million dollars a year – but it makes no difference, because they spend more than they can make. So despite the fact that they’re spending left, right and center, they are actually broke. Even if they do make more than a million dollars a year, they’re still broke: few assets, excess debt, income barely covering their lifestyle.
Should anything happen to them (redundancy, disability, illness or death) and there goes their McMansion, luxury sportscar and trophy wife.
It may come as a shock to you but it is easy for pretend millionaires to exist. With credit cards, they can live insanely beyond their means and think about the consequences later. They might make the minimum repayments or have a good income – enough to keep them afloat – but when the ball drops and they can’t keep up with the repayments, that’s when bankruptcies and divorces happen.
Look at the Real Housewives of Orange County – when the credit crunch happened, four of the six housewives couldn’t keep up the mortgage repayments (despite high incomes) and had their homes foreclosed.
The housewives are no different than to someone making $40,000 a year and spending $80,000 by maxing out their cards and spending more than they make. Both qualify as pretend millionaires even though one actually makes a million dollars on paper.
These pretend millionaires aren’t “richâ€, they’re pretending they are. --
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