Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research may determine where and how companies appear. Learn more about how we make money.

Published: Oct 18, 2016 5 min read
Luxury car parked on Rodeo Drive, Beverly Hills.
Jean-Pierre Lescourret—Getty Images/Lonely Planet Image

About 10 years ago, a client made an appointment with me at my Los Angeles-area office, saying he had a major concern he wanted to discuss.

I wasn't sure what he was unhappy about. We spoke regularly, and his account was performing as planned. What had I missed?

My client, who worked in the entertainment field, was different from most of the other show-biz people I have worked with. His life was simple. Then 33, he rented a modest apartment. His car, which he paid for in cash, was nice but not out of his budget. He had a rainy-day fund amounting to a year's worth of living expenses—perfectly appropriate for the movie industry, where you might go a year between jobs. He had no student loans or credit card debt. What he did have was a pension plan, a Roth IRA and an investment account that put him in great shape for his age.

“Holly, I feel I am not successful," he told me. "I think I am not doing enough to reap the benefits of hard work and savings.”

Perplexed, I asked why he felt this way. “Well, just today, on the drive here," he told me, "I drove through Hollywood and saw beautiful houses, high-end cars, people dressed in Armani—all these things that I don't have yet."

He felt like a failure.

“Well, Andy," I told him, "I'm happy you came in with a concern I could handle so easily."

He looked at me like I was from another planet. “Did you hear what I said?” he asked.

"Yes, and you can rest assured you will walk out of here feeling better," I said. "First, many of those people—the ones wearing those clothes, driving those cars, and living in those beautiful houses—they are extremely unhappy and, additionally, very stressed.”

He is now the one who is perplexed.

"I have worked with many people in the entertainment field," I continue, "and I can tell you from experience when it looks to good to be true, it is. Those people do not own these things. Their bank does."

I told him he could have these things, but that there was a price.

"What's the price?" he asked.

“All you need to do is go out and ask every bank, department store, and car dealership to give you a loan for the item you want," I told him. "That's the easy part. The hard part is trying to keep up with interest payments when you have overextended yourself and cannot afford the amount required to pay monthly. Then it all goes downhill from there. The outrageous interest rates you are paying will cause you to get deeper into debt and farther away from being able to afford the things you set out to own. You will have to start using your rainy-day fund to pay down the interest, but it will not be enough. So you will need to dip into your investment account. That will help, but you'll still have large monthly payments due. Then let's say you're out of work for over a year, so you'll need your retirement assets to live off of. Fast-forward several years: You've busted your butt to pay off the debt, but now you need a new car and cannot get a loan because you ruined your credit when your house got foreclosed on."

Andy stopped me. “I've heard enough," he said. "I feel better now."

I smiled, and we went back to what we had done for years: planning for his retirement.


Holly Hanson is founder and principal of Harmony Financial Strategies, where she provides her knowledge, dedication, and service to individuals and families in need of alternative planning. Holly is a certified financial planner, a certified investment management analyst, and an accredited domestic partnership advisor.