What if you were forced to stop working for three months and you were unable to receive your weekly wage? How long could you last? Sadly, for many people they would not be able to survive for too long at all. I know many people who absolutely rely on every pay day to fulfill their financial obligations. Without that payment at the end of each working week they are virtually destitute.

So many people live beyond their means. They give the appearance of being a lot better off financially than what they really are. Sure they have the $65,000 boat parked out the front of their house and they drive the latest $50,000 sports car and they live in a very nice home that might be worth $800,000. For all intents and purposes they look like they are really doing well. But what happens if you peel back a layer of that supposed wealth and look behind the scenes?

You might find that the boat and the vehicle were both bought using expensive loans. You might also find that the home had a $640,000 mortgage registered against it. You might also learn that they have three or four credit cards with a limit of $10,000 each. So, they don't really own the boat and they don't really own the vehicle. Finance companies hold a bill of sale over both of those items.

If the credit cards are loaded to the hilt, like so many of them are, then that $40,000 would have to be paid from the proceeds of the sale of the house. In a forced sale, the house may have to be sold for only $750,000. It might cost $20,000 in fees and commissions to sell that home. That leaves a net amount of only $50,000 (ie $750,000 - $640,000 - $20,000 - $40,000 = $50,000). That doesn't look too good now, does it?

When assessing true wealth you must look at NET wealth once all the debts are settled against the assets held. Most people do not factor this in when they think about how much true wealth they really have. The house and the boat and the vehicle and the lavish lifestyle all looks wonderful on the outside. But what is happening underneath the veneer?

If your income is stretched so tightly across all your "assets" and everything has to be paid once a month to keep holding all those things then you have a lot less wealth than what you are displaying. The best thing that you can do is get rid of the depreciating items such as the boat and the new sports vehicle and all the debt ridden credit cards. And replace them with appreciating items - something like a solid share portfolio or an investment property. The luxury car and the boat and the credit cards are a monthly cash flow drain. Eventually they will lose for you a lot of money.

Stop kidding yourself. Stop trying to fool everybody with your false display of wealth. Earn the right to own these things by only purchasing solid wealth building assets. Cars and boats and credit cards are the exact opposite.