This Week on Oprah: Unmasking the Illusion of American Wealth

Did you see the Oprah show this week where the family who lived in California whose take-home income was about $6,000 a month was spending $15,000 a month?

The audience was all agog. Oprah had on Suze Orman to “help” the couple.

But can they really be helped? Here’s their spending habits:

Current mortgage: $1800 (It’s a negative amoritization loan that is about to “correct.” The payments will be $3500.)

Starbucks “runs” every month: $300-$400

Manicures/tanning for the mother: $50 a week

Shopping at the mall: Several hundred a week

Cars: 3 cars (even though the kids are all under age 16.)

Suze Orman calculated that they really have about $135,000 in credit card debt. They can’t afford health insurance for their family and haven’t taken their kids to the dentist in years.

Yet they’re living in an over $600,000 home in Southern California.

The California Dream, baby!

Except, it’s all an illusion.

Suze tried to give them tough love. They’re already 2 weeks behind on the mortgage. She told them to put the house on the market now and move out of California to a “cheaper” state where there is no income tax (such as Washington State.) Suze also told the wife, who is a stay at home mother with 5 or 6 kids, to go to work at Starbucks part-time so she can get their health insurance.

Somehow, watching the wife on the show with her fake tan and hair extensions, I didn’t think she would be able to EVER work at a place like Starbucks. But desperate people sometimes surprise.

The reality is: this family will go into foreclosure on their house. And then they’ll have to declare bankruptcy.

When you look around your neighborhood and wonder “how are all these people affording these cars and houses?” you can bet: they’re not.

The sad thing is, the money is going towards manicures, $900 shoes, $600 a month car payments. Nothing is saved. There is no pride in having investments. They are buying “things.” Things with no value.

Do you wonder why some people never get ahead? Too many “things.” Not enough stocks.

But after hearing about how the one mother was spending $400 a month at Starbucks, I thought, “hm…I should be buying more of that stock.”