Lori, after a long day showing homes, occasionally unwinds with the guilty pleasure of the Bravo-verse, specifically The Real Housewives of Beverly Hills.

 

I am above such trashy TV. And yet I somehow keep accidentally catching it over her shoulder.

 

One recent storyline in particular has grabbed my attention because it illustrates a financial principle I've held my whole career.

 

You may have heard of Dorit and PK Kemsley. If not, here's the short version: they are a very flashy couple who bought a six-bedroom, ten-bathroom, 8,900 square-foot mansion in Encino for $6.475 million in 2019. It has been a backdrop on the show for years.

 

 

I'm endlessly amazed by how financially fragile the visibly wealthy often are. The American consumer machine is extraordinarily good at separating people from their money, no matter how much they have.

 

It's astounding to me, even in the very painful and stressful world of divorce, how reckless two people can be about their spending. 

 

I also can’t believe how unsophisticated this lady Dorit seems about money. She’s texting her soon-to-be-ex pictures of junk mail she’s getting, offering to buy the house.

 

When you miss just one payment on your mortgage, hundreds of these letters pour in. She doesn’t know they're trash.

 

 

You can't out-earn stupid spending, no matter how much you earn. These two make millions of combined income a year, and appear to have no assets and a house in foreclosure.

 

Charles Dickens put it better than I ever could, in David Copperfield:

 

 

I always thought that was Samuel Johnson. Johnson's version is more direct: "Whatever you have, spend less."