The Cattle to Back Up the Big Hat

We all know the type; a big house, luxury cars, a sports boat, and all of the other trappings that come along with “living the dream”. If you are anything like me, the first question I wonder to myself is, what do you do that you can afford all of this stuff? The upkeep alone must cost a fortune! There is also a good follow up question that I have starting wondering as well: How much did you have to borrow to acquire all that stuff!?

Tom Stanley, author of the book The Millionaire Next Door, has a great expression for those folks out there who have nice stuff with a bunch of debt attached to it. He says: they have a “big hat and no cattle”. In the ranching world the traditional display of success is wearing a nice big cowboy hat. But as we all know if you wear a big hat and don’t actually have the “success”, in this case a significant amount of cattle, you are simply a faker.

I know it sounds harsh, but I think you guys can handle it. Let’s call it what it is. If you are creating a false reality; you are a faker. I would even go so far to say that we all do it to some extent. Whether it is with material possessions or relationships, every once in a while we fake it.

I have had the opportunity to work with many individuals in our business, and I have seen the best of the best faking it with their finances. They tend to round their total debt down and income up. These folks spend generously, borrow quickly, and live for the next paycheck so they can cover their minimum credit card payments. If you look in from the outside, it looks like they have all their ducks in a row. They are living an ideal life and wear a “Big Hat”. In reality, when you dig into their financial situation they are treading water and the waves are getting higher and higher. It doesn’t matter how much money they make, it could be $40,000 or $250,000. You can fake it at any level.

I don’t know about you, but I want to have the cattle to back up the big hat.

So how can we stop faking it? I think the first step is to try to identify the areas where we are faking. Do you pick and choose the debt you are including in your mental total? Do you leave out that mortgage debt or those student loans? Do you tend to round up when you think about your salary? What about those leased cars - are you including them in your assets?

It can be a painful exercise but when you wipe away the fog of faking it, reality can push you to action. The next step is to start changing. Try selling some stuff, pay down debt, or put together a budget that you can stick to. Be honest, don’t fake it anymore!