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I’m a car guy from way back, so one of the first things I notice about my neighbours is the vehicle they drive. The question I often find myself asking: “How did they afford that car or SUV?”

The German brands really stand out – great vehicles, but pricey. And yet, they’re all over the place these days. Are owners of these vehicles really that flush? The answer to this question can be found in a recent New York Times article that delved into the “everybody seems wealthy” illusion. Wise words: “When people seem to be able to afford much more than their income would suggest, it’s often because there is hidden wealth or hidden debt.”

The reason this subject matters is that it’s hard to watch people driving nicer cars, taking nicer trips, having nicer homes, sending their kids to nicer summer camps and so on. You either come to terms with this, or you spend more to keep up.

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One way to tell if someone’s spending is driven by hidden wealth or hidden debt is to listen for mentions of a line of credit. In unguarded moments, people sometimes talk how big the balance is on their home equity line of credit. Now you know how they afforded the lux home reno and the three-week trip to Europe.

It’s too bad people can’t take more pleasure in having low or zero debt. In the long run, it’s more gratifying than a fancy car with enormous monthly payments.

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Rob’s personal finance reading list…

How to maximize miles and points while holiday shopping

You’ll be spending more than usual during the holiday season, right? If you want to squeeze the maximum amount of credit card rewards from this spending, check out these tips. One suggestion is to the use the online shopping malls operated by many reward programs to earn extra rewards.

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Never order coffee at brunch

According to this blog, brunch coffee is almost always bad. So why waste the money? Get coffee before brunch.

“Something really bad happened”

One man’s gutsy, honest account of his experience investing in a digital currency. He made plenty of money and then lost it all. I have seen this over and over – people having initial success with a speculative investment before disaster strikes. Don’t get cocky.

The cost of living at home until age 28

A young woman writes about the personal finance lessons she had to learn after moving out of her family home until she was 28. “I had to learn from scratch what many other people my age already knew: how to support yourself financially.”

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Ask Rob

Q: Credit card coverage – or not! – for a car rental?

A: I usually rely on the collision-damage coverage offered by my credit card. Many years ago, a car we rented was vandalized in our driveway overnight and I made a claim using our credit card’s coverage. I had to file documentation to an insurance adjuster, but the claim was paid quickly and without issue. Here’s some useful background on how credit card car rental insurance works.

Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.

Today’s financial tool

Tools, calculators and more have been gathered here by the federal Financial Consumer Agency of Canada to mark Financial Literacy Month in November.

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What I’ve been writing about

  • Sorry, owning a house doesn’t earn you an A+ grade in personal finance
  • This is how much time you should carve out of your busy schedule to look after your personal finances
  • The DIY investor’s guide to the best places for parking cash in an online broker account (for Globe Unlimited subscribers)

More Carrick and money coverage For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group. Send us an e-mail to let us know what you think of my newsletter. Want to subscribe? Click here to sign up.

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